Data provided by iNet BFA
Loading...
See More

Brown's lawyer dismisses Fidentia probe

May 06 2013 19:15 Sapa
Fidentia

J Arthur Brown has been found guilty on two count of fraud. (Picture: Sapa)

Related Articles

Fidentia: Millions not accounted for

'Brown does not deserve jail'

Sentencing arguments in Fidentia trial

Brown: State can pursue dropped charges

Brown at peace with prison

J Arthur Brown sentencing continues

 

Cape Town - The Financial Services Board (FSB) did not have the authority to inspect Fidentia's offices in 2006, the Western Cape High Court heard on Monday.

Braganza Pretorius, for former Fidentia boss J Arthur Brown, said the FSB had not taken into account the correct inspection legislation, the definition of a financial services provider, and when Fidentia was licensed.

He put it to the FSB's chief financial officer Dawood Seedat that the inspection of Fidentia was therefore not authorised in terms of the Financial Advisory and Intermediary Services Act.

He said any information obtained during an unauthorised inspection would have been illegal.

Seedat replied that the inspection was authorised in terms of the Inspection of Financial Institutions Act, which made provision for associated institutions.

Judge Anton Veldhuizen said the FSB would have been compelled to do something about anything criminal it might have found during an unauthorised inspection.

The court earlier heard that the FSB started investigating Fidentia after receiving complaints of mismanagement of clients' funds from a former Fidentia employee.

The investigation spanned from June 2006 to the end of January 2007, and included an inspection and interview with Brown.

Seedat was testifying in aggravation of sentence in Brown's trial, after his conviction on two counts of fraud.

Seedat said one of the key findings was a R406m discrepancy in Fidentia's funds.

He said Fidentia's auditors indicated in a report they could not conduct an audit for 2004/05 because of various outstanding documents and obstacles.

One of their findings indicated that the liability to clients exceeded their investments.

Pretorius asked Seedat why the FSB had not noticed this key finding in 2004.

Seedat replied he was the wrong person to ask such a question.

Judge Anton Veldhuizen criticised the State for calling a witness whose testimony was unrelated to Brown's admissions.

"He hasn't been convicted of having stolen any money from Fidentia Asset Management, Fidentia or anywhere else... He hasn't appropriated any client's money. I don't understand this," the judge said.

"This is not correct. I think the State has mismanaged this. You accepted the plea of the accused on the basis of what he did; he saw potential prejudice."

Veldhuizen told Brown's lawyer he would take into consideration only the parts of Seedat's evidence which were directly related to the convictions.

"I cannot sentence the accused for something more serious than what he has been convicted of," he said.

Seedat's cross-examination resumes on Tuesday.



Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

fidentia  |  j arthur brown  |  corruption  |  fraud
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

“Hippie sense makes business sense,” an entrepreneur said, adding that "purpose" was core to success.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...