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Seven years later – final chapter in story of J Arthur Brown and his Fidentia Scam

Seven-and-a-half years after my story broke open about what was to become the Fidentia Scandal, its cerebrally-challenged mastermind J Arthur Brown will be going to prison. His original slap on the wrist has been replaced, by the Appeals Court, with a 15-year jail term. This Rational Perspective traces what happened and suggests what can be learnt from the sorry saga. We have republished two of my February 2007 pieces – read them by clicking here. – AH

ALEC HOGG: Good morning. It’s the 2nd of December. I’m Alec Hogg and here’s The Rational Perspective. Well, this morning it’s a story that’s been seven years in the making. In 2007, I received a tip-off that an organisation called Fidentia, which we’d been looking into (unsuccessfully though, I must have you know) had started to unravel.

Last night we got news, that the Supreme Court of Appeal has overturned a sentencing – a very light sentencing – on the man behind that story, J. Arthur Brown and his company, Fidentia. Initially, the court action saw him being found guilty on two counts of fraud and receiving little more than a slap on the wrist. The public was outraged, given what had happened in this case. The Financial Services Board took it further and the result of the Supreme Court of Appeal yesterday, was that J. Arthur Brown is going to jail for 15 years.

So, what is this story? J. Arthur brown is a fellow from Port Elizabeth who spent a couple of years (unsuccessfully) trying to get a BCom degree at the University of Port Elizabeth. That, of course, did not deter him from claiming that he’d passed that degree. He somehow found a way of getting Trustees of Pension Funds to give over the assets in these funds to his organisation, which he called Fidentia. He had a veneer of respectability, created by hiring sports stars.

Watch the full Rational Perspective:



These included Eric Simons the former Springbok cricket coach, Louis Koen who was very close to him (earning R200, 000.00 per month), Dave Callahan who was caught up in it, unbeknown to exactly what was going on, and a Springbok bowler called Merrick Pringle who was so incensed at our disclosures about the Fidentia saga, that he threatened to sue us. In fact, it took some of his friends to later explain to him that he’d been caught up in something that he wasn’t sure (or didn’t know) the background to, before he withdrew those potentially damaging claims.

But that was J. Arthur Brown’s modus operandi. Put people around you who make you look respectable, find weak Trustees of Pension Funds, get them to move the assets across to you, and then bribe them so that they turn their heads the other way. A good example was the one that was mentioned in court papers, of a Pension Fund that had R100m. It was a small bier by J. Arthur Brown’s standards. He later got a Pension Fund at R1.1bn, but the Trustee of this Pension Fund was told to look elsewhere when Brown took the money.

Then, instead of investing it in Money Market instruments in one of the Big Four Banks (as was prescribed), he invested that money in a few holiday homes for himself, luxury vehicles for himself and his cronies. In addition, he bought a spa, which was uncompleted for way over the realistic market price as well as getting involved in some companies in Johannesburg, including Software Futures, which was a division of MGX, which he massively overpaid for. Similarly, with the Unit Trusts operation that he bought from mCubed.

All of this tells us a lot: that you need to go into the saga to unpack exactly who J. Arthur Brown was and how he managed to get away with as much as he did. The rational way of unpacking all of this is that when people are crooked, they will find others who are prepared to turn a blind eye, to be less than ethical, and to stand to one side as evil is allowed to perpetrate it’s misdeeds. It’s a lesson to all of us. None of us is likely…or hopefully, very few who are watching this video are likely to become J. Arthur Browns.

However, going through red robots, playing on your cellphone while you’re driving, or turning a blind eye as others breaking the law is a start to what Russell Loubser – the former CEO of the JSE – said…drift. Eventually, you drift so far that you can end up doing what this devious human being decided to do. He’s going to jail for 15 years. For the rest of us, it’s often just our conscience.

This has been The Rational Perspective.
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