Investors hit by R1.8bn scam
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File photo: The scandal centres on the financial dealings of Herman Pretorius (pictured) who shot dead his former business partner Julius Williams, then turned the gun on himself.
Cape Town - A new R1.8 billion financial scandal, to rival the Fidentia scam of 2007 and the collapse of Masterbond in 1992, has been blown wide open following the shooting of two businessmen who died in a Foreshore office block last Thursday.
The scandal centres on the financial dealings of Herman Pretorius, who shot dead his former business partner Julius Williams, then turned the gun on himself. The details began emerging when attorney and investor Morné Strydom went to the Western Cape High Court this week to have Pretorius’s Relative Value Arbitrage Fund (RVAF) sequestered – after discovering the fund’s bank accounts were empty when he and others tried to withdraw their investments, valued at about R200 million.
A provisional sequestration order was granted on Wednesday, with an order that a curator be appointed within 48 hours.
In his papers, Strydom says he and several other investors wanted to withdraw their funds in the wake of negative media reports about the fund, and Pretorius’s subsequent death.
But following an emergency meeting with the fund’s only other trustee Eduard Brand after Pretorius’s death, they learnt there was no money in the fund, and no possibility of any future income.
According to an affidavit by Brand, about 3 000 investors, owed about R1.8bn, had invested in Pretorius’s trust, which was managed by his company Abante.
Brand says he has no knowledge where the funds were invested.
Pretorius is listed on Cipro (the Companies and Intellectual Property Registration Office) as a director or former director of more than 100 companies.
Pretorius shot Williams and himself in the Icon building on the Foreshore on July 26, following a spat over funding of a company called SA SuperAlloys, in which Pretorius had sold priority shares to investors.
It has since emerged that many of Pretorius’s investors were farmers and residents of small Western Cape towns like Porterville and Malmesbury. However, there were also investors from northern areas such as Bloemfontein.
An RVAF client list, attached to court papers and dated 2004, shows around 500 clients with balances ranging from R41 000 to more than R2m, totalling R77m. Other than farmers, the investors include family trusts and several members from the same families.
Pretorius is the biggest investor, with more than R2.4m, but because the list is dated 2004, it is unclear whether he had withdrawn his funds.
Brand says in the affidavit that his work was only administrative, and that he had no knowledge of what Pretorius was doing.
Pretorius would give him the figures for the interest to be paid, which he would then enter into investors’ quarterly statements. Investors were paid 14 to 25 percent interest on their investments.
Brand did not return calls and messages left for him by Weekend Argus this week.
RVAF has been trading since 2004, but Brand appears to have worked alongside Pretorius as trustees of the Trudeaux and the Seca Trusts since at least 2002.
The RVAF trustee agreement, which Brand signed in 2004, and presented in court papers, raises a number of questions. It states that there should be three trustees at all times, although it is apparent that only he and Pretorius ever served.
The matter will be back in court again on September 3.
Meanwhile, Die Burger reported that at Pretorius’s funeral held in Welgemoed this week, his pastor said Pretorius had come to see him about a vision he had, in which he hurt a number of people. - Weekend Argus
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