Ukhozi FM faces investor backlash after RNK NTT collapse

The Financial Services Conduct Authority (FSCA) has warned consumers about people posing as its representatives and officials who promise to help them recover their money from RNK NTT.

Traders who invested their money in troubled RNK Trading and its associated South African representative network, NTTeam, are blaming radio giant Ukhozi FM for multimillion-rand losses suffered after the operation collapsed.

The now-penniless investors have accused the SABC radio station of giving credibility to what they describe as a Ponzi scheme by allowing RNK NTTeam to advertise and promote its business on air.

The scheme reportedly attracted about 30 000 traders, who would regularly be glued to their smartphones at 1pm and 5pm to monitor their investments, trade and "buy shares" before the operation collapsed.

Some victims claim to have invested R500 000 or more. The business model resembled network marketing, with existing traders recruiting others to join, and it became popular in towns and cities across KwaZulu-Natal.

Many of its representatives travelled around the province recruiting new members while wearing RNK NTTeam-branded clothing.

Although the scheme collapsed several months ago, some investors remain hopeful that it will return and that they will recover their investments, with interest, as they claim happened after previous "glitches".

The investors' anger towards Ukhozi FM stems from the station's decision to broadcast RNK NTTeam adverts and promotional material. Their frustration boiled over into a protest at the SABC's KwaZulu-Natal studios last weekend.

The protesters accused Ukhozi FM of being reckless by giving airtime to a company they believe misled its listeners.

Security officers and members of the South African Police Service intervened to disperse the angry crowd, which was demanding answers from the station's management.

Nomaswazi Ngcongo, who invested R100 000, said she had learnt about the scheme through Ukhozi FM and believed the station's involvement meant the business was legitimate.

"We heard about the Ponzi scheme on the radio. We believed that if something was advertised on Ukhozi FM it was true; that's why we invested our last money," she said.

Ngcongo said she never expected the station to allow its listeners to be exposed to what she believes was a fraudulent investment operation.

Zwakele Gumede, who invested R50 000, said the radio advertising had convinced him that he was dealing with a legitimate trading opportunity.

Gumede said he would continue protesting outside the station until investors received answers from its executives.

He accused Ukhozi FM of playing a significant role in attracting people to the scheme.

The operation reportedly attracted investors beyond South Africa's borders, including in eSwatini, while RNK NTTeam had offices in several parts of KwaZulu-Natal. Its collapse has also left some employees without jobs.

There have also been reports of escalating anger among investors. Some reports allege that the home of a person linked to RNK NTTeam was set alight.

On social media, many complaints have been directed at the alleged founder of the operation, with some investors accusing him of being dismissive when questioned about the future of the business and when they would be repaid.

The first signs of trouble reportedly emerged in July when investors did not receive payments expected on July 15. The payment date was subsequently moved to July 31, triggering panic among investors.

"I had told myself that I would withdraw R10 000 and help out at home because there was a bereavement, but that didn't happen," said Sinothile Jiyane.

There are also reports that some RNK recruiters have since launched a new "investment scheme", encouraging former members to put the past behind them and participate in the new venture.

Attempts to obtain comment from RNK and NTTeam were unsuccessful. The SABC also did not respond to questions sent to it.

It is not the first time the SABC, the country’s public broadcaster, has found itself entangled in a dubious get-rich-quick scheme. On June 29, 2022, it parted ways with gospel presenter Sibusiso Buthelezi, who had been linked to a private investment project called Abombuso Investment, also known as Abombuso Poultry.

The scheme promised investors high, in some cases 100%, returns from the sale of chickens and eggs within a few months.

Buthelezi’s contract was terminated following mounting public pressure, confrontations between investors and the presenter at the SABC, and concerns about reputational damage to the broadcaster.

He had allegedly blurred the line between his private business dealings and his relationship with the SABC as an independent contractor, forcing the broadcaster to distance itself from his private business activities.

Despite this history, the station still gave airtime to RNK NTTeam adverts, even after widespread early warnings from people who raised concerns that it appeared to be a Ponzi scheme.

A petition calling for accountability has been launched on Change.org by Sello Jerry Makhalanyane.

Makhalanyane said he had invested his hard-earned savings after being convinced that RNK/NTT was a legitimate operation.

"Trusting in the legitimacy of RNK/NTT, I invested all of my hard-earned savings, confident that I was doing the right thing for myself and my family," he said.

He said discovering that his savings were gone had been devastating.

"It's not just about the money; it's about being taken for a fool, having my dreams shattered and facing financial uncertainty I was not prepared for," said Makhalanyane.

He called on RNK/NTT to take responsibility for what he described as misleading practices and false promises and to return investors' money.

Meanwhile, the Financial Sector Conduct Authority (FSCA) has warned consumers about individuals impersonating the regulator and its employees while offering to help victims recover money allegedly lost through RNK NTTeam.

"The FSCA has no affiliation with this entity and will never request your money to assist in a claim or query," the regulator said.

The FSCA regularly warns consumers about unregistered entities and individuals offering investment or trading opportunities.

It advises members of the public to verify whether a financial services provider is authorised before handing over money and to be wary of investment offers promising unrealistic returns.

Members of the public can verify whether a person or institution is authorised as a financial services provider by contacting the FSCA on its toll-free number, 0800 110 443, or using its online FSP verification service.

Suspicious activities can also be reported to the FSCA's Ethics and Fraud Hotline on 0800 313 626.