Monday, November 12, 2007
Sasanet Con Shocker: Nairobi Man Invested Kshs 10 Million In Collapsed Pyramid Scheme
During my controversial visit to Nairobi and then on to the Rift Valley some months back and which I talked about here, something very fascinating happened which I have not mentioned until now. (The visit was “controversial” because I admitted that it was the first time in many years that I was visiting the Kenyan capital and many of my readers felt cheated because they had always assumed that I was based in Nairobi.)
Anyway, during that visit, I sat at a dinner table somewhere in Nakuru with some relatives and listened as they explained to me in great detail how Kenyans were making a killing investing short term in some “solid investment companies.” One of the companies mentioned was Sasanet. They vehemently denied that it was a pyramid scheme and went on to tell me this amazing story about some smart lady who collects her cheques every month and then spends the rest of her time touring the world on some mercy missions and on holiday too.
What struck me was that I was not talking to some ordinary gullible wananchi on the streets. These were highly educated persons. The cream of society, so to speak. Some of the people on that table were the kind that regularly visited those capitals of the world the rest of us only hear about or see in movies and world news. New York, Washington, Paris, London etc.
Still, I only needed to ask a few questions and I was sure that what they were referring to were pyramid schemes (at the end of this article I explain how to tell a pyramid scheme instantly and the difference between pyramid schemes (illegal in most of the world) and Multi-level marketing (MLM) or Network marketing companies which is a very legitimate business. But what puzzled me even more was the fact that some companies mentioned like Sasanet had a very good image and were considered to be reputable businesses. Sasanet is one of the companies that had passed scrutiny and been licensed by the CCK Communication Commission of Kenya.
I asked where the money was being invested so as to yield such high returns and I was promptly told that it was being invested “off shore.” I could hardly prevent myself from giggling. Most of the returns “offshore” were usually very low, in the region of single digit percentages. Certainly not what would provide cash for the amazing returns of almost 20% for a brief 3 month periods being paid out by the likes of Sasanet in this case.
I took time to quietly explain to everybody why the investment schemes were definitely scams. But I could see that they were hardly convinced. After all I had no track record as a known investor. Who was I? In fact a couple of the people I was talking to on that table had leant me some cash during some hard times I had passed through not too long ago.
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Posted by Chris at 11:07 AM