On 15 September 1998 officials of the Committee received a number of documents from a GCI shareholder. On 21 September 1998 officials of the Committee again met with Botha and de Beer to discuss the contents of the documents obtained from the shareholder as well as other issues. THIS SHAREHOLDER SOLD HER HOME IN DECEMBER 1998 BECAUSE OF THE FINANCIAL PROBLEMS SHE EXPERIENCED AFTER BUYING THE GCI SHARES.

Document 1: Letter or circular: "Dear Investor" dated 25 March 1998

The shareholder received this document from a GCI "broker". Excerpts from this letter were:

"GCI was registered in 1991. During October 1997 the first shares were offered to the public at a price of 46.8 cents per share. The shares currently trade at 89 cents per share, a return of 90.17% on investment in a matter of months!!

The share price is determined by the auditors and is based on the intrinsic value of the company. It is therefore based on the asset value of the company and NOT on the whims and perceptions of brokers and traders on the JSE. The main reason why GCI Limited is not listed and will not list on the JSE is the protection of our investors against the above manipulation of the share price.

For this reason we can guarantee that you will NEVER receive less for GCI shares than what you paid for them.

The income plan investments, with a minimum investment of R15 000, are fixed for three years and one day, and attract a monthly dividend of 1,25% of the value of the investment. This income is tax-free and amounts to 15% of the invested amount per annum."

The involvement if the Committee with GCI started on 23 February 1998. By 25 March 1998, the date of this circular, the board of directors already knew how a harmful business practice in terms of the Act was defined. The letter went out under the name of "JF de Beer, FINANCIAL MANAGER" but it was apparently signed by Bosch.

During the 21 September meeting de Beer and Botha expressed their surprise about the existence of the letter. They denied any knowledge of the letter and they made a photocopy for themselves. It would appear that the office administration of GCI must have been in a disarray.

Document 2: Letter "To Whom It May Concern" dated 28 April 1998

This letter went out under the name of de Beer but was also signed by Bosch.

"GCI was registered in 1991. During October 1997 the first shares were offered to friends family and acquaintances at a price of 46.8 cents per share. The shares currently trade at 95 cents per share, a return of 103% on investment in a matter of 7 months!!

The share price is determined by the auditors and is based on the intrinsic value of the company. It is therefore based on the asset value of the company and NOT on the whims and perceptions of brokers and traders on the JSE. The main reason why GCI Limited is not listed and will not list on the JSE is the protection of out investors against the above manipulation of the share price".

This letter also contained a number of illustrations about the so-called "income plan" mentioned in the letter dated 25 March 1998. For example, an "investment" (shares) would have secured a monthly income of R6 250. Again Botha and de Beer expressed their surprise about the existence of the letter and again they made a photocopy for themselves. Botha and de Beer either really did not know about the existence of the letter or they did not admit the truth. If Botha did not know about the latter, one can only speculate as to his management capabilities.

Document 3: Receipt No 0114 dated 29 April 1998

This receipt was issued to the shareholder. She bought 500 000 shares in GCI at 95 cents each, or a total of R490 000. She apparently bought the shares on the strength of the ridiculous statements contained in documents 1 and 2 mentioned above. She bought the 500 000 shares because she was under the impression that she would receive a monthly income of R6 250. The shareholder was apparently told by the broker that she could "... get the money back whenever she wished to do so".

Document 4: Letter to the shareholder dated 10 June 1998

On 10 June 1998 GCI advised the shareholder that 15 789 of her shares had been sold for R15 000 and that the amount was paid into her account. The shares were sold by "AZ" Brokers. The owner of "AZ" Brokers CC was Mrs. "AZ". She is the wife of "AZ", a friend of Botha. Botha explained that GCI referred potential buyers and sellers to "AZ" Brokers.

Document 5: Prospectus 98, date of issue 23 July 1998

This "prospectus" contained some glaring misleading statements that were also made to prospective shareholders during the beginning of 1998. This "prospectus" was registered with the Registrar of Companies. Botha said that this prospectus was not issued to the public because GCI gave an undertaking to the Committee at the meeting on 28 May 1998 that it would not issue more GCI shares. According to Botha the "prospectus" was registered with the Registrar to get the Financial Services Board and the South African Police Services of their backs.

When asked how the shareholder came into possession of the "prospectus" Botha said that the document was available on a stiffy and that his secretary probably printed the prospectus for a "consultant". The "consultants" sold GCI shares. Botha could not say how many other shareholders were in possession of this "phantom" prospectus.

