Update on Zantech Trading and DefenceXThe South African Reserve Bank (SARB), as part of its mandate in terms of the Banks Act, No. 94 of 1990 (the Banks Act), has conducted inspections into the activities of Zantech Trading and DefenceX to establish whether they were illegal deposit-taking schemes.Zantech TradingIn May 2013, SARB appointed Ernst & Young Advisory Services (Pty) Limited (EY) as the temporary inspectors to investigate Zantech Trading. The final inspection report concluded that the business conducted by Zantech Trading was contravening the Banks Act in that it operated as an illegal deposit-taking scheme. SARB has directed the company to repay the money it had unlawfully obtained and appointed EY as the repayment administrator to facilitate the management and control of the repayment process. According to the solvency report from EY, Zantech Trading is insolvent and SARB has initiated the legal process for its liquidation.Further enquiries on Zantech Trading can be directed to EY on 011 772 5104.DefenceXIn February 2013, SARB appointed PricewaterhouseCoopers (PwC) as the temporary inspectors to investigate DefenceX / Net Income Solutions. The final inspection report concluded that the business conducted by DefenceX / Net Income Solutions was contravening the Banks Act in that it operated as an illegal deposit-taking scheme. This finding was confirmed by the Western Cape High Court’s final judgement in June 2013, which also granted the order preventing DefenceX / Net Income Solutions from disposing any of its assets pending the finalisation ofthe inspection. PwC was subsequently appointed as the repayment administrator to facilitate the management and control of the repayment process. As part of this process, further investigations will be conducted to determine the exact amount of money that was unlawfully obtained, where this money and/or assets obtained with it are being kept, the identities of all investors and the verification of investor claims. Further enquiries on DefenceX / Net Income Solutions can be directed to PwC on 012 429 0033.SARB encourages the public to seek advice from accredited financial service providers that are regulated and supervised before investing its money.Issued by:Hlengani MathebulaHead: Group Strategy and CommunicationsTel.: +27 12 313 4210Cell: +27 82 448 9219​