Absa sacks Baloyi

Absa said it had fired non-executive director Danisa Baloyi, who was a trustee of the Living Hands Trust which stands at the centre of fraud and theft investigations into Fidentia. The company has been placed under curatorship after regulators said R680m of funds were missing. ‘This action is the culmination of a process to review the position of Dr Baloyi on the Absa boards, following public disclosures regarding her involvement with the Fidentia matter,’ Absa said. A Financial Services Board report on Fidentia Asset Management accused Baloyi of being exposed to a conflict of interest in her role as a trustee on the board of the Living Hands Trust, notes I-Net Bridge. Baloyi and fellow Living Hands trustee Hjalmar Mulder were both directors of Fidentia Holdings, the sole shareholder of FAM, the company managing the Living Hands Trust. In addition, Baloyi has come under fire after curators uncovered an R8m loan Fidentia paid to her, which Fidentia executive chairperson Brown denied had been written off. Full report on Finance24 site Full I-Net Bridge on Business Report site

But Baloyi has come out fighting. A Moneyweb report quotes her as saying: ‘I refused to be pushed off the Absa boards as this would have given the impression that I have done something wrong.’ Baloyi was given the option of resigning. She claimed that Absa chairperson Danie Cronje and Absa management went about the matter in ‘ways fully deserving of contempt’. ‘They engaged in behind-the-scenes, clandestine activities that exacerbated an already flammable and highly emotive issue.’ Absa denied these allegations. Baloyi said she stood guilty of no offence under the Companies Act, the Banks Act and Absa\'s regulations. ‘I discharged my fiduciary duty and my duty of care... in a diligent manner. I was still prepared to continue in this manner until I was wrongfully removed.’ Full Moneyweb report Baloyi’s full statement on Moneyweb site

Baloyi’s axing comes as Brown and Maddock have both been given bail of R1m each. According to a report on the IoL site, the ruling was made by Cape Town Magistrate Eric Louw on Monday. He also ordered that they surrender their passports to the Scorpions and report to the police twice a week. The two men had asked for bail of R100 000 each and the State countered by demanding that they each post R3m. Louw said the charges against both men were ‘of a very grave and serious nature’. ‘This case is as big as it can get. White collar crime is the silent killer and saboteur of economical growth,’ he said. The pair is facing fraud charges relating to R250m funds invested by the Transport Sector Education and Training Authority (Teta) but which cannot be traced. Full report on the IoL site

But Brown could not raise the R1m bail and spent Human Rights Day yesterday behind bars. Maddock walked out of court on Monday after posting R100 000 in cash and signing over to the Scorpions a R900 000 bond on a property at Cape Infanta. Brown\'s legal team offered a similar guarantee on his home at upmarket Sunset Beach in Cape Town, says a report on the IoL site. However, lead prosecutor Bruce Morrison rejected this, saying the property had been bought with money belonging to the Transport Sector Education and Training Authority (Teta), and was therefore the proceeds of crime. Brown\'s lawyers were reportedly seeking an alternative way of financing the bail. The Reserve Bank has frozen Brown\'s personal accounts, Absa has cut off his access bond facility on the Sunset Beach home, and his wife\'s business has been placed in liquidation. Brown is expected to appear in court today for an application for a change in bail conditions. Full report on the IoL site

Could warning signs about Fidentia have been picked up by investors before they pumped R2bn into the asset manager? According to Global Credit Ratings (GCR), the alleged shady practices that led to the apparent disappearance of R689m in Fidentia funds could have been picked up far earlier than was the case. Business Day says there is no independent assessment process available in SA for asset managers, even though such a yardstick is available in the US and Europe through rating agencies such as Standard & Poor\'s and Moody\'s. However, SA-based GCR has launched an independent rating process for asset managers. GCR analyst John Storey said his company would like to see a situation where all pension fund managers demanded an independent rating report for an asset manager before they put their pensioners\' money into that fund. ‘We are doing two types of ratings, the first for individual funds and another rating for the asset manager,’ he says. Storey said the asset manager rating looked at the risk management capabilities of that money manager, its operational practices, effectiveness of internal controls and the overall credibility of the firm. Full Business Day report See THIS WEEK’S ANAYLYSIS below