BC Funding Solutions (Pty) Ltd

Warning regarding STS Investment Holdings and BC Funding Solutions

BC Funding Solutions acts as a subsidiary of STS Investment Holdings to raise capital from private individuals and corporate entities to fund community schemes with GAEL Fund Services acting as an independent third-party fund administrator. They offer a favourable return on investment that accordingly, entices the investor. Although the investment product offering and terms may vary, something that raised alarm bells was observing the manner in which they work once the investment duration has concluded. Something that is not elaborated on prior to investment is the fact that you are not guaranteed timeous payment of your investment even though the agreed upon term (5 years for example) has passed. The date of the repayment therefore remains indefinite which is very concerning. This is attributed to the alleged fact that the relevant community scheme in which they invested your funds has not yet been repaid and said delays are as a result of possible efforts/legal action to obtain said funds. You then ask for proof of where your funds were initially invested and most importantly, at what percentage of repayment the current scheme is at. This is met with delays, being pushed from pillar to post and being sent information that is relevant but does not directly answer any of questions. Following this, you are advised that you may request a withdrawal but will be penalized an ‘early withdrawal’ percentage even though the agreed upon term has lapsed. Uncertain about things and perhaps just wanting your funds back, you endeavour to accept the ‘early withdrawal’ penalty and are then advised that this will still not bring about a definitive time period for you to receive your funds, but that instead of receiving the money from the portfolio that your funds were invested in, you will be added to the queue to receive funds obtained from ‘replacement capital’ which could be regarded as another person’s investment capital. When asking these questions and putting the matter to the ombudsman, the company was quick to retreat to their legal team. It currently remains unclear as to whether such conduct is protected within the framework of the laws and regulations that apply to the sector but it most definitely does not seem reasonable to leave the investor in a pool of uncer*****y. To sum up - you the investor, are left in the following position (depending on your investment): 1) No guaranteed immediate access to your investment even once the agreed upon term has concluded. 2) No timeline as to when you will receive your investment once the agreed upon term has concluded if the relevant portfolio your funds were invested in has not been collected successfully. 3) Little means to accurately verify through transparent and easy to understand correspondence, the actual repayment progress of the relevant portfolio to which your funds were allocated. Perhaps your funds were split amongst various portfolios in which case a repayment percentage is vital in understanding the overall picture. 4) An ‘early withdrawal’ option that penalizes you a percentage when you request immediate repayment of your funds once the term has concluded. 5) Being penalized for the ‘early withdrawal’ but obtaining no true benefit in being advised that instead of your funds being repaid to you from the relevant portfolio it will be repaid from other received capital whereby the timeline remains indefinite however rest assured, you have been added to the queue. 6) It is not the investor’s fault that the company chose to invest in a portfolio that proved to be problematic as the investor has nothing to do with the due diligence that the company carries out or should reasonably carry out. 7) Repaying you from other investment capital raises several other questions. I do not believe that this the first time that the above companies have been challenged. Therefore, there are most likely mechanisms in place that will trigger a defence and reliance on a certain premise. However, regardless of background noise, laws and regulations aim to remove uncer*****y and grey areas, therefore surely the above cannot be justified. I work within the legal space and am therefore happy to liaise with other persons that could add value, clarity or legal alternatives to the above.