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By Ian Kilbride*
It has been about a month since my last article but that was all done simply to get you all panting with excitement for this latest instalment. Actually, Alec Hogg, an old friend and fellow entrepreneur told me to “get some real work done”, so I did and left the field open for his great journalistic mind.During my “working holiday”, doing some business, Alec broke in South Africa, the Belvedere Ponzi Scheme of Messrs Kellermann and Cosgrove and exposed the poor investment process of such firms as De Vere and many others.
Well done Alec, you have taken up the cause of the private investor, a cause that Bruce Cameron started but had to some extent lapsed since his retirement. The strangest thing is that I have been able to watch, at arm’s length, how Ponzi scheme participants react to exposure and how regulators then scramble desperately to play catch up.Over the last month I have been doing business across South Africa, London, Dublin, Jersey, Guernsey and Mauritius, all of it fund and investment related, but via my much loved iPad and its many Apps you can follow all of the news as it occurs. I was initially surprised by the response of the “Ponzi Club”, those somehow linked to these criminal enterprises, but was then reminded very much of Fidentia.Why do they initially try to only shrink the numbers, “$16bn is ridiculous”, or “our clients invested only $50m”, or “there is possibly only $100m not $1billion missing”. I am sorry but when I became an LLB, albeit many years ago, stealing $1 was theft, let alone stealing or mislaying $50m to $1bn of client funds, or did I miss some legal paradigm shift?
It was then amazing to see how these SA born charlatans have made business more difficult with service providers and regulators in other jurisdictions for everyone else. We are tarred by their dirty and rather creepy brush. I was lucky in that I had the benefit of 30 years of working in all these different justifications, but the sharp jokes about “Ponzi Scheme South Africans” and being asked whether we all have second homes in Australia did lead to one or two Anglo Saxon replies, but then to the usual beer or two!
On a slightly different tack, is it not amazing that neither EMI or any other giant record company changed the way music was distributed, no it was Apple. It was also none of the “Motown Giants” who reorganised the car industry in the US, no it was a Silicon Valley “Suid African”, via Tesla Motors. So try on two more “new age business” statistics. The total annual income of BMW, Audi, Porsche and Renault for the whole of 2014 was $15bn. This combined total is exactly same as that achieved by Apple, but they did that in only their 4th quarter! Secondly, Apples nett cash is $145bn and that would buy outright BMW, Renault and Porsche with change for a party!So beware, the next best thing may not just be Apple watches, but may in fact Apple cars!
Ian Kilbride is the Chairperson of Warwick Wealth and the Spirit Foundation, (formally known as the KIDS Foundation). See all of his articles on iankilbride.com and every week on Biznews.
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UPDATE:
Since publication of the article above, several regulatory authorities have conducted investigations into the allegations of fraud and of a possible Ponzi scheme and have found as follows:
The Guernsey Financial Services Commission having reviewed their Enforcement Division’s report and accompanying evidence concluded that no further action will be taken and that their proceedings are at an end.
The US based Chartered Financial Analyst Institute stated, after reviewing the information available to them, that their Professional Conduct program decided to close its investigation and to take no disciplinary action, reserving the right to reopen the matter if new information comes to hand.
The Financial Sector Conduct Authority found no evidence of any breaches of the relevant South African financial sector laws.
