Suspended ANC Secretary-General Ace Magashule. (Photo: Gallo Images / Frikkie Kapp) | Former president Jacob Zuma. (Photo: Leila Dougan) | Former special ops boss Thulani ‘Silence' Dlomo. (Photo: www.min-on.org)
Thursday, July 15, 2021
Wednesday, May 12, 2021
AGE OF ACCOUNTABILITY Judicial Conduct Committee to probe Zuma-era arms deal commission whitewash by judges By Marianne Thamm• 12 May 2021
In the aftermath of a North Gauteng High Court finding, judges Willie Seriti and Hendrick Musi will now have to explain why the Arms Procurement Commission overlooked crucial information prior to making findings in 2016 that the arms deal was clean as a whistle.
Every year, police in South Africa kill hundreds of people and are accused of brutalising thousands more. A new investigation by Viewfinder has revealed that the killings and brutality are enabled by police management’s reluctance to discipline officers accused of wrongdoing in these cases. This is true even when watchdog investigations conclude that these officers should be disciplined. Given free rein to reoffend, problem officers may become emboldened. For their victims, the consequences can be dire.
Monday, February 15, 2021
Surprising twist in former Sharemax auditors’ disciplinary hearing Legal team is to bring an application for the recusal of members of Irba’s disciplinary committee. By Roy Cokayne 15 Feb 2021 00:01 The Independent Regulatory Board for Auditors (Irba) disciplinary hearing against the former auditors of the failed Sharemax property syndication scheme has taken a surprising twist. Advocate Mike Maritz, appearing for the three auditors, indicated on Friday that he will be filing an application for the recusal of one or more of the members of the disciplinary committee on the grounds of an actual bias relevant to these proceedings or a perceived bias. This led to the adjournment of the hearing until Monday for the submission of this application. The former auditors – Jacques Andre van der Merwe, Danie Dreyer and Petrus Johannes Jacobus Bekker – are facing 340, 40 and 33 charges respectively. They were all directors of ACT Audit Solutions Incorporated at the time they allegedly committed the offences while Van der Merwe was also the managing partner of the firm. All three previously pleaded not guilty to all the charges against them. Read: Three former Sharemax auditors, 413 improper conduct charges Sharemax was not a Ponzi or pyramid scheme – attorney The planned filing of the recusal application follows Maritz last week expressing concern about some of the questions and statements that had emanated from the committee members, particularly Sorenzo Sooklal. Maritz said they are under the impression that these proceedings are to be conducted neutrally, fairly and that the committee members will have an open mind, be independent and reserve their judgment until after conclusion of all the evidence and after hearing all the arguments. ‘Bias’ However, Maritz said it seemed to them that they are labouring under a misapprehension as far as this is concerned because Sooklal had made pronouncements which are clearly indicative of wholehearted support of certain opinions expressed by Brian Smith, the expert witness for Irba in the hearing. Maritz earlier in the hearing also questioned Smith’s independence after it emerged that Smith was chair of Irba’s investigation committee from 2004 until 2016 and chairman of this committee from 2011 until 2016. Read: Independence of Irba’s expert witness at Sharemax hearing questioned Smith further admitted that during the time he was chair, this committee concluded the investigations into the conduct of the three audit practitioners, reached an opinion on their conduct and passed this on to Irba’s disciplinary advisory committee with a recommendation. “It seems to me on any objective view of your involvement there, that you are … a cog in the Irba machinery. You are disqualified as an expert because of your obvious lack of objectivity,” Maritz said. In regard to Sooklal, Maritz questioned if the defence team is to be confronted with a situation where mid-stream and long before the conclusion of the evidence, there is a committee member indicating acceptance of a particular witness’s evidence and rejection of any other witness’s opinion in conflict with it. “How can that be? Then the proceedings would become farcical. And it would amount to this ‘going through the motions’ in the form of window dressing. “It would mean that the result is a forgone conclusion and I am wasting my time here,” he said. “This is not how court proceedings or disciplinary proceedings and particular proceedings as important as the present are to be conducted.” Maritz said Sooklal was dismissive of many of the expert opinions expressed by Professor Harvey Wainer, a visiting Professor at the Faculty of Commerce at the University of Witwatersrand. Wainer was appearing as an expert witness for the three auditors. “It is most certainly at this stage our view that Mr Sooklal has disqualified himself completely from further participation in these proceedings,” Maritz said. ‘Full disclosure’ wanted Maritz said on Friday it had now become of vital importance to demand full disclosure by each member of the disciplinary committee of any or all interactions or contact with Smith, at any stage historically, preceding, leading up to or during these proceedings and full disclosure of any committee or committees any of the present committee members in these proceedings ever sat on with Smith. In response, disciplinary committee member Horton Griffiths confirmed that between 2007 and 1995 he was a member of the Irba investigating committee, initially as a member but subsequently as chair, and that Smith succeeded him as chair of this committee. ---------------------------------------------------------------------------------------- Sharemax chronicles continue: ‘Old people die, the fat cats laugh! Phillip De Wet 2 Dec 2016 Empty promises: Glynnis Morris has not seen any return from her investment. Every few months 70-year-old Glynnis Morris receives a letter from Frontier Asset Management. In broad strokes the letter tells her how well everything is going with Frontier’s sibling company, Nova Property, into which her entire R300 000 pension was forcibly invested. She no longer reads the letters. She goes straight back to figuring out how to get by on her R1 500-a-month government old-age grant. “It’s always the same letter, only the dates change,” she says. She has not seen a single