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Business Practices Committee Report 80

Propalux 46 Ltd

1. Introduction

 

 

Marketing material of Propalux 46 Ltd (97/05827/06)(Propalux) came to the attention of the Committee (1) during November 1999. An unknown woman presented an official of the Committee with a flier of Propalux at the offices of the Committee. On 29 November 1999 officials of the Committee visited Propalux where it conducts business in the Vanderbijlpark and Vereeniging areas, although it is possible that consumers living in the Free State are also clients of Propalux. The officials held discussions with two sales managers, namely Mrs J Seleanyane and Mr D Tjelele. The sales managers were reluctant to answer questions put to them because the "general manager," Mr Lucky Mthombeni (Mthombeni) was unavailable. They said that Mthombeni was in London. It appeared from an A-4 page flier that Propalux clients could invest in Propalux or buy an "income provider".

 

Officials again held discussions with Mthombeni at his offices in Vanderbijlpark on 23 February 2000, 29 March 2000, 17 April 2000 and 24 April 2000. It appears that Mthombeni is a director of four companies, namely, Propalux 46 Ltd (97/05827/06), Sekheleng Propalux (99/20003/07) L Mthombeni and Associates (Pty) Ltd (99/20004/07) and LM Fibas Padec Estate (Pty) Ltd. Fibas is the acronym for Financial Investment Business Account Services and Padec stands for Property Agent Developers (in all aspects) and Electrical Construction. It was extremely difficult to establish:

a) the shareholding of Mthombeni in these companies, although it appears that he holds 46 percent of the Propalux shares, between 33 and 48 per cent of L Mthombeni and Associates (Pty) Ltd and 100 percent in LM Fibas Padec Estate (Pty) Ltd and
b) the relationship and/or difference between these businesses. Mthombeni described the business of Propalux as "...an Investment company in moveable and immovable property." L Mthombeni and Associates (Pty) Ltd is concerned with "legal work" and LM Fibas Padec Estate (Pty) Ltd is allegedly involved in property development. Sekheleng Propalux "...carries on the business of an umbrella for funeral services and insurance brokers".

 

Another name appeared on advertising boards in the reception area of Propalux, namely Funeral Society Umbrella. It, however, has the same registration (97/05827/06) than Propalux.

 

 

 

1) The Consumer Affairs Committee (the Committee) administers the Consumer Affairs (Unfair Business Practices) Act, 71 of 1988 (the Act). It is a statutory committee, resorts under the Department of Trade and Industry and reports to the Minister of Trade and Industry (the Minister). The purpose of the Act is to provide for the prohibition or control of unfair business practices. An "unfair business practice" is defined in the Act as any business practice which, directly or indirectly, has or is likely to have the effect of harming the relations between businesses and consumers, unreasonably prejudicing any consumer, deceiving any consumer or unfairly affecting any consumer. The definition makes no distinction between unfair business practices that come about by design and those that come about intentionally.