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Brown fights on, despite court knocks

Apr 15 2012 13:09
Adri van Zyl

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 unlawful.

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 application.

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 application.

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 investment.

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 curators.

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.

 - Sake24

For more business news in Afrikaans, go to Sake24.com

fidentia  |  j arthur brown



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