The Bank of Namibia (BoN) has declared online business QZ Asset Management as a Ponzi scheme after an investigation into its business dealings.
“The Bank of Namibia assessed the business activities of QZ Asset Management following complaints by members of the public,” said Kazembire Zemburuka, Director of Strategic Communications and International Relations at the Bank of Namibia.
The wholly online business is marketed as an asset management and advisory service for individuals as well as institutions. The company claims to utilize big data and Artificial Intelligence to build portfolios that are meant to provide long-term investment returns through acquiring ownership in companies.
“According to its marketing material, the company matches investments dollar-for-dollar, apparently doubling their clients’ Assets Under Management (AUM) and profits. The company further claims to ensure that capital is 100% guaranteed in the event of any trading mishap and that a maximum interest return of 400% can be earned on investment. QZ Asset Management does not offer any tangible products for sale,” explained Zemburuka.
Zemburuka further stated that the business was found to be in contravention of section 5 of the Banking Act and is not licensed by the Bank of Namibia as a banking institution, nor is it authorized to accept, receive, or take deposits from the public.
“QZ Asset Management advertises and solicits deposits, which it accepts as a regular feature of its business. Participants are promised a return on investment of up to 400%. Members of the public are enticed to become members of the scheme by paying a membership fee. In order to grow in the hierarchy, participants must recruit more members under them, who in turn must pay a membership fee for the benefit of the scheme. The business promises that members who invest more money and recruit more people stand a chance to win holiday packages, expensive branded watches, and luxury cars. QZ Asset Management does not sell any tangible products. Thus, the business model can only be sustained with the continued recruitment of new members who pay membership fees and invest in the scheme,” Zemburuka further explained.
The Bank of Namibia cautioned the public to refrain from promoting or participating in the business activities of QZ Asset Management or any unauthorized financial schemes, “as such activities are against the law and may result in financial losses for those who partake in the scheme.â€
