Fidentia hearing told of intimidation, bugging and an offer to resign

Brown, ousted as Fidentia chairman after it was placed in curatorship, appeared with Graham Maddock to face a string of charges in connection with fraud, theft and the contravention of various Acts, among them the Companies Act, the Financial Advisory and Intermediary Services Act, the Income Tax Act and sections of the Reserve Bank Act and Exchange Control regulations, notes a Moneyweb report. Brown and Maddock were arrested last week after the Scorpions decided they had enough evidence to press ahead with charges in connection with the theft of more than R200m from the transport skills\' education training authority. Also under investigation is R1.9bn belonging to mineworkers\' widows and orphans and a large number of ’wide-ranging charges’, including corruption, listed in a provisional charge sheet, the court heard.

On the issue of the bugging of board rooms, the Moneyweb report says Scorpions investigator Geoffrey Edwards told the court the Financial Services Board (FSB) found bugging equipment at Fidentia. A Cape Town journalist, Bruce Cameron, was allegedly placed under surveillance, he said. Advocate Klaus von Lieres und Wilkau, acting for Brown, dismissed suggestions that ‘some chap called Cameron’ was placed under surveillance, with Edwards agreeing that there weren\'t any formal statements or evidence to that effect. Of the bugging equipment found at Fidentia offices, Von Lieres said the Fidentia Group had 22 boardrooms – all with equipment to ‘record meetings and video conferences’. This is ‘normal business practice, isn\'t it’, he asked Edwards, the latter saying his information was that a ‘sweep was done and equipment removed’. Full Moneyweb report

Brown offered to quit his position in a bid to stave off curatorship, according to a document handed to the court. The document, a letter from Fidentia\'s lawyers to the FSB, was attached to an affidavit by Brown setting out the reasons he thought he should be granted bail, says a Mail & Guardian Online report. The letter, dated December 6 last year, outlines ‘a summary of our discussions as to how our client (Fidentia) might exit its asset-management business’. It says the FSB agreed that if a particular ‘plan of action’ could be achieved, it would not place Fidentia Asset Management (FAM) under curatorship. The lawyers proposed an agreement under which Fidentia would exit the asset-management business and ‘Arthur Brown will, with immediate effect, no longer be involved in any aspect of the management of FAM, but will assist in the realisation of the assets.’ Brown himself, the letter suggested, would undertake to pay the shortfall to investors if the sale of Fidentia\'s assets turned out to be less than the amount to which investors were entitled. Full Mail & Guardian Online report

Edwards said potential witnesses were living in fear of Brown and his ‘goons’. He told the court that none of the potential witnesses he had interviewed was afraid of Maddock. This fear appeared to ‘emanate’ around two men, Ray Nelson and Jacques Malan, who had been described to him as Brown\'s ‘goons’ or ‘henchmen’, according to a report on the IoL site. ‘They would be armed, walk around the offices with their firearms on display. People felt intimidated by these two,’ he said. Edwards also revealed that Brown has two SA passports. Full report on IoL site

Claims of intimidation of witnesses were based on ‘speculation and opinions’ and not on hard facts, the court heard. Edwards was grilled by both Pete Mihalik, for Maddock, and Von Lieres for Brown on suggestions that the two would flee the country if granted bail. Edwards admitted that he had no evidence ‘at all’ that Maddock ‘was going to run away’, says a Business Day report. Edwards said none of the potential witnesses he had interviewed was afraid of Maddock. But everyone linked to Fidentia whom he had spoken to ‘was afraid of Mr Brown’, he said. Von Lieres said Brown denied he placed anyone under surveillance, as Edwards had suggested, forcing Edwards to concede that he had based this ‘only on what he was told’. Edwards conceded he had not investigated the placing of people under observation. He had spoken to a private investigator, who had said Brown had asked him to place two employees of the FSB under surveillance. ‘The investigator said he had asked for the instruction to be put in writing, but said Brown did not reply to him.’ Full Business Day report

Brown told the court he had already been convicted in a trial by media. ‘I have been held out to be the villain in the tale, and have already been convicted by it,’ he said. This would prejudice him not only in the criminal trial he is facing, but also in the bail hearing itself, according to a report on the FIN24 site. Full FIN24 report