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Before his mysterious death, the late Jeff Wiggill (55), who masterminded the R1bn First Strut fraud, had his life insured for tens of millions of rand. Among the underwriters was Discovery Life, still smarting since paying a fortune to the Brett Kebble estate after the apparent murder of the mining fraudster – an event later discovered to be an assisted suicide. Discovery wants to wait until the investigation into the execution style death has been concluded. Wiggill died in extremely suspicious circumstances, his body, with gunshot wounds to the head, found in Soweto next to his Bentley. The dead man's life partner, Alexander Klencovljevic (30) took Discovery to court to hasten the payment of the R18m life insurance policy. A judge found in his favour. Discovery Life’s deputy CEO Kenny Rabson talked to us about this bizarre court case – and even stranger court ruling. – AH
ALEC HOGG: This special podcast is brought to you by Sanlam Investments. In the studio, we have Kenny Rabson who is the Deputy CEO of Discovery Life. You guys have been in court lately and certainly hitting the newspapers, Kenny.
KENNY RABSON: Yes, we’ve had this claim from Wiggill who is obviously well known in the financial services industry, with the whole First Strut debacle. We’ve had two particular policies that have been contested and effectively, we haven’t declined to pay them at this point in time. In fact, we’re just waiting for the outcome of an investigation. The beneficiary took us to court on the policy, to make us pay prior to the final outcome of the investigation.
ALEC HOGG: Let’s just go back a little. Jeff Wiggill is as you say, well known through First Strut. First Strut were intimately involved with the Eskom projects. They took R1bn of financial services’ money, which is gone. The bonds have gone. The money is gone, so he himself is under somewhat of a cloud. His partner decided to take you to court. On what basis?
KENNY RABSON: Well, really, on the basis that they’re a beneficiary to a policy. They’ve put in a claim. Discovery, in his opinion, doesn’t have all the evidence required to not pay at this point in time and in fact, it’s true that Discovery is in the process of really waiting for information.
ALEC HOGG: How did Wiggill die?
KENNY RABSON: To the best of my knowledge, he was shot and I think, found next to his Bentley motor vehicle somewhere in Soweto. Certainly, even at that point in time, as soon as one hears that type of event, all suspicions are raised and one becomes very concerned as to what’s really going on behind this claim.
ALEC HOGG: We had the Dewani case in Cape Town and now we’ve had Brett Kebble as well, who was fairly contested. In the Dewani case, there was foul play. With Kebble, one’s not too sure yet. Are you concerned that there could have been something more to this departure, or the death of Wiggill?
KENNY RABSON: Absolutely. If you look at the information available, there was an article in the Mail & Guardian going back to 2010, which really made a statement that Wiggill and the business have been immersed in 20 years’ worth of fraud. When you see that type of information, you obviously start questioning the source of the funds paying these premiums. Has there been any non-disclosure on the application form? Is there some type of risk that, had we been aware of everything at the outset, we may not have taken this policy and insured him for the amounts of cover that he took out insurance for?
ALEC HOGG: How much was he insured for?
KENNY RABSON: With us, its two separate policies, really, amounting to just around R18m-odd. A large portion of that in fact, is reassured out so even though Discovery is making the decision in terms of the ultimate claim, the reassurers obviously play a huge part as well.
ALEC HOGG: And to the best of your knowledge, how much outside of Discovery…? As you said, he didn’t just come to you.
KENNY RABSON: I’m not sure of the exact amounts, Alec.
ALEC HOGG: Is it a multiple of 18?
KENNY RABSON: Yes.
ALEC HOGG: So it was a bit like Kebble. He went fishing around the marketplace, and got as much life assurance as possible. How soon before he died were your policies written?
KENNY RABSON: Well, the earliest one started in 2005 and that’s actually the small policy here. The bigger policy, which is over R16m, started in 2010. Certainly, this is the period where all the fraud was going on.
ALEC HOGG: So your suspicion is that he took this out maybe, on the basis that it would give him an out if things go too hot.
KENNY RABSON: Potentially. Obviously, that’s not the basis of not paying the claim. I guess the basis is just… we’re not sure what is going on. There is an investigation, which was ordered by the Master of the Supreme Court to try to ascertain exactly what’s going on.
ALEC HOGG: What's the status of that investigation?
KENNY RABSON: I think that investigation is still ongoing. It could take quite a while. These investigations are typically quite time-consuming. Many people are interviewed and subpoenaed. I think there’s still quite a way to go. It’s quite possible that these things could drag for a year or two.
ALEC HOGG: What would make you not pay the claim?
KENNY RABSON: Well, we have two concerns. (1) On the application form, the question is always asked 'are there any other risks we should be aware of'. Obviously, outside of the normal medical questions, which would be on an application form, there’s a question that asks ‘any other risks we should be aware of that could materially impact the risk that we’d be taking on’ and we give examples there. 'Are you involved in any narcotics, theft, and robbery, and various things like that which certainly give the applicant the impression that we're looking for criminal-related activities in that question. The question is very leading to ascertain if the person is involved in any suspect activities, so to speak.
