When the law enforcer becomes the accused

Moneyweb’s special investigations journalist Julius Cobbett won the companies and markets section for his excellent contributions on Sharemax and Picvest, he was also a finalist for the Sanlam Journalist of the Year award, which was won by Vic de Klerk for work he did on Sharemax.








FSB chief Dube Tshidi: When the law enforcer becomes the accused
He loves the job and has just been reappointed for a second term, but being South Africa's chief financial services regulator is acutely frustrating, says Dube Tshidi, executive officer of the Financial Services Board.

FRUSTRATED: Dube Tshidi It is easy to see why he feels this way. Almost five years ago the Financial Services Board (FSB) fingered Fidentia CEO J Arthur Brown for allegedly misappropriating millions of rands belonging to a mineworkers' pension fund.

Investigations led to criminal charges being laid and the curators being sent in to recover what money they could for the beneficiaries.

The case still has not come to court. Instead Brown has taken the curators to court, accused the FSB of bullying him, threatened to lay charges against it for criminal defamation and approached the court to have the charges against him thrown out because media speculation has impaired his right to a fair trial.

The courts have rejected his attempts but now, with stupefying chutzpah as far as Tshidi is concerned, Brown is hitting the talk circuit (tickets at R175) and plugging a "tell-all" book he is about to publish which will prove it is the FSB which is the real culprit and he the real victim in all this.

Tshidi, 57, says the ease with which alleged white collar criminals are apparently able to turn the tables on their accusers and endlessly delay court proceedings against them is damaging public confidence in the regulator.

"You have the responsibility to protect the integrity of regulators, and you will only achieve that by taking effective action against wrongdoers."

What is his response to Brown's allegations of criminal defamation against the FSB?

"If you look at everything printed in the media or heard on radio talk shows you will not pick up a word of this coming from the FSB."

The FSB has confined itself to investigating the case and handing its report to the enforcement agencies of government, he says.

"We never went to the media and said Arthur Brown has stolen from the widows and orphans. What we have said is that assets belonging to widows and orphans of a particular pension fund were misappropriated."

When does he think the case will be heard in court?

"I can't tell you. There are so many sideshows around all these big cases. Just when you think you're going to court to deal with the merits of a specific case something else crops up, another sideshow. We don't know at this stage when the proper case is going to be heard."

He finds it "terribly frustrating", he says, and would like to see a new system that makes it easier for regulators to bring alleged offenders to book.

"I would prefer a judicial system or an enforcement system which says if there are allegations against an entity or individual in the financial services sector there should be a special court that can deal with that matter there and then. No sideshows. Let's get to the real case and deal with it.

"It depends on government and the judiciary whether they would entertain such a request [for a special court], but the request has been made."

There is already a specialised commercial crime court which was established more than 10 years ago precisely to speed up the investigation and prosecution of financial services fraud, but Tshidi does not think it is doing the job.

The ongoing Arthur Brown saga has highlighted the weakness of the current system.

"After all these years we haven't even started dealing with the case. We need to have a fresh look at this commercial crime court and ask, 'is it serving the original purpose it was created for?' We have to revisit it."

So must the legal rights of the accused be put on hold so that the nitty gritty of the case against them can proceed?

"Their legal rights and constitutional rights must be respected, but within the main case, not around the main case. All the rights of the individuals we're pointing fingers at must be respected, but the case must start"

What everybody would like to know is where Brown is getting the substantial amounts of money needed to pay for the court actions he has initiated to delay the only case that, as far as Tshidi is concerned, really matters.

The same question can be asked of others who seemingly have all the money in the world to pay top legal teams to delay their day in court. It's an issue that Tshidi finds particularly galling.

"You go and fight for your rights and justice using contentious profits. How correct is that?"

Is this not where the Asset Forfeiture Unit comes in?

"Yes, but have the assets been forfeited? They're still there and they're being used to defend the actions taken," he says.

Because of delays in the justice system, the regulator becomes the accused, he says.

"The law enforcers are now the accused. We have people who have committed crimes, pointing fingers at the law enforcers and saying to them, 'You're the ones who are out of order'."

In spite of his obvious frustrations, there have been deeply satisfying successes.

None more so than ensuring the distribution to members of surplus pension fund money.

Last year, Tshidi said companies were sitting on more than R60-billion of surplus pension fund money. There was a time when nobody would have been any the wiser and members of the funds would have had little hope of seeing any of it.

The dice were loaded against them, but that is changing.

"Only last week we approved a surplus fund distribution of R20-billion to former and current fund members."
And there will be more, promises Tshidi.

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Between dreams and reality
Issue #98, 1st December 2007



Louise Kennedy nails Sharemax for selling her a property investment under false pretences

Louise Kennedy of Bloemfontein invested in Oxford Gate Holdings – a Sharemax controlled property syndicate – in November 2005.

By early this year she was decidedly unhappy with the performance of her shares, and raised her concerns with Sharemax, but was given the cold shoulder. After sitting back for a couple of weeks, she decided to do her own research.

(Noseweek)
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Sharemax: blue sky investment or good old pyramid scheme?
Issue #99, 1st January 2008


Some property sundication arrangements are as stable as desert sand

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Exposing a murky world
Issue #108, 1st October 2008


Deon Basson's book is subject to a court application to suppress various chapters.

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Moneyweb’s journalists scoop up the honours

Acknowledged in every single category they entered.

JOHANNESBURG - At a function held last night at The Wanderers Club Moneyweb was recognised and honoured for its contribution to financial journalism.

