FSB on Fidentia – ‘crime doesn’t pay’

Fiona Zerbst, FAnews Online Editor

For those who have been following the Fidentia saga closely, the Western Cape High Court’s verdict vis-à-vis J Arthur Brown – guilty on only two counts of fraud – may seem oddly anti-climactic, given that he was originally arrested on 197 counts. By negot

The FSB was naturally rather pleased, releasing a statement to the effect that the judgment has cleared it of wide-ranging allegations. Readers may remember that the FSB applied to have Fidentia placed under curatorship in February 2007 – the FSB claimed the company lacked proper financial or investor records.

“Throughout this time, the FSB has maintained that Mr Brown had a solid case to answer, the details of which would be uncovered in a court of law. It is also worth noting that for the duration of this trial, the Regulator and some of its officials were vilified; accused of things they have never done. In fact, so dedicated was this smear campaign that the Regulator was portrayed as one resembling a crime syndicate, among other accusations,” the FSB said.

It seems a Pyrrhic victory, though. The staggering losses incurred in this matter – including taxpayers’ money, it must be added – should make us all cautious about cheering too loudly. The curators, George Papadakis and Dines Ginwala, say they are assisting the NPA with various criminal cases where they are involved in prosecuting – meanwhile, their forensic accounting fees amount to R15 million to date: attorneys’ fees come to R5 753 847.72; counsel’s fees and disbursements come to R9 739 145.14 and the curators’ fees alone amount to R17 097 084. This isn’t chump change.

Many unanswered questions

J Arthur Brown said he ‘felt vindicated’ that he had been acquitted of seven other charges (what happened to 197 charges, one might well ask?). The FSB contended that being found guilty on two charges was enough of an indictment – it may be that the judgment has been met with relief given that some people thought Brown would ‘get away with it’.

One chapter has been brought to a close, but it is clear that there are still many unanswered questions. According to the Curator’s Report to the Court, dated 29 January 2013, R248 778 954 has been recovered and distributed to beneficiaries to date, but other cases are pending and the financial outcome of those cases should fall under the spotlight.

With regard to criminal prosecutions, Mel Cunningham’s trial is yet to commence, while Piet Botma’s trial has been only part-heard. Cunningham has been charged with fraud arising from the sale of Infinity to Fidentia (it has now been sold with the approval of the FSB), and the Asset Forfeiture Unit has taken control of Cunningham’s estate. The Santé Hotel Wellness and Conference Centre still poses a challenge as the previous tenant has yet to be interrogated before the Master of the High Court.

Many Fidentia investors are still waiting for their money, after a gruelling six years. It was bad enough watching Brown splashing out on SUVs and properties with investors’ money; but with Brown no longer the focus of investigations, investors must watch the slow-motion slaying of a veritable hydra – a many-headed beast of a matter, that will not be fully wound up any time soon. The entire shameful chapter seems to suggest that, even if crime doesn’t pay, it certainly doesn’t pay out, either.

Editor’s thoughts: Do you think the beneficiaries will ever receive the monies owed to them? Comment below or email fiona@fanews.co.za.