Document 6: Letter dated 24 July 1998 from Putter Van Zyl Ingelyf, attorneys of GCI to shareholders

This circular stated inter alia that:

"Some shareholders did not understand the effect and implications of buying shares in a public company" and

"The value of a share in a public company is determined by various factors, such as the amount of the expected dividend, the value of the assets of the company, the trust of the public in the board of directors, the expected short, medium or long terms growth of the company, etc".

Botha said he had a "few" enquiries about shareholders that probably did not understand the marketability of unlisted shares and he then decided that this circular should be sent to all shareholders.

Document 7: Circular dated 24 July 1998, from Botha to all shareholders

This circular stated inter alia the following:

"Furthermore, I wish to advise that the Company started negotiations with Lowenthal & Co, who is a member of the Johannesburg Stock Exchange (sic) to open an Over the Counter (OTC) trading facility with their company for the trading of GCI Limited shares"

"It should however be noted that a new prospectus has to be registered with the Registrar of Companies in Pretoria. This prospectus will then be made available to Lowenthal & Company and a more open trading of GCI Limited shares will take place."

"The purpose of this circular is to inform you that you should be careful in the trading of any shares of GCI Limited"

An official called Lowenthal and spoke to an official of the company. He said that he knew nothing about GCI. Botha said that the particular official would not know anything because he (Botha) negotiated with another official and that the negotiations were continuing.

Document 8: Circular dated 24 July 1998 from de Beer to all shareholders

De Beer informed the shareholders about acquisitions made by GCI in various companies. It was stated in the letter that:

"The discounted nett present value (NPV) project value of the companies and projects that GCI will be a shareholder in, is estimated to be around R60 million with a current nett asset value (NAV) of around R12 million and an expected nett profit yield in the next twelve months of approximately R10 million. This represents an earnings per share ration (sic) of not less than 100 cents, per 95 cent share (105% yield).

No underlying assumptions to support these claims were given.

Document 9: Letter dated 11 August 1998 from F Jonker

Jonker was as some stage the administration manager of GCI. The following is a direct translation from the Afrikaans of this letter:

"We are pleased to confirm that (name of the shareholder) holds 473 684 shares in this company.

An amount of R30 000 will shortly ("eersdaags" in the Afrikaans) be deposited in their account".

It was pointed out to Botha that this letter from Jonker poses serious problems. The word "eersdaags" in Afrikaans implies an unknown date. It appeared that GCI promised the shareholder R30 000, irrespective of what price the shares were to be sold on the "open" market.

Document 10: Business Presentation dated 25 August 1998

This document, obtained from the shareholder, was, according to Botha, an internal document. It was not used at presentations and "certainly" not made available to shareholders. It was also available on stiffy and somebody, allegedly and wrongfully, printed the document and handed it to the shareholder.

Document 11: Letter dated 7 September 1998 from Botha to the shareholder

In this Afrikaans letter, signed by Botha, it was stated that the shareholder held 448 685 shams in GCI and that the shares currently trade at R1.20. "The value of your shares is R538 422". Botha was told that the shares were only worth the amount mentioned if it were sold at that price. He said that after he signed the letter he realised that he made a mistake. He said that the letter was subsequently changed to: "... that if the shares were to be sold at R1.20 each, it would be worth R538 422". He left the office to get a copy of the amended letter. He later returned to the discussions without the "amended" letter.

Other issues: An official received an anonymous call from a consumer who wanted to know if it was "safe" to buy GCI shares. The caller said that he had received a telephone call from a telemarketer. The telemarketer wanted to arrange an appointment for a GCI "consultant" to meet with the caller in order to discuss the offer for GCI shares. The caller was told that members of the Committee or its officials do not give advice to prospective investors. At the meeting on 28 May 1998 GCI undertook not to issue more shares. The official called GCI and said that he wanted to speak to a telemarketer. He was told that none of the telemarketers were available because they were on a training course. Botha and de Beer said they knew nothing about the selling of shares by the telemarketers but that they would investigate the matter.

At a meeting of the GCI board on 2 February 1998, however, it was minuted that Baths said (directly translated from the Afrikaans):

"I am going to use Lemmer and Partners to do telesales for us. It does not help that we pay People to do telesales for us and they only bring in R1 000 worth of investments".

At the end of the meeting it was agreed that the Committee would be furnished with a number of documents and information, such as: