A fight-back campaign by the executive chairman of the embattled Fidentia Group of companies, J Arthur W Brown, is in tatters after further evidence of fraud and mismanagement came to light this week.
Brown, who had kept a low profile since the High Court placed his company under curatorship two weeks ago, went public in a series of media interviews after he hired a celebrity public relations company to represent him.
But Brown was slapped down within hours of launching his high profile fight-back campaign by both the curators of the companies and the Financial Services Board (FSB), which successfully applied to the Cape High Court three weeks ago to have Fidentia placed under curatorship.
Brown claims there were more than sufficient assets in the Fidentia group of companies to meet commitments to individuals and institutions.
He claims that payment problems to almost 100 000 widows and orphans of deceased members of retirement funds had occurred only after the companies were placed under judicial management.
However, the FSB said that the decision by the Cape High Court to place Fidentia under curatorship had been taken on the basis of overwhelming evidence of misappropriation and mismanagement, uncovered during a six-month-long FSB investigation, it said, adding that Brown had been offered numerous opportunitiesto challenge this evidence but had not done so successfully.
And the curators rejected Brown's claims that they were the cause of Fidentia's problems, mainly in failed payments to widows and orphans whose money is held in trust by the Living Hands Trust.
Personal Finance received more evidence this week of erratic payments by Living Hands to widows and orphans going back more than six months, while payments of monthly stipends ceased in January.
Personal Finance also has evidence of false investment statements being issued to institutions and companies with money invested through Fidentia Asset Management.
Most of the R1,4-million in the Living Hands trust funds has allegedly illegally been used by Fidentia Asset Management to buy assets that are registered in the names of various Fidentia companies.
Multilevel marketing company Balltron confirmed this week that it had opened a money market facility, in the name of a subsidiary, Savetron, with Living Hands.
This was done about three years ago after financial services company BOE was brought under the control of Nedcor and a similar facility was no longer available.
Alan Hardaker, Balltron's operations director, says that on the advice of Nedbank, a substantial amount of money was transferred to Fidentia Asset Management, which had a limited mandate restricting investments to a money market facility.
He says regular statements were provided to Savetron, indicating that the money was deposited with various banks.
Hardaker says the various bank guarantees were also provided by Fidentia to Balltron as security.
The FSB inspectors could find no trace of any Savetron money market accounts holding about R45-million.
- This article was originally published on page 2 of The Saturday Star on February 17, 2007