ALEC HOGG: So if you don’t admit to that, you take it out, and you are involved in criminal activities, there's a very good chance that you know upfront that your heirs are not going to be paid out.
KENNY RABSON: Exactly. When someone fills in that question, they leave it, blank. They’ve certainly read it, so they know that it’s a risk, and that if we ascertain anything down the line we may not pay.
ALEC HOGG: It's pretty clear Kenny that this guy was a fraud. It's all over the town. Everybody knows that. The money's gone.
KENNY RABSON: Yes, I think it just has to be formalised in terms of the investigation. Really, the court case that has transpired up until now has been that the acting Justice involved here has ordered us to pay. We've applied for leave to appeal, not on the basis of not paying the claim (in fact, we haven't declined it up until this point). In fact, we'd just like to await the outcome of the investigation before we decide exactly what should be done in terms of this policy. At this point, there hasn’t been an actual decline in terms of the payment.
ALEC HOGG: That's a rather strange decision by the court – to instruct you to pay.
KENNY RABSON: Well, we found it very strange. The court is effectively, with all the information on the table, making a ruling in favour of the beneficiary whereas we think they could have maybe said 'we need to make a decision quickly'. In other words, make a decision on whether you're going to pay or whether you’re going to decline.
ALEC HOGG: You said there were two reasons. The one was on the policy document where, if you’re involved with criminal activity, you need to disclose it. What was the other reason?
KENNY RABSON: Well, the other is really to ascertain whether these premiums that have been paid to us are a product of all the fraud that was going on. If that is the case, you could easily have the liquidators potentially coming back to claim all the premiums back, so we need to await the outcome of that before we make a firm decision on what needs to be done now.
ALEC HOGG: It's an interesting case. We did have Brett Kebble, who apparently had an assisted suicide. Did he take any policies with you?
KENNY RABSON: Yes, he had a very big policy with Discovery. I don't remember the exact quantum.
ALEC HOGG: Bigger than this one?
KENNY RABSON: Bigger than this one. We paid the policy and arguably, it was paid sooner than it should have been paid. Obviously, it’s taken a long time to really work out what’s been going on in the Kebble case, so we paid it. A lot of public pressure and high profile name obviously, so you want to be seen to pay quite quickly, but potentially, we were too quick in paying that claim.
ALEC HOGG: Why?
KENNY RABSON: Obviously, policies can be declined if there's suicide in the first two years of the policy. Assisted suicide in fact, is not clearly defined in terms of what life officers should do, so it was certainly debatable what we should be doing. At that point in time, we weren’t aware at all of what the circumstances were. It just looked like a straight murder and therefore, we obviously paid.
ALEC HOGG: How quickly did you pay the policy?
KENNY RABSON: Alec, I don’t remember the exact timeline, given that it was a few years ago, but we paid it quite quickly.
ALEC HOGG: You mean weeks rather than months.
KENNY RABSON: Yes.
ALEC HOGG: If, once those investigations into Kebble had concluded (and they seem to be pretty clear now as well), would you ever go for the beneficiaries and try to get the money back?
KENNY RABSON: No. For us, it's water under the bridge now but I certainly think we’ve learned that any life officer needs to be able to investigate a claim properly. In fact, we do this in the normal course of events. Very often, we’re waiting for a police report, a toxicology report, or a post-mortem etcetera, so it’s actually common for a life officer to get all the information prior to actually making the decision. We feel here that in fact, this is what Justice Bekker has taken away from us – the ability to in fact, await the correct information. For us, this has huge implications on the whole industry. Effectively, it could be a ruling that life officers cannot wait anymore to gather all the information to make a decision, with which we obviously have a tremendous problem.
ALEC HOGG: So you have an obligation then, to appeal.
KENNY RABSON: We think we have an obligation to appeal for our remaining policyholders because at the end of the day, we’re managing an insurance book for our shareholders of the company and for our reassurers. Reassurers allow us to take risks on their behalf, assuming we’re underwriting the cases to a certain standard – that they would be happy with that risk. It therefore has implications multiple parties here and obviously, we have to make sure that we are satisfying each component.
ALEC HOGG: And when is it likely that the investigation into Jeff Wiggill's death will be finalised?
KENNY RABSON: Alec, I don’t know. I don't think we really have a clear time horizon here, but it’s going to still take some time.
ALEC HOGG: So it could take months – even years.
KENNY RABSON: Absolutely. What's coming out is it's quite a complex web of information and fraud that’s been going on as you mentioned right up front – over R1bm wiped off. Some of them – a pensioner's pot of money being wiped out.
ALEC HOGG: An interesting story and one that has, very much, two sides to it. Kenny Rabson is the Deputy CEO of Discovery Life and this special podcast was brought to you by Sanlam Investments.
*Theremay be small errors in this transcript.
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