Thirteen days is virtually all it took the Fidentia group to buy a company managing the trust funds of widows and orphans.
|||Cape Town - Thirteen days is virtually all it took the Fidentia group to buy a company managing the trust funds of widows and orphans and involving more than R1 billion.
And based on court documents, it took just under two-and-a-half years for the money to be misappropriated.
Last month Arthur Brown, the former head of Fidentia, was sentenced to an effective R150 000 fine or three years in jail after being convicted on two counts of fraud.
The National Prosecuting Authority (NPA) has applied to appeal against this sentence.
One of the counts Brown was convicted of involved Fidentia’s takeover of the Mantadia Asset Trust Company (Matco).
Based on two sets of court documents - the NPA’s application to appeal and a 2010 matter brought by Matco - it took barely two weeks for Fidentia to gain control of Matco.
The 2010 document listed 19 defendants in the Matco matter including former directors and shareholders of Matco, Brown, and directors later appointed by Fidentia.
It was found that Matco’s trustees, directors, shareholders and Old Mutual had “acted recklessly” and breached their duty to the trust and its beneficiaries.
Matco, now known as Living Hands, was a trust administration company that managed the trusts of widows and orphans.
According to the NPA papers, Matco had a current account fund, with at least R69 million, used for the daily needs of beneficiaries in various trust funds.
It also had a surplus investment with Old Mutual “which covered the future needs of these funds of more than R1bn.”
Based on the NPA court papers and the 2010 document:
* October 6, 2004 - Brown “was directly involved in the proposal” to buy Matco for R93m and on this day signed an agreement.
* October 14, 2004 - A letter with Brown’s signature describes him as Matco’s “incoming director”.
* October 15, 2004 - Fidentia Holdings instructs Standard Bank in writing to transfer R93m “seemingly from the Fidentia Holdings account at Standard Bank… to the account of Matco.”
A letter from Fidentia Asset Management (FAM) to Old Mutual says: “We hereby instruct you to liquidate the R150m of Matco assets with immediate effect and transfer such proceeds into the following account: Fidentia Asset Trust Management”. Old Mutual writes to Matco that it is unsure about Fidentia’s instructions and will only act on Matco’s instructions. Then in a letter to Old Mutual, Matco confirms that Fidentia Asset Management was appointed investment manager with effect from October 14 and had full authority to deal with the investment portfolio, including moving “a portion of the entire investment” from Old Mutual.
The NPA’s court papers say Brown tried to get the R150m from Old Mutual “by deceit”.
* October 16, 2004 - The balance of the Fidentia Holdings account from which the payment to Matco is to be made stands at R353 316.97 - nowhere near the R93m purchase price.
caryn.dolley@inl.co.za
Cape Times