Johannesburg - Absa is the first bank to be sued for failing to exercise strict enough control over about R218m in investor funds.

This is the amount that passed through an account at Absa’s Booysens branch under false pretences and relates to Ovation, an investment scheme with links to the controversial Fidentia scandal.

The employee who helped open the account has been dismissed while the founder of Ovation, Angus Cruikshank, committed suicide in 2006.

However, Ovation’s curators want Absa to repay R200.8m and have served summons on the country’s largest retail bank.

Ovation has been in curatorship  since March 2007 when its close links to the Fidentia group, which was put into curatorship in 2007, became apparent.

When Fidentia was put into curatorship it was busy acquiring Ovation. The deal was however never completed.

In their investigations, the curators of two of Ovation’s subsidiaries, Ovation Global Investments and Ovation Global Investments Nominees, discovered that an amount of R218m had passed through an account at Absa’s Booysens branch.

The account had been opened in the name of Ovation Nominees and the money paid into it should have been paid into money-market instruments in terms of investors’ instructions.

This was not done and the money was transferred to various entities under the control of Cruickshank.

 - Sake24