Johannesburg - J Arthur Brown, alleged mastermind behind the
Fidentia debacle, again received a harsh knock in court, but still maintains
that there were no irregularities at Fidentia and that the curatorship was
At the end of March in the Western Cape High Court Judge
Elizabeth Baartman ruled that the curators could proceed with paying out R136m
to three groups of investors who had invested money in Fidentia.
This application was opposed by Brown and various other
parties, but Baartman rejected the evidence handed in which was intended to
show that the payments would not be in investors’ interests.
Meanwhile, Brown has lodged an application with the Western
Cape division of the high court to have the curatorship set aside.
He has also
lodged an application with the North Gauteng division of the high court for the
Financial Services Board (FSB) and its officials to compensate him for the
damages he suffered as a consequence of the curatorship.
It is understand that
Brown is claiming R450m from the FSB.
The FSB is currently putting together its response to the
application to have the application for curatorship set aside. It has confirmed
receipt of a summons for compensation and states that it will oppose the
The application by the Fidentia curators to be permitted to
disburse an amount of R136m to the beneficiaries of the Living Hands Umbrella
Trust (LHUT), the sectoral training authority of the transport industry (Teta),
the Antheru Investment Trust and investors in Balltron, was to have come before
the court in December.
However, it was postponed because the application was opposed,
initially by Brown and three other parties. Various other investors, including
the JAW Brown Family Trust, the ZC Brown Family Trust and the Antheru
Investment Trust were added later as opposing parties.
Baartman ruled that the amount could be paid out, but that
R27.9m should be held back for claims from investors in the Antheru Investment
Trust owing to a dispute over the amount it is owed. Antheru was given 14 days
to produce proof of this amount owed.
The opposing parties argued that the payout the curators
wished to make would not be in the
interests of investors and that they could provide proof that the money Fidentia had been entrusted with by investors had not be misappropriated by
either Fidentia or Brown, as claimed by the FSB and the curators.
The opposing parties also argued that they would submit
proof that the curators had not, as had been claimed, already paid out an
amount of R109m to the LHUT.
Baartman ruled that the evidence was insufficient to oppose
The opposing parties' protestation that the curators had
unlawfully sold the assets of Fidentia's subsidiaries to recover the amount of
R136m was also rejected by the court.
FSB: R1.36bn misappropriated
Fidentia was placed into curatorship in 2007 following an
FSB inspection report into its activities, in which it was found that an amount
of R1.36bn had been misappropriated.
At that stage the LHUT, a provident fund for the widows and
minor children of deceased miners, was Fidentia’s biggest client with a R1.33bn
Brown is contesting the content of the inspection report
that led to the curatorship and he is contending that the loss of some R1.3bn
by the LHUT beneficiaries is the result of “irresponsible actions” by the
There were initially 192 criminal cases of fraud against
Brown, five of which are still pending. He denies being guilty of the charges.
The others were abandoned.
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