VPIEF still in infancy but already being questioned

The Vanuatu People’s Investment and Equity Fund (VPIEF) has received heavy criticism recently on social media and raised questions not only from some prominent ni-Vanuatu but also from the expatriate community.

While believers in the VPIEF concept say, given time, it will work, critics and observers are questioning it saying it may be a Ponzi scheme.

According to definition obtained online, a Ponzi scheme is when the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator, which is a fraudulent investment operation.

Daily Post has found that VPIEF is registered both under the Vanuatu Financial Services Commission (VFSC) as a private company limited by shares and under the Cooperative Department.

The shareholders under the VFSC registration are Mr Louis Kalnpel, Mr George Sokomanu and Mr John B. Bani.

The business which the company is authorised to carry out under the VFSC registration is unrestricted.

VPIEF has an Articles of Association to comply with the Companies Act [Cap 191].

The Articles of Association was submitted to the Vanuatu Financial Services Commission on April 16, 2015 and the registration of VPIEF as a company was made in April 23, 2015.

Daily Post went to the Cooperative Department late this week but was told that because it is a sensitive issue, no information will be divulged pending the Department’s approach to the VPIEF on certain issues that needed to be cleared by VPIEF.

VPIEF recently opened a Commercial Centre (shop) near the Korman round-about, which Daily Post has been told it operates as a cooperative.

There are allegations that since registering under the Cooperative Department, it has not had an audit undertaken, although its first operational commercial centre was opened only just last month.

With so much questions being raised, Daily Post contacted the VPIEF office to get clarifications to these questions from its directors earlier this week on Tuesday but did not obtain a response to a request for an interview until close of business yesterday.

VPIEF has a website that says it has 30,000 members, although recently it was reported that currently there are almost 40,000 members of the Fund.

As to what shares these members have in the company or any dividends that they will benefit from directly from VPIEF or investments such as its Commercial Centres, VPIEF directors could not be reached to clarify this question.

So far its website says it has purchased land in Luganville on Santo, in Port Vila and on Tanna all for undisclosed amounts.

It also purchased two four-wheel trucks for two of its Finance Centres on Tanna, that reportedly have 5,000 members.

It remains to be seen what returns in profit these investments are or will be bringing to the company, but the estimated values of the land purchased around three months ago reportedly stood at a total of Vt100 million.Currently membership fee to VPIEF stands at Vt4,000 but it was announced at the opening of the Commercial Centre at Korman round-about that next month the fee will increase to Vt6,000.VPIEF members belief that, if managed properly, the company or cooperative could reach new heights and be competetive in the business community in the future.