Securities Authority warns against proposals to invest in gold mining in Ethiopia

The Israel Securities Authority today issued a warning regarding the activities of Lekach Investments, a company owned by Chaim Kaplan.

“According to the information available to the Office, Kaplan is engaged in raising funds from investors, in particular from the ultra-Orthodox sector, to invest in gold and precious metals mining activities in Africa. The Office is verifying whether these activities comply with legal requirements,” the statement said.

The agency began an investigation several weeks ago, and after developing reasonable suspicion, decided to issue a warning to the public as a first step.

According to The Marker, Kaplan has already raised about NIS 250 million. The vast majority of investors are from the ultra-Orthodox Jewish sector. A significant portion of the investment was raised through loan agreements secured by the investor’s apartment, while Kaplan promises to pay mortgage payments in return in addition to a return of about 100%.

According to suspicions, this is another version of the Ponzi pyramid, and payments to investors are made from funds received from new investors.

The publication reports that Lekach Investments’ proposal concerns mainly one gold mine in Ethiopia. The company presented a report from a European consulting firm, written about eight years ago, that put the value of the mine at about $46 million. However, an audit by the Haredi Consumer Protection Forum, a volunteer organization dedicated to preventing fraud, raised a number of questions about the authenticity of the documents and the true value of the mine.