Wheels of justice turn slowly for Fidentia accused

It has been some times since we reported on the Fidentia scandal. Recent media coverage suggests that the wheels of justice are slowly turning. Fidentia's J Arthur Brown and Graham Maddock, who were arrested by the Scorpions on 6 March 2007, were each gra

Maddock was able to satisfy the bail conditions immediately, raising R100, 000 in cash and signing over a property in Cape Infanta as surety for the balance. He was pictured on local television news looking reasonably relaxed - and talking about how he was looking forward to spending time with his family again. Brown was not able to raise the cash as easily.

The problem with Browns bail posting stems from the requirement that bail money is not paid out of the proceeds of crime. This has resulted in the Scorpions and Browns lawyers being unable to agree on what constitutes acceptable surety. It is believed that an offer by Brown to use his Sunset Beach home as surety has been rejected. Browns advocate, Klaus von Lieres said 'they [the Scorpions] say there must be a link between the accused and the guarantee, and Mr Brown contends thats nonsense." Brown will remain in Goodwood prison until Thursday at the earliest.

Absa acts against Baloyi

While Brown and Maddock deal with the Cape Town Magistrates Court, Living Hands Trust trustee Dr Danyisa Baloyi has received tough censure from ABSA. On Tuesday, 20 March 2007, ABSA announced that it had fired Baloyi from her position as non-executive director on the boards of ABSA Bank and ABSA Group. ABSA stated: "This action is the culmination of a process to review the position of Dr Baloyi on the Absa boards, following public disclosures regarding her involvement with the Fidentia matter."

Baloyi's inappropriate involvement in Fidentia stems from the conflicting roles she held. As a trustee on the Living Hands Trust, her responsibility was to the orphans and widows who benefited from the trust. However, she was also a director of Fidentia Holdings, which owned 100% of Fidentia Asset Management (FAM). FAM was the company placed in charge of the funds invested by the Living Hands Trust. The Living Hands Trust was responsible for R1.4 billion of funds invested on behalf of the widows and orphans of mineworkers.

Another serious issue is that of an R8 million loan which Baloyi received from Fidentia. While Brown suggests there was nothing wrong with the loan - and that it had been granted to Baloyi to pursue private business interests - there were worrying allegations that this loan was in the process of being written off.

A long road ahead

Given the scale of the financial irregularities at Fidentia, it is rather surprising that only two arrests have been made. Perhaps more information will be revealed as the court action proceeds.

There is little doubt that the Fidentia case is a complicated one. It took more than a year for the Financial Services Board to investigate the company and apply to the Cape High Court to place it in the hands of curators. 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.

In the interim, it seems the court appointed curators will rule Fidentia with a proverbial 'iron fist'. Their initial actions have already caused waves - with many of the staff who were dismissed to cut costs already petitioning the CCMA over wrongful dismissal.

Editor's thoughts:
The wheels of justice turn slowly in Western democracies. Do you think there is a call for more cases to be heard in specially established courts to speed up the justice process and dissuade others from similar wrongdoings? Send your thoughts to [email protected].