Johannesburg - Suspended Telkom chief financial officer and former Absa financial director Jacques Schindehütte, the only man who was bullish about Pinnacle Point Group’s prospects before it went under, said he had wanted to be transparent to Trilinear Empowerment Trust.
When Trilinear, which invested and lost R250 million of Southern African Clothing and Textile Workers Union members’ provident fund in Pinnacle Point, asked Schindehütte if that was a safe investment to make, he suggested that Absa Capital give all the details about its concerns regarding Pinnacle Point’s Lagos transaction.
After the single stock futures disaster that left Pinnacle Point in debt, Lagos Keys was to be its salvation.
But Absa was the first to know, before Pinnacle Point, that there were hurdles in the way of that transaction. While Pinnacle Point believed that obtaining a 99-year lease was enough to get R500m funding from Absa, the bank’s lawyers in Lagos advised a certificate of occupation and two environmental assessment certificates were needed for the Lagos Keys project to be bankable.
Schindehütte told the inquiry into Absa’s role in Pinnacle Point’s liquidation that when Trilinear fund manager David de Waal approached him to find out if everything was in order with the Lagos transaction, he did not know if the certificates had been obtained. On finding out, he advised Absa Capital to give a detailed response.
“Martin Leigh and Stephen van Coller felt we must say the absolute minimum. I wanted to be transparent but I understand the legal standing of my colleagues. Technically, the textbook response that Trilinear had to do its own due diligence was correct,” he said.
After telling Trilinear to do its own due diligence on Pinnacle Point, Absa Capital told De Waal the issues of concern regarding securing Lagos Keys’ land rights had been resolved. The bank argued that Pinnacle Point’s relationship with other investors did not concern it. It also said that its response to Trilinear represented the view of Pinnacle Point’s then chief executive, Hendrik Pretorius, on the matter.
But the commissioner, retired Judge Meyer Joffe, concluded that Absa Capital’s response to De Waal did create an incorrect perception.
“Whatever Hendrik would have said would not have reflected the bank’s view. We know that the bank’s view was that these issues cannot be confirmed [that issues had been resolved],” Joffe said.
Schindehütte said whatever his views were on its prospects, he would not work in opposition to his colleagues at Absa Capital and Absa chief executive Maria Ramos, who were vehemently opposed to putting more money into Pinnacle Point.
He told the commission that he took an entrepreneurial approach when handling the Pinnacle Point portfolio for Absa. But when Ramos asked him to step aside, appointing Absa Capital chief executive Stephen van Coller to look after the investment, Schindehütte reckoned Absa Capital treated Pinnacle Point as a normal banking transaction where it was interested in knowing that Lagos Keys was bankable.
Pinnacle Point’s testimony earlier showed that the group regarded Absa’s handling of its portfolio as less than enthusiastic, saying “they set up the company for failure” by shifting the goal post for funding it had been promised. Schindehütte said he understood Pinnacle Point’s viewpoint but could not fully agree with it.
“I also understand that my colleagues wanted Pinnacle Point to deliver,” he said.
Evidence presented to the inquiry showed e-mails between Schindehütte and Mark Antoncich of Absa Capital – the only people at Absa bullish about Pinnacle Point – which spoke of “hurdles” that the Absa board could put in place to block the loan that was detrimental to Pinnacle Point’s continued existence.
The inquiry has been postponed until January. - Business Report