FSB up in arms

Fiona Zerbst, FAnews Online Editor

South Africans took to Twitter to vent their frustration with the sentence handed down to J Arthur Brown by the Western Cape High Court yesterday. Brown’s sentence – a fine of R150 000 or 36 months in prison – is patently little more than a slap on the wr

“Strange world we live in. Stormers fined R230000 for abusing ref. J Arthur Brown defrauds millions at Fidentia. Sentenced to R150000 fine,” tweeted Brenden Nel. “J Arthur Brown: R150000 fine while mineworkers’ widows and orphans live in poverty. Justice, nê?” tweeted Mmanaledi Matagobe.

In a statement released yesterday afternoon, the Financial Services Board (FSB) said it was ‘disappointed’ with the sentence because it ‘does not acknowledge the extent of the damage caused by Mr Brown’s actions’. Brown was convicted on two counts of fraud which allowed him access to funds intended for the beneficiaries of Mantadia (Matco), which was renamed the Living Hands Umbrella Trust by Fidentia.

This sentence does nothing to deter white-collar criminals and only furthers the perception that crime can pay.

“The Regulator had hoped that Mr Brown would be sentenced to a jail term that adequately reflected the seriousness of the crimes he has admitted to committing (at least the prescribed minimum of 15 years),” the FSB stated. “The type of sentence handed down today does very little to inspire the public’s confidence in the country’s judiciary system.” That’s possibly an understatement.

The National Prosecuting Authority (NPA) will no doubt appeal the sentence; in the meantime, the FSB says it respects the decision of the court and will abide with it. While Judge Anton Veldhuizen says Brown’s ‘trauma and personal suffering’ played a role in the judgment, one can only ask if he gave any thought to the trauma and personal suffering of the victims, who do not even have the satisfaction of seeing Brown punished. He is effectively walking away a free man.

Spotlight falls on the curators

Not everyone wants to see Brown behind bars, though. About 500 former mineworkers are now intent on suing the Fidentia curators, Dines Gihwala and George Papadakis, saying they believe Brown can help them to recover their money.

We know that Brown has made allegations against the curators in the past, so it isn’t surprising that he’s fashioning himself as some kind of post-trial Robin Hood, vowing he won’t rest until the money is recovered from the curators. An article published in Noseweek magazine alleged that the curators have defrauded the companies under their curatorship of millions. There doesn’t appear to be any hard evidence of this, however.

What we do know is that the curators’ forensic accounting fees amount to R15m to date.

Brown has also alleged that the FSB has been gunning for him to protect financial services companies that Fidentia was taking business away from – the notion being that the FSB’s executives have been trying to enrich themselves by means of the appointed curators. Small wonder that the FSB is not happy with Brown’s lenient sentence.

The sad, sorry saga continues...

Editor’s thoughts:
Considering that Fidentia’s financial director, Graham Maddock, received a seven-year jail term for confessing to his fraudulent activities and turning State witness, you’d be forgiven for thinking justice in South Africa is, well, unjust. What do you think of the sentence? Do you think the State bungled its case against Brown? Comment below or email fiona@fanews.co.za.