Fidentia scandal: more money is missing

By John Yeld Time of article published Mar 28, 2007

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Funds missing from the Fidentia Asset Management group are "close to R1-billion" - far more than the R680-million suggested when the Financial Services Board applied to have the group placed in curatorship last month.

This was revealed on Tuesday by co-curator Dines Gihwala, after the granting of an order by Judge Burton Fourie in the Cape High Court to finalise the provisional curatorship order granted early last month.

The court was told that a Johannesburg advocate had been appointed by the three respondents - Fidentia Asset Management, Fidentia Holdings and Bramber Alternative - to oppose the curatorship application that had been brought by the Financial Services Board, but that no papers had been filed by today's return date. Speaking to the media afterwards, Gihwala said that "this (the supposed notice of opposition) means very little to the process".

Judge Fourie allowed an application by the Transport Education and Training Authority (Teta) to join as a second applicant in the curatorship order, agreeing that it had "a substantial interest in the matter". Teta is the second biggest investor in Fidentia Asset Management, with a R245-million stake.

The biggest investment was R1,47-billion from the Living Hands Umbrella Trust, which pays out money from the Mineworkers' Provident Fund to widows and orphans of workers killed in mine accidents.

Gihwala, appointed joint curator with accountant George Papadakis, said "the good news" was that these beneficiaries would receive full payments for March, and might also get arrears payments for January and February, when they received part payments.

"It has been a bit of a roller-coaster ride, but we will do our best to ensure that they get a substantial amount, if not all (that is due). So they can have a good Easter."

Asked where this money was coming from, Gihwala said the curators had secured close to R20-million in refunded VAT from the South African Revenue Services after they had managed to reverse a transaction they believed to have been fraudulent.

Gihwala detailed a report compiled by the curators for the Cape High Court that was sealed on the orders of Judge President John Hlope, ahead of Tuesday's hearing.

He said they had found evidence of theft and fraud and that the shortfall was "around R1-billion".

"There is no money in the kitty," he said.

However, the group had "some significant assets", which included "pristine" property near Plettenberg Bay and Port Elizabeth, the Fidentia office park at Century City, the Facets lifestyle centre, also at Century City - which is owned by the wife of Fidentia Asset Management boss J Arthur Brown - and Sante Winelands wellness centre in Franschhoek Valley.

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