Ponzi scheme shakes Africa's Benin
Virgile Ahissou and Artis Henderson, AAP
September 2, 2010, 11:12 am
More than 100,000 people in the tiny West African nation of Benin have lost their savings in a Ponzi scheme run by a now-defunct company that appeared to be publicly endorsed by the country's president.
The government said in a statement in August that more than 130,000 people gave their savings to Investment Consultancy and Computering Services. Together they lost more than $US130 million ($A142.87 million), the statement said.
The corporation was registered as a nonprofit computer service company and was operating illegally as a banking institution. ICC was forced to close on July 1, and more than a dozen of its employees were jailed.
But the reverberations have echoed to the top of Benin's power pyramid and now threaten President Boni Yayi, who appeared on television with ICC managers.
Television news shows showed Yayi and other top government officials posing alongside the managers of the investment firm. The images were reproduced on T-shirts. While investors interpreted Yayi's presence as an endorsement, the president did not officially speak in favour of ICC during the appearances.
In this country of 8.7 million people, the average yearly income hovers at $US750 ($A824). Many lost months to years of savings in the scam.
Electrician Lambert Saizonou, 40, planned to use his investment earnings to buy his first house. Now he has lost all of his savings. Jobs are scarce, and Saizonou worries it will take years to save to buy a home for his family.
"They promised me an interest rate of 200 per cent," he said. "Now I must start saving again, little by little."
Herman Menton, a 32-year-old company manager, lost nearly $US1500 after investing in ICC for a year. Like many of ICC's investors, Menton was referred to the company by friends who had already invested and lured him with the promise of high interest rates.
Perhaps the greatest swindle, some say, is the government's role in the investmentcompany. Many victims say the sight of government officials in the ads reassured them their money would be safe.
"We saw them on television," said Pierre Dossa, a mechanic who lost his savings. "How could we not believe in it?"
Since the announcement that ICC's activities were fraudulent, Yayi has swept his administration of those associated with the company. In July, he fired Armand Zinzindohoue, the minister of the interior, and Chief Prosecutor Georges Constant Amoussou.
More than a dozen individuals connected to ICC have been jailed, including the president's cousin and two of the company's top managers.
But some members of Benin's National Assembly say these measures do not go far enough. They accuse Yayi of being complicit in ICC's corrupt activities, and they have called for his impeachment.
But the government of Benin denies any wrongdoing. "This is a private affair between a business and its clients," said spokesman Candide Azanai. "Because the people have been robbed, the government is intervening for the security of its citizens."
An investigative commission has been established, and the government is seeking to retrieve funds from ICC, even seizing personal items such as cars and villas from the company's managers. Victims will be reimbursed according to how much money is recovered, according to Azanai.
ICC managers could not be reached for comment, as the company no longer exists and many executives are in jail.
Ponzi scheme shakes Africa's Benin - The West Australian