Cape Town -
The State aims to convict former Fidentia boss J Arthur Brown on two charges to which he admitted some form of culpability, the Western Cape High Court heard on Wednesday.
Prosecutor Jannie van Vuuren said there was sufficient evidence to prove Brown committed fraud in respect of the two charges.
They were counts two and six, which relate to Fidentia's dealings with the Transport Education and Training Authority (Teta) and Mantadia Asset Trust Company (Matco).
Brown originally faced nine charges, based on the State's allegation that he ran a pyramid scheme and used investors' funds for personal gain.
Van Vuuren said he would not pursue conviction in terms of the first count, a fraud charge involving Fundi Projects.
“The State will not ask for conviction. I don't think it was proven beyond reasonable doubt,” he said during arguments.
It was also abandoning counts three, four, five, seven, eight and nine, which related to Teta, Thaba Manzi, Infinity and Antheru.
The charges were corruption, money-laundering, theft and fraud.
“There is not sufficient evidence. There is no official evidence in terms of documentation,” Van Vuuren told the court.
On Tuesday, Brown handed up a document with key admissions relating to counts two and six.
Regarding count two, he admitted that the amounts Teta entrusted him with were invested from time to time in asset classes different to those specified in their non-discretionary mandate.
“At the time and throughout the period, I knew that investing in these alternative asset classes would be more risky and would not be as safe as those described in the Teta mandate, and could cause potential prejudice and I have reconciled myself with this fact,” he said in the document.
He also admitted that monthly statements prepared for Teta between May 2003 and September 2006 were incorrect.
“I knew that this could cause potential prejudice and I have reconciled myself with this fact.”
He said his actions on this count were a misrepresentation of the true facts and he had thereby caused potential loss to Teta.
“My actions were unlawful and constituted fraud by way of dolus eventualis (indirect intention).”
Regarding Matco, he admitted that Fidentia misrepresented itself by saying the full purchase price for the company would be paid before it took control of Matco.
He said these actions amounted to misrepresentation of the true facts in respect of the sale of share agreement.
“Although I was not directly involved in each and every detail of this transaction, I did not prevent the format of the transaction. I foresaw that this could cause potential prejudice to the shareholders of Matco and reconciled myself therewith,” Brown admitted in the document.
“My actions were unlawful and constituted fraud by way of dolus eventualis.”
Brown said he made the admissions to “bring an end to the trial”. - Sapa