Durban - Ten years after investing their savings and pension with a Queensburgh businessman and his sister, investors are finally seeing the wheels of justice turn at the start of the pair’s fraud trial.
In the matter before the Durban Regional Court on Wednesday, it is alleged that sequestrated businessman, Mervin Rodney Dennis, and his sister, Mary-Ann Peter, ran the company, Global Investments, and invested only about R4.9 million, of the amount of about R138.9m received, on the Johannesburg Stock Exchange (JSE).
The rest of the money was apparently used to repay existing investors and allegedly spent by Dennis on gambling, jewellery and payments to motor dealerships.
Dennis was sequestrated in May 2005 and in that year, more than 800 investors had lodged about R70m in claims against his insolvent estate.
During the hearings, investors – who included teachers who had taken retirement packages, pensioners and businessmen, as well as people who entrusted Dennis with their life savings – listened to how Dennis allegedly spent their money.
Most of the investors were pensioners from Merebank, Isipingo, Phoenix and Chatsworth and had invested with the company between 1998 and 2005.
Witnesses testified how many of the businessman’s clients would come into his office to hand him their money and he would then apparently pray to God to multiply it.
A witness testified that, at night, crowds would surround Dennis at the high rollers’ section of the casino, excitedly watching as he gambled with millions of rands.
Dennis also testified at the hearings and promised to repay investors.
He was initially charged in 2006, but the charges were withdrawn when the State was denied an adjournment it had requested for time to complete its investigations.
The charges were reinstated in March 2010. Dennis’s sister was charged a few months later.
According to the charge sheet, Dennis started Global Investments in 1998 and allegedly promised investors their money would be invested on the JSE.
“Global Investments’ expenses significantly exceeded the income generated and the entity was trading under insolvent circumstances throughout its entire existence,” read the preamble to the charge sheet.
In 2003, the South African Revenue Service conducted an audit on the company and the investment club’s bank account was frozen.
The State alleges that to keep funds flowing in, Peter opened a bank account in the company’s name and deposits from new investors were then diverted to this account.
Interest payments to investors were said to be made from this account through cheques apparently issued by Peter.
At the start of the trial on Wednesday, both Dennis and Peter pleaded not guilty to the charges.
In 2014, the pair’s bid to have the charges against them quashed was dismissed.
Their subsequent appeal against this decision was also rejected.
Their legal counsel, advocate Jimmy Howse, said his clients would deny committing any of the alleged crimes and would also not be admitting to any of the amounts received from the 2005 complainants, saying large amounts had been repaid.
He also said the pair wanted to add to their plea, but could not, because many of their documents were lost when creditors searched Dennis’s home.
This was also why, he said, they could not elaborate on how much money was returned and when.
Before State advocate Khumbuzile Shazi could call her first witness to testify on a search and seizure conducted at the Global Investments office in April 2005, Howse told magistrate Simphiwe Hlophe he intended challenging the admissibility of this evidence in a trial-within-a-trial.
The reasoning, he said, was that the witness, an inspector at the Financial Services Board at the time, and the police, had forced their way into the office without contacting or informing Dennis.
Howse also claimed the search was not conducted in line with a search warrant.
But the inspector testified that Dennis did not have to be notified.
He said Dennis informed them to leave, saying they were not welcome.
The witness said Dennis had called two different lawyers who both told the inspector to leave.
The inspector refused, saying that he had instructions which he could not defy.