Friday, January 28, 2011

Where did the R190 million go ?

Where did the R190 million go?
January 27 2011 at 02:48pm


Colin Cowan

Preliminary inquiries indicate that self-confessed fraudster, attorney Colin Cowan, had very few assets - a car, R60 000 in a bank account and insurance policies worth a few million.

This raises questions about what happened to the estimated R190 million he took from investors.

One investor has approached the court, seeking to have a curator appointed to delve into Cowan’s financial affairs to establish exactly what assets he had and to have his estate sequestrated.

Cowan, an executive consultant with Garlicke and Bousfield, committed suicide at the end of November 2010, admitting in a suicide note that he had committed fraud.

In Wednesday’s application before the Pietermaritzburg High Court, Harry Spain of Topspec Investments, with the support of Roy Ekstein of Roy Ekstein Investments CC, said the matter was urgent because nothing had been done about Cowan’s estate.

However, Deputy Judge President Chiman Patel declined to appoint a curator, ordering that the Master appoint an executor of the estate and report back to the court on progress within 15 days.

It emerged in documents before the court that Cowan left all his money to his wife, Norma, whom he named as executor, along with a Durban accountant, who has renounced his appointment.

Spain speculated that nobody would want the job because of the allegations of fraud and because there were so few assets.

He said the will - which dids not detail any assets - had not yet been formally lodged with the Master.

“It is clear that the estate is insolvent and will not be able to pay what is just due to me. Claims could run into hundreds of millions of rands.”

Spain said Topspec and Roy Ekstein collectively deposited R41.6 million into Garlicke and Bousfield’s trust account on the advice of Cowan.

Topspec is owed more than R30 million, which excludes deposits he made into accounts of other businesses on Cowan’s instructions.

Over the years, both Topspec and Roy Ekstein Investments made many deposits and each time they were given undertakings on the firm’s letterheads signed by Cowan and two directors.

After Cowan’s suicide, Spain’s attorney, Andries Geyser, wrote to the firm demanding that it give an undertaking that it would repay the money, but this was not forthcoming.

Spain said possible claims against the firm and others would be dealt with separately.

But, he argued, it was “vitally important to sequestrate the estate so that his affairs can be investigated and so that people, who may be implicated in his unlawful conduct and who could be liable to compensate investors, can be interrogated”.

The papers were served on Norma Cowan earlier this week but she did not come to court to either oppose or consent to the application.

Spain’s application is the third in what is expected to be many court applications as people attempt to recover their money, either from the law firm itself, from companies and close corporations into which Cowan apparently transferred their money and from Cowan’s estate.

Already before the court is an application by Westville freelance journalist Marjorie Copeland for the winding up of Rodlane Trading, a company owned by Cowan and his brother, Martin, in an attempt to recover just less than R1 million which she invested through Cowan and which went into that account.

KPMG, which is conducting an forensic audit into the “Cowan transactions”, has reported that R70 million went through this account in five years.

However, only about R180 000 remains of that money.

Director Camilla Singh has already reported that Cowan was running a pyramid scheme. - The Mercury

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