MMM ponzi scheme on BoN radar
One of the world’s biggest pyramid schemes may not be showing any significant signs of growth locally but this did not perturb the Economist to ask the central bank whether the infamous MMM ponzi scheme was on its radar.
An active MMM Facebook page has garnered the interest of 29 people so far while MMM South Africa makes provision for citizens of the Common Monetary Area over the age of 18 to join the scheme. When the MMM South Africa website opens up, visitors are greeted by consultants who are eager to help with registration.
Speaking to the Bank of Namibia recently, the Economist wanted to establish if the ill-fated scheme had announced itself in the country. Responding to the matter, its acting Director for Communications Petrus Shifotoka stated, “The Bank of Namibia is not aware of MMM Ponzi scheme operating in Namibia. In general, the Bank of Namibia is concerned with illegal financial schemes operating in Namibia because they are prohibited by the Banking Institutions Act.”
Shifotoka continued, “As customary, if the Bank becomes aware of the operation of MMM Ponzi scheme or any other suspected pyramid scheme, it will conduct investigation in terms of the Banking Institutions Act to determine whether such operation constitutes a pyramid scheme. If the investigation confirms [this] the Bank will take action as provided in the Act.”
He encouraged members of the public with information on the operation of the MMM pyramid scheme to contact the Bank of Namibia’s Banking Supervision department. Said Shifotoka, “The Bank will conduct its investigation to determine whether MMM Ponzi scheme is operating in Namibia. In this regard, the Bank calls upon any person with information regarding the operation of such a scheme in Namibia to contact the Banking Supervision Department of the Bank of Namibia.”
Founded in 1989 by Russian trio Sergei Mavrodi, Olga Melnikova and Vyacheslav Mavrodi, the scheme attracted much needed attention from Russian regulatory authorities, ultimately leading to its de jure closure in that country in 1997. Despite the legal clampdown in Russia, the scheme recently made waves in South Africa and as commentators often say, if South Africa sneezes, the rest of the southern African geographical region is destined to catch a cold.