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Cape Town – The deVere Group said it provided evidence of wrongdoing to OffshoreAlert to highlight the alleged dealings of the Belvedere Management Group.
OffshoreAlert’s David Marchant exposed Belvedere’s alleged Ponzi scam worth around R200bn, which implicated Cape Townian Kobus Kellermann.
OffshoreAlert described Belvedere as “an essentially criminal enterprise” saying it has evidence of “funds that are blatantly fraudulent, including a current $130m Ponzi scheme in Cayman” and “funds that simply disappear or fail in dubious circumstances, including the £400m Harlequin Property Fund that has been unraveling over the last few years.”
BizNews publisher Alec Hogg picked up on the international expose and revealed that Kellermann, who runs Cape-based money manager Clarus Capital, had been fingered as the mastermind in the report.
READ: Capetonian Kellermann accused as kingpin of R200bn Belvedere Ponzi
The deVere Group, which is one of the world’s largest independent financial advisory organisations, was linked to Belvedere said Hogg, who wrote:
“As I started unpacking the South African connection of the massive Belvedere Ponzi scandal exposed by OffshoreAlert’s David Marchant, among the early conclusions was that the high-pressure sales company deVere was an integral part of the scam.”
READ: Belvedere Ponzi: The deVere connection – victim or partner?
On Wednesday, The deVere Group CEO Nigel Green told Fin24 in a statement that The deVere Group welcomed the investigation into Belvedere Management Group.
“We’re pleased to support the work being carried out by OffshoreAlert, championing the progress being made by the authorities and agencies investigating this matter, and are happy to continue to provide evidence of wrongdoing when we find it.
“We suspect that this case could turn out to be one of the largest financial scams in history and we will do whatever is necessary to recover value lost by investors worldwide.”
Green said “deVere, other brokerages, and clients across the world, have been badly let down by the custodians, namely the administrators and fund managers, of these funds.
“We are deeply concerned that alarm bells were not rung before now by those who had an overview of the situation. It has come to light that there were seemingly clear warning flags and that these seem to have been ignored by professional service providers trusted by deVere and other brokerages.
“We urge all those who have any information regarding this case to report it directly to the authorities.
“Additionally, we’re calling on all stakeholders in the financial services industry to work more closely together to ensure that this does not, and cannot, happen.
“This case must act as a catalyst to drive up client protection and wider industry standards.”
Green said the reason for the organisation’s interest was that, “like many other international brokerages, several years ago deVere was approached by the fund manager of a Belvedere-administered fund to invest in the Strategic Growth Fund (SGF).
“At the time, SGF was described as ‘best of breed’. It was outperforming the market in the early years at the time of any client introductions and all due diligence was carried out by deVere, other brokerages and life companies.
“However, from 2011, the SGF considerably underperformed and clients were advised to withdraw.”
In early 2013, Green issued a memo to all his managers advising them to ask clients to withdraw from the SGF. A few days later the fund administrator suspended the fund due to, it can be reasonably assumed, the many withdrawals from deVere clients.
“Some of this fund has since been released and some of our clients, fortunately, withdrew before the fund was frozen,” said Green.
“We are hopeful that the reported police investigation will result in assets being recovered for the benefit of investors.
“From the in excess of a reported 120 or so funds, this is the only Belvedere-administered fund in which deVere clients were invested.
“Although a relatively small number of our clients have been affected by this, even one would have been one too many. We will continue to use our resources and best endeavours to help bring this situation to a satisfactory close for our clients.”
WATCH Alec Hogg's interview with deVere Africa chief Greg Stockton about the reasons why his company helped OffshoreAlert blow the whistle on alleged Mauritius-based Ponzi scheme Belvedere - arguing that although deVere's SA clients may have lost about £3m (R50m), it is a small part of their savings and light relative to the losses of others.
UPDATE:
Since publication of the article above, several regulatory authorities have conducted investigations into the allegations of fraud and of a possible Ponzi scheme and have found as follows:
The Guernsey Financial Services Commission having reviewed their Enforcement Division’s report and accompanying evidence concluded that no further action will be taken and that their proceedings are at an end.
The US based Chartered Financial Analyst Institute stated, after reviewing the information available to them, that their Professional Conduct program decided to close its investigation and to take no disciplinary action, reserving the right to reopen the matter if new information comes to hand.
The Financial Sector Conduct Authority found no evidence of any breaches of the relevant South African financial sector laws.