All of our journalists who entered the awards were either finalists in their category or won their category, no easy task considering that they were competing with 70 journalists representing 25 different publications.

Moneyweb’s special investigations journalist Julius Cobbett won the companies and markets section for his excellent contributions on Sharemax and Picvest, he was also a finalist for the Sanlam Journalist of the Year award, which was won by Vic de Klerk for work he did on Sharemax.

As Moneyweb’s columnist Warren Ingram recently said: The financial media must also shoulder some of the blame for the collapse of property syndications, such as Sharemax. “There were some fearless journalists like Deon Basson who were unflinching in their criticism of this industry. Basson was hounded by Sharemax who targeted him through legal action in his personal capacity. Unfortunately, Basson was not supported by the financial publications in which his reports were published. He died while the legal proceedings were still ongoing and Sharemax eventually bought the rights to the book he had written about them. The public has a right to read this book and the new bosses of Sharemax have a moral obligation to publish it. There were some other journos who took up the cause and Moneyweb’s own Julius Cobbett was at the forefront but there were not many who took up the fight.

Lindo Xulu who is also part of Moneyweb’s special investigations team won the best new comer of the year award for his contributions on Kumba/ICT/AMSA, Mandla Lamba, Mbekigate, Kalahari Resources: The story behind the ‘hijacking' and Christo Wiese. The best newcomer award is presented for the best first entry by a participant with fewer than three years’ experience. Lindo joined Moneyweb last year April and was a product of Sanlam’s 2010 financial school in journalism.

Both Barry Sergeant and Steven Jones were finalists in the categories they entered in.

The Sanlam Awards for Excellence in Financial Journalism says Sanlam “is an initiative that honours the indispensable role of the financial journalist in modern business. It was launched in 1974 and rewards the high standards required by financial journalism.

“The winner of each category receives a prize of R20 000 while the overall winner receives an additional R30 000, and the best newcomer merit award amounts to R15 000. The best newcomer will be presented for the best first entry by a participant with fewer than three years’ experience. The adjudicators may recommend additional prizes based on merit”.

Sanlam release

Veteran journalist, Vic de Klerk of Finweek has been named the Financial Journalist of the Year for 2010 at the annual Sanlam Awards for Excellence in Financial Journalism. De Klerk has reclaimed the top spot 32 years after he was proclaimed the winner of the original competition, the Sanlam Financial Reporter of the Year in 1978.

The annual Sanlam Awards were introduced in 1974 to acknowledge the indispensable role of financial journalism in society and to promote the high standards required of financial journalists. This year, the competition attracted 109 entries (one short of the previous year’s tally) from 70 journalists representing 25 different publications, online news services and radio and television stations.

Lulu Letlape head of group corporate affairs of Sanlam says: “Apart from taking the overall prize, De Klerk also won the section Markets and Companies: magazines and weekly newspapers with his investigations, research and findings on the Sharemax saga. He was also a finalist in two sections from the 2010 competition.”

Sanlam also bestowed an honorary award for lifelong service to journalism veteran, Bert Ferreira of Sake24. As a public relations practitioner in 1974, he assisted in developing the framework for the Sanlam Financial Journalism Awards. His career in journalism started in 1951 and now, 60 years later, Ferreira writes a regular column on the world economy for Sake24.

When presenting the award for lifelong service, Sanlam Limited chairman, Desmond Smith said, “In the 37 years of the competition, Sanlam has, on recommendation of the adjudicators, twice presented special awards for lifelong or special contributions to financial journalism. The first honorary award was made to the late Harold Fridjohn, of the Rand Daily Mail. The second was made to Martin Weltz, editor of Noseweek. I am pleased to make only the third such special award tonight and that is to Bert Ferreira – a veteran journalist in the South African media landscape. The lifelong service award recognises exceptional dedication and achievement in financial journalism.”

Following the presentation to Ferreira, the prize-winners for the different sections of the competition were announced:

o Jan de Lange, Sake24, a second successive prize in the section Economy and Industry: dailies and online;

o Rob Rose (last year’s winner) and Stephan Hofstatter from Business Times/ The Times in the section Economy and Industry, magazines and weekly newspapers

o Julius Cobbett from Realestateweb in the Moneyweb group, in the section Markets and Companies: dailies and online;

o Bruce Cameron of Personal Finance in the section Personal Finance: Financial media (This is his unequalled 11th award in this section alone);

o Pieter van Zyl from Huisgenoot/ YOU, in the section Personal Finance: Non-financial media;

o Sue Beukes and Chris Bishop, both from CNBC Africa, in the Audiovisual section;

o Claire Bisseker of Financial Mail, in the special section on the economic implications and effect of the 2010 FIFA World Cup; and

o Lindokuhle Xulu from Moneyweb for the best entry from an entrant with less than three year’s experience.

The adjudicators for the awards were:

o Prof. Anton Harber (former journalist/ editor and currently director: Wits School of Journalism and Media Studies),

o Maud Motanyane, chairperson of Kagiso Media and former editor,

o Ulrich Joubert (economist at Kruger International),

o Reg Rumney (former financial journalist/ editor and currently director of the Centre for Economic Journalism in Africa at Rhodes University),

o Conrad Sidego (former journalist, public relations practitioner and diplomat, and currently director of companies),

o Caroline Southey (former journalist/ financial editor and currently director: Informal Markets at Standard Bank),

o Hein Swart (former business editor and parliamentary representative of Die Burger in Cape Town),

o Peter Vundla (deputy executive chairperson: AMB Holdings).