‘Manipulator’ Brown behind Fidentia’s collapse – judge

Judge Daniel Dlodlo told Brown he had manipulated the funds of Fidentia to the prejudice of shareholders, investors and creditors. Business Report notes the ruling follows an urgent application by Brian Pincus, senior counsel, and Steve Goddard on behalf of Dines Gihwala and George Papadakis, joint curators of Fidentia Asset Management, Bramber Alternative and Fidentia Holdings, which were placed under curatorship on March 27. Dlodlo found it was apparent that Brown, in concert with certain individuals, was the protagonist in the collapse of Fidentia. ‘Brown did not act with honesty and integrity. On the contrary, he registered property into his family trust in circumstances that were both fraudulent and in flagrant breach of his obligations to Fidentia Asset Management and Capitalwise,’ Dlodlo said. Brown and his associates were ordered to pay the curator’s costs on a punitive attorney-and-client scale. Full report in Business Report

The ruling comes as Papadakis and Gihwala are to question former senior employees of the company in a bid to recover some of the R1bn that is estimated to be missing. At least 10 people have received subpoenas for an ‘examination’ before the curators in terms of the Financial Institutions Act later this month. They had been asked to bring certain paperwork with them. The 10 had been cautioned they would be guilty of an offence if they refused to co-operate or if they gave false information. Full report in Business Report

More details on who is expected to be questioned are given in a Moneyweb report. Angelique Tostee, Johan Linde and other former senior Fidentia employees are among those who will have to answer to the curators. The money disappeared in a spending spree that involved Fidentia buying entities well above market-related prices and paying employees over-inflated salaries, as well as treating them to expensive cars and personal property on the backs of investors. According to Moneyweb, Linde will be among the first interrogated by the curators. He was a former MD of Fidentia and held a number of positions at various Fidentia entities. Linde is also closely linked to disgraced BEE heavyweight Danisa Baloyi – recently exposed for not having a doctorate from a US university as she claimed. He was a director of Baloyi\'s South African Women\'s Investment Holdings and also went to great lengths to do whatever he could to assist Baloyi in her role as a Fidentia shareholder and trustee of the Living Hands Trust. Another person who can expect scrutiny from the curators is Angelique Tostee, who headed Fidentia\'s unit trust company, Fidentia Ayanda (m Cubed unit trust management company). Former Fidentia director, co-founder and shareholder, Louis Koen, is also expected to be questioned. He was instrumental in attracting former national cricketers Dave Callaghan and Meyrick Pringle to become Fidentia employees. The curators are keen to probe the former provincial cricketer\'s role in Fidentia\'s deals as well that of former Stormers\' player Martin van Schalkwyk. The latter helped Brown come up with R1m for bail. Also on the list is Susan Brown, Arthur Brown\'s wife. Together with Brown and apparently with assistance from Tucker, she recently siphoned about R24.5m of clients\' funds from Fidentia – under the noses of lawyers at one of SA biggest law firms, Cliffe Dekker, Moneyweb reported. Most of the money was used to buy an R18m building to house the Facets\' women\'s lifestyle centre, but about R1.5m made its way back to the family trust in the form of cash. Full Moneyweb report

Meanwhile, a forensic investigation into behind-the-scenes dealings at the Transport Education Training Authority (Teta) is complete and findings are expected to be shared today (June 7) with senior employees and board members. After that, notes a Moneyweb report quoting Teta CE Piet Bothma, reports will be made to the Minister of Labour and the National Assembly Standing Committee on Public Accounts. He said the Teta board would decide on which information to make public. The board has about 36 members, said Bothma, with representatives from large transport companies, including SAA, Putco, Golden Arrow and Transnet. The government’s Teta is one of Fidentia’s victims, losing more than R200m. Full Moneyweb report

A law firm linked to Fidentia is also under fire. In a stinging attack on Bowman Gilfillan, the editor of Personal Finance, Bruce Cameron, labels it as one of the companies that continued to do business ‘with one or other of the Fidentia companies when there was already widespread talk in the financial services industry that things were going very much awry at Fidentia’. He alleges Bowman Gilfillan earned significant fees for representing Fidentia virtually up to the day that it was placed under curatorship. He adds it also played a role in efforts to delay having Fidentia placed under curatorship and helped to block the attempt by the Financial Services Board (FSB) last year to force the Living Hands Administration Company to apply for registration as a financial services provider. Living Hands Administration Company, a subsidiary of Fidentia, effectively controlled R1.2bn, held in the Living Hands Umbrella Trust, which was needed to pay benefits to widows and orphans. Cameron says the chairperson of Bowman Gilfillan, Jonathan Schlosberg, refused to answer questions put to him by Personal Finance. Full Personal Finance report