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Inside the Ghavalas case

Publish date: 09 March 2007
Issue Number: 1782
Diary: Legalbrief Today
Category: General

In October what has become known as the Ghavalas case will go to court.

The Financial Mail gives details about the indictment, which alleges that Alexander Forbes was fraudulently involved in stripping surpluses out of certain pension funds in merger deals that mostly took place more than 10 years ago. Ghavalas is alleged to have arranged the merger of the pension funds of dormant companies with the Lifecare Pension Fund, administered by Alexander Forbes. The template for such deals was the surplus stripping of the Jacaranda and Mitchell Cotts funds, according to the Financial Mail. A similar pattern repeated itself in a number of other pension funds, particularly the Sable Fund, and Lucas SA, Picbel, Cortech, Datakor and Power Pack. Many of the fund mergers, the indictment argues, did not follow the correct section 14 merger procedure (which includes member transfers to retirement annuities). The Registrar did not always get the chance to rule that such a merger was reasonable and equitable and did not prejudice the rights of the members. When mergers were approved, it was often after misleading, or false, information was provided. Full Financial Mail report