The financial adviser of J Arthur Brown has testified against the former Fidentia boss after striking a deal with the State.
|||Cape Town -
The financial adviser of former Fidentia boss J Arthur Brown took the stand in the Western Cape High Court for the second day of a multibillion-rand fraud case on Wednesday.
Chartered accountant Graham Maddock is the first witness the State is relying on to prove the allegations against Brown.
Maddock entered into a plea and sentence agreement with the State in 2008 for his role in the Fidentia saga. He served two years in jail and is under correctional supervision for the remainder of his seven-year prison term.
As part of the plea deal, Maddock agreed to testify against Brown.
On Monday, Brown who is defending himself, pleaded not guilty to nine counts, including four of fraud, corruption and theft.
He was arrested in 2007 after the lid on the Fidentia scandal was lifted. He is alleged to have misappropriated millions of rand from various companies in which people invested.
The fraud charges involve four entities - Fundi Projects, Teta (the state-owned Transport, Education and Training Authority), Antheru Trust and Matco.
On Wednesday, Maddock testified about money that was deposited into his trust account while he was the financial adviser to Fidentia Holdings, which initially traded as Brown Brothers Investment Management Services.
Maddock testified that he had difficulty explaining what he and Brown discussed after the Fundi account went sour because it was about a decade ago.
The court heard that Fundi’s director, Leon Grobbelaar, transferred R9.5 million into Maddock’s trust account for investment purposes between 2002 and 2003.
But when Grobbelaar became suspicious he asked to be reimbursed. While most of the money was repaid, Grobbelaar struggled to get the remaining R3m.
He took the matter to court and an order was granted that the R3m be repaid. But before the order was granted, Grobbelaar sent a number of letters to Brown and Maddock in connection with the money.
Maddock testified that he or his secretary had responded to Grobbelaar on Brown’s instruction.
“I was put forward as the auditor and the funds were to be placed into my trust account under instructions. My instructions came from Mr Brown,” Maddock said.
State advocate Jannie van Vuuren went through the tedious process of reading each letter of correspondence.
Judge Anton Veldhuizen had no problem with it. “I accept this isn’t a simple, straightforward matter. I have no difficulty if you and Mr Brown need to take your time. At this stage no one is under pressure.”
The trial continues on Thursday.
jade.otto@inl.co.za
Cape Argus