Cape Town. 260712. Paramedics removes one of the victims of a shooting incident that happend at Basileus Investments at the ICON Building in Cape Town. One victim died on the scene. Picture Leon Lestrade. Story Natasha Prince

The business dealings of Herman Pretorius, one of two businessmen who died in a central Cape Town shooting last month, was red-flagged as far back as May last year, the Financial Services Board (FSB) has reported.

Pretorius and Julian Williams, 37, a chief executive of Basileus Capital, were found dead in an office in the Icon building on the Foreshore on July 26. Williams was shot in the neck and stomach. Pretorius had a bullet wound to the head. A 9mm pistol was found at the scene.

The FSB said it had been told in May last year that Pretorius had been selling shares in unlisted companies and promoting these ventures through representations to the community.

At the time Pretorius’s activity had not been regarded as unlawful, the board said in a statement on Friday.

But after further complaints in May and June this year, the board decided to inspect his affairs to establish whether the activities of his investment vehicles were subject to FSB regulation.

The inspection was under way when Pretorius died, the board said in the statement.

“Questions have been raised about the speed at which the FSB reacted to these allegations and complaints, some suggesting the regulator should have acted sooner,” the FSB said.

“There are media reports indicating concerns were raised with the FSB more than eight years ago regarding Pretorius’s involvement in hedge funds.

“The FSB wishes to clarify that at that time that these concerns were raised the regulator could not establish any evidence of Pretorius’s activities in hedge funds or any irregularities with regard to the issues raised at the time.”

The FSB had also heard concerns that it had allowed what amounted to a “gigantic Ponzi scheme” to continue under its nose. It said if Pretorius had run such a scheme, it would have operated in strict secrecy from the board.

“Therefore, it cannot be said to be operating under the regulator’s nose.”

The Cape Times asked FSB spokeswoman Tembisa Marele yesterday who had informed the regulator about Pretorius’s activities and who had raised concerns.

“I am still in weekend mode and I am unable to answer any questions at the moment,” Marele said.

“I can help you tomorrow once I am in the office and have the press release [information] in front of me.”

Last week, the Western Cape High Court granted a provisional sequestration order against the Relative Value Arbitrage Fund, a trust that Pretorius managed and used as an investment vehicle.

The trust owes its investors R1.8 billion.

One of the investors, Morné Strydom, brought an urgent application for the sequestration order.

Judge Burton Fourie found that several investors wanted their money back. But it appeared that the trust was insolvent.

The court heard that Pretorius had been the Relative Value Arbitrage Fund’s sole trustee, managed the fund, handled investments and was in charge of paying dividends.

Judge Fourie set a return date of September 3.

A curator appointed by the court is to investigate to establish what became of the money in the trust and how much can be recovered.