Prosecution delays Fidentia trial
In February this year, the Financial Services Board (FSB) applied to place a number of businesses in the Fidentia Holdings stable under the control of a curator. This move followed a six month investigation into questionable financial transactions at the group, which allegedly resulted in hundreds of millions or rand being siphoned from the Living Hands Trust and the Transport Education Training Authority (TETA) among others.
The scandal caused the usual uproar with various media struggling to get to the bottom of the case. And it soon emerged that Fidentia would be one of the biggest cases of its kind in South Africa. The only certainty, as FAnews Online reported at the time, was that full details of the transactions behind the scandal would take months to unravel in court.
"Nothing is certain in this case except that it will take time to unravel. The FSB inspection started in July 2006 and took almost 6 months to complete. We will have to wait for the curators to report back to the High Court before we gain more insight into the magnitude of the Fidentia scandal". We repeated this view in March when the accused first appeared in court. "It took more than two months before the first arrests were made and we can expect the case to drag out in the courts for years to come."
Arrested six months ago
Fidentia kingpin J Arthur Brown and his former financial director Graham Maddock were arrested in March of this year. Both were subsequently released on bail of R1 million each. A third accused in the case was only arrested in August. Piet Bothma is the suspended chief executive of TETA and will be tried with Brown and Maddock. His crime is slightly different in that he is accused of accepting a substantial commission to place TETA money with Fidentia. His bail was set at R200, 000.
Those hoping for a speedy prosecution in this case will be disappointed. Despite the FSB gathering information for more than six months leading up to the trial, and despite a similar amount of time passing subsequent to the initial arrests, the prosecution is not yet ready to proceed.
This fact emerged when Scorpions' senior counsel requested a postponement till 12 February next year. So the 31 August 2007 appearance before the Cape Town Magistrate's Court turned out to be good Brown, Maddock and Bothma; but worrying for those seeking justice. Brown's attorney William Booth would not welcome further delays: "I agree to the postponement to next year, but reserve the defence's rights to object if at the next hearing the defence has not yet been furnished with the charge sheet and other documents."
Could this case be struck from the roll?
In extreme cases, the defence can object to further postponements and request that the court removes a case from the roll. Should this happen, charges against the accused are dropped and they could walk away free men. It is unlikely given the complexity of this case that such a decision would be taken lightly. While the respective defence teams for the Fidentia accused might make such request to the courts next year, we doubt they have too strong a leg to stand on.
The handling of the case thus far does pose a number of questions. The first is why it is taking so long to unravel the suspect transactions in this matter. Today's banking systems are extremely sophisticated and it should not be difficult for a team of forensic auditors to create a map of all Fidentia transactions.
Another question is why so few arrests have been made. Brown and Maddock were arrested a full two months after the story first broke, and they were certainly not the only Fidentia staff with knowledge of the financial transgressions. Bothma, arrested six months later, is surely not the sole driver behind moving money from an organisation to Fidentia. And what about the Living Hands Trusts. Was there no wrongdoing on the part of any of their trustees?
We hope that most of these questions will be answered. The Scorpions and other law enforcement bodies should make sure that their investigations leave no stone unturned and ensure that all transgressors are charged. If they accomplish this, then individuals on the fringes of the crime will think twice in future before engaging in questionable financial practices.
Editor's thoughts:
There are many unanswered questions around the Fidentia scandal. Where are the missing millions? How many other people received kickbacks and commissions for assisting Brown in moving funds? How many bank employees have turned a blind eye to questionable financial transactions? How many legal firms have failed to comply with simple 'know your client' requirements? If these questions have been properly investigated then we will certainly see more arrests in coming months. Do you think the Scorpions have made enough arrests to send a strong message against similar financial transgressions? Send your comments to [email protected]
