FANews
FANews
RELATED CATEGORIES
SUB CATEGORIES Featured Story |  Straight Talk |  The Stage | 

Curators move in on Fidentia

03 February 2007 Gareth Stokes

The Cape Town High Court has ordered that Fidentia Holdings and two of its subsidiaries be placed under immediate curatorship. The court order, issued on 1 February 2007, affects the businesses of Fidentia Asset Management (Pty) Limited, Bramber Alternati

The court ruling is the result of an application brought by the Executive Officer of the Financial Services Board (FSB). Prior to their application, an FSB team conducted preliminary investigations into the manner in which Fidentia was conducting its businesses. Their findings made reference to "misrepresentation to clients", "misappropriation of client funds" and "inadequate corporate governance" amongst others.

The report alleges that the nature of the assets held by (Fidentia Asset Management) on behalf of clients had been artificially disguised to misrepresent the nature of the investments held on behalf of clients."

R406 million 'unaccounted' for

The FSB concludes that as much as R406 million of the R1.6 billion of assets under management cannot be accounted for. Instead of using these funds for investment purposes, Fidentia may have used them for funding its own business activities and buying other companies.

Of the total managed funds, R1.47 billion is from the Living Hands Umbrella Trust - a fund invested with Fidentia on behalf of the Mineworker's Provident Fund. Another R245 million was invested by Teta, the education and training authority for the transport sector.

Further investigation will be required before the extent of any financial losses can be determined.

Where to from here

This case has the potential to become the most damaging financial and investment scandal since the Masterbond collapse in 1992.

The court has instructed the curators to report back on March 27 "on any irregularities committed by either of the firms, their directors, key individuals, or management".

In the interim, the curators have control of the company and are instructed to act in the best interest of investors.

Quick Polls

QUESTION

How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?

ANSWER

Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now