Get IOL's cool new iPad app...
Cape Town - Ex-broker Steven Goodwin testified in the Western Cape High Court on Monday about financial statements he drafted to reflect investments with Fidentia.
Goodwin said he was responsible for drafting these statements and would forward them to ex-Fidentia boss J Arthur Brown for final details before they were sent back to him to be given to the Transport, Education, and Training Authority (Teta).
Brown is on trial for allegedly running a pyramid scheme and for using investors' funds for his personal gain.
Goodwin said towards the end of 2006, Teta wanted outstanding statements regarding its investments with Fidentia.
The company had not received its statements in June, July, and August.
Goodwin said the statements sent to Teta were not detailed. One of their investments was simply named “promissory notes”.
“They were supposed to be in the four big [local] banks. But they weren't. They were in properties. I didn't know what to write down. But I had to write down something to explain the situation, so I wrote promissory notes.”
Teta CEO Piet Bothma wanted more detail on the investments.
Brown previously admitted that Fidentia sent a letter to Bothma explaining that the Teta investment was comprised of “SA denominated money market investments”.
The letter stated the investments were held via a custodian in “various money market investments which comprise our collective money market portfolio”.
Fidentia said it was therefore not possible to list individual instruments held on behalf of Teta and, instead, attached a list of the complete portfolio.
The State alleges the statements sent to Teta were false and reflected the promissory notes as if they were still in existence and under Fidentia's control.
It further alleges that instead of re-investing this money for Teta, Brown used some of the proceeds for other purposes, including the purchase of vehicles and properties.