SA businessman 'innocent'

Johannesburg - South African businessman Barry Tannenbaum, accused of defrauding hundreds of investors in what may be the country's biggest corporate fraud, denied any wrongdoing and blamed the economic crisis for his company's woes.

"As has happened with other companies that have from time to time found themselves in a financial predicament, particularly in the present climate, I have found myself in such a situation," he said in an e-mailed statement on Friday.

Tannenbaum, who lives in Australia, said he had defrauded no-one and described accusations against him as wild allegations, speculation and conjecture.

"In short, the hype at this stage is such that whatever I say, will be disbelieved. Time will demonstrate that I have defrauded no-one," Tannebaum said.

Tannenbaum was said to have lured investors with the promise of 200% annual returns linked to pharmaceutical imports and was accused of forging AIDS drug orders to give reassurance when money started to dry up.

Lawyers and investigators said on Thursday hundreds of investors, including top businessmen from South Africa, the United States, Germany and Australia, were affected.

The case looks set to rank as South Africa's biggest corporate fraud and has shocked the country's business community, known for its conservative approach to risk and investment.

The South African Reserve Bank said it had become aware of the issue this week after complaints from investors who were no longer receiving their returns and would check if exchange control and banking rules had been broken.

Tannenbaum operated through his Frankel International and Frankel Chemical Corp companies and says in brochures his father was a founder of South Africa's No. 2 pharmaceuticals firm, Adcock Ingram. Adcock said it was his grandfather.

Documents posted on the internet by Investigator Specialised Services Group, a private law enforcement agency hired by investors to look into Tannenbaum, include what it said are forged purchase orders from Africa's biggest generic drugmaker, Aspen, which Tannenbaum allegedly used to show investors funds were coming soon.

Both Adcock and Aspen confirmed they had bought small amounts of supplies from Frankel, but said the purchase documents, including some involving life-prolonging anti-retroviral AIDS drugs, were fake.

- Reuters