MBABANE — Investigations by FSRA have revealed that Status Capital Building Society was, in fact, operated as a pyramid and money-laundering scheme, rather than a legitimate building society.
According to an affidavit deposed to by the Financial Services Regulatory Authority (FSRA) Chief Executive Officer Ncamiso Ntshalintshali, Status Capital never carried out the core business of a building society, but instead, used its licence to collect hundreds of millions of Emalangeni from the public, recycle investor funds and channel large sums to related entities controlled by the same individuals.
The affidavit forms the basis of the regulator’s application for the provisional and final winding-up of Status Capital Building Society, with the FSRA arguing that the institution was insolvent, conducted business in an unsafe and unauthorised manner and was involved in serious financial crime.
Status Capital was registered and licensed in November 2019 under the Building Societies Act, a licence that allowed it to accept deposits from the public. However, the FSRA alleges that investigations show the entity never advanced loans secured by mortgages over immovable property, the principal object of a building society and instead operated a structure consistent with a pyramid or Ponzi scheme.
Under this structure, the affidavit states, funds from new investors were allegedly used to pay operational expenses, commissions and interest to earlier investors, while the bulk of the money was siphoned to related companies.
The FSRA has approached the court in terms of Section 73 of the Financial Services Regulatory Authority Act, seeking compulsory winding-up as the only mechanism capable of protecting investors and enabling recovery of misappropriated funds.
In the affidavit, Ntshalintshali explains that Status Capital’s licence permitted it to raise funds from the public on the understanding that these funds would be used to provide mortgage-backed loans.
Instead, the regulator alleges, Status Capital lured members of the public, including retirees investing life savings, with promises of returns of up to 13.25 per cent per annum. Two products were marketed: Fixed-period shares and monthly interest fixed deposits, both requiring minimum investments of E20 000 over a minimum term of two years.
Investigations reportedly show that between June 2020 and September 2025, approximately E205.4 million was deposited by members of the public into Status Capital accounts, largely on the belief that they were investing in a regulated and secure building society.
According to the affidavit, most investor funds were paid into a First National Bank account referred to as the ‘Deposit Account’. From there, the funds were rapidly transferred to other Status Capital accounts, including disbursement, operational, petty cash, income and call accounts.
The FSRA alleges that about E180 million of the total funds represented pure public investments.
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Status Capital fraud on grand scale corrupted financial system – FSRA
MBABANE – The collapse of Status Capital Building Society has been described as a ‘fraud on a grand scale’ that has corrupted Eswatini’s financial system and brought it into disrepute.
In an affidavit before the High Court, the Financial Services Regulatory Authority (FSRA) Chief Executive Officer, Ncamiso Ntshalintshali, warned that every day the first respondent (Status Capital Building Society) continues operations, the risk to the country’s financial system increases. He urged the court to issue both provisional and final winding-up orders to prevent further harm to the public and the economy.
“This fraud on a grand scale has corrupted the financial system and brought it into disrepute. It is necessary to bring an immediate end to this by winding up the first respondent. This will allow the liquidator to pursue recovery and pay creditors the funds already recovered,” Ntshalintshali said.
The regulator’s application comes after intensive investigations concluded that Status Capital was never engaged in legitimate building society business and was, in fact, insolvent. Investigations revealed that the entity operated a pyramid and money-laundering scheme, luring members of the public with promises of high returns, while siphoning millions of Emalangeni to related companies.
According to Ntshalintshali, a winding-up order is the only mechanism capable of protecting investors and ensuring that remaining assets are preserved and equitably distributed.
“The appointment of a liquidator will protect depositors and creditors by ensuring that Status Capital’s remaining assets are preserved, recoveries are pursued and distributions are made under the fair and equitable process of liquidation,” he said.
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How emaSwati funds allegedly moved out
MBABANE – FSRA’s investigation reveals that millions of Emalangeni collected from emaSwati were unlawfully transferred out of the country through a web of debenture agreements with related entities.
According to the founding affidavit before the High Court, Status Capital entered into debenture agreements with several companies, including Status Asset Management, Swaziland Debt Factoring Firm, Fintegrate and Claymore Procurement Solutions, all allegedly controlled by the same individuals who ran Status Capital.
The regulator alleges that these agreements were used to create the appearance of legitimate investment activity, while serving as a mechanism to siphon public funds.
Under the debenture arrangements, related entities could submit utilisation requests compelling Status Capital to release funds. The debentures were structured to accrue interest, with principal sums repayable on demand. However, the FSRA contends that no genuine arm’s-length lending occurred.
Crucially, the affidavit states that many of these transactions were executed without the approval of the registrar, as required under the Building Societies Act. The related entities were also allegedly unlicensed to provide financial services in Eswatini or South Africa.
One example cited involves Status Asset Management, which reportedly received E35 million from Status Capital. The regulator alleges that the same individuals sat as directors on both sides of the transaction and authorised transfers without proper utilisation requests.
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