cent from her investment for many years now, Morris says, no hint of the R3 125 monthly income — plus maybe some capital growth if the property market did well — she thought she was buying when she invested in the ill-fated Sharemax property syndication scheme in 2009. Instead she has seen many promises from the directors of Nova, which stepped in as the rescuers when Sharemax collapsed and took over Sharemax’s assets. In return for delivering that service to Morris and others, the directors of Nova each paid themselves an average of R4.9‑million in the past financial year. Morris has it better than most. She lives in a granny flat attached to the home of one of her daughters, and her two other daughters help her out with food “when I run out, which is often”. When the Mail & Guardian this week traced two other former Sharemax and now Nova investors, we found that one had died in March and the other had recently slipped into a coma. “This is what happens all the time,” said a relative of the latter. “These old people had their money taken. Now they don’t eat properly, then they get ill and they die, while the fat cats are laughing all the way.” The Nova directors — Dominique Haese, Rudi Badenhorst, Dirk Koekemoer and Connie Myburgh — deny they are anything other than businesspeople who work hard to manage the assets in which Sharemax participants had invested. But the difference between their rewards and those of the original investors is stark. This week, specialist financial website Moneyweb calculated that the four Nova directors’ combined R15.1‑million cash salaries in the past financial year were more than double the average earned by executives at most property management companies. Those cash salaries, Moneyweb said, represented 17% of Nova’s total cash receipts for the financial year. The four directors have near total control over how the company spends its money. After a legal battle stretching over several years to obtain the technically public register of Nova shareholders, Moneyweb last week revealed that the directors own 87.1% of the company, and have even greater voting rights thanks to a structure that reduces debenture holders to recipients of money and information as and when the four directors see fit. The directors value their shareholding, which in effect they received for free, at more than R1‑billion. Nova chief executive Haese played a pivotal role at Sharemax before it collapsed, and fellow director Koekemoer was also a director of Sharemax for several years. It is clear that directors pay themselves first from the company’s proceeds before any payments to the debenture holders they are responsible for, Moneyweb said. As a result, averaged over the past two financial years, Nova directors paid themselves out R3.6‑million each a year. The 31 000 debenture holders whose money they manage were paid an average of just less than R400 each. Average payments to debenture holders are a poor metric, because often the Nova directors do not see fit to provide. In the last communication Morris received, Nova was self-congratulatory about a 2013 decision “to reduce and/or cease projected monthly return payments” to debenture holders in favour of using the cash to refurbish shopping centres. Morris did not get any real say in the decision to pay her no interest, just as she was never really consulted when Sharemax morphed into Nova, or even on how her pension would be invested in the first place. In fact, she did not understand the mechanism of the investment. But then, nor did her investment adviser. Morris thought she was putting her money into The Villa, a large shopping centre to be built east of Pretoria. That sort of bricks-and-mortar investment suited her risk appetite — extremely low — as it did many pensioners, which seems to be the main reason Sharemax drew so many of their ilk. What her savings were actually buying, later perusal of a prospectus would reveal, was “an unsecured subordinated interest rate acknowledgment of debt linked to a share”. In the rush to get her money invested, that went over Morris’s head. Her investment adviser had been “hounding” her about when she would receive her pension lump sum, she recalls. The very morning it landed in her bank account he accompanied her to the bank, explained to the teller what she wanted, took the resulting cheque from the teller and had Morris sign some forms. Interrogation of the mechanism of the investment was limited. “I said to him: ‘Are you absolutely positive that I’m not being conned here?’ and he said: ‘No,’” she recounts of the 20-minute transaction. Investment advisers were notoriously keen on Sharemax, which paid very large upfront commissions: like the current Nova directors, advisers got paid regardless of whether the risk their clients were taking paid off. And some, like Morris’s adviser, had no understanding of that risk, the office of the ombud for financial services providers, known as the FAIS ombud, has consistently ruled. “It is apparent from [Morris’s advisor’s] version that he had no idea just what the investment was about and, as such, could not appreciate that the complainant was lending money to an entity, which entity would in turn lend the funds to a developer, leaving investors with no form of security whatsoever,” ombud Noluntu Bam ruled in Morris’s case this August. There was also the small detail that the shopping centre Morris was supposedly investing in had not yet been built and could therefore not generate rental income to pay her 12.5% interest — the promised payments could only come from the investments of other people. Although Sharemax has never been found by a court to have been one, that is the common structure of all Ponzi schemes. The FAIS ombud ordered Morris’s adviser to repay her investment in full, under rules that make advisers liable for losses incurred because of their negligence. For a short while it looked as if she would get back her savings. Then she was notified that her adviser had appealed against the ruling. That leaves only the chance that the four well-paid directors of Nova will see fit to direct some money her way. But she is not overly optimistic, and she is not alone. “The investors who complain to this office have received no credible information as to the steps that are being taken to repay their investment,” Bam wrote in May about another Sharemax-related complaint. “Most investors see incomplete and ghost buildings all around, with no suggestion that they will ever recover their money.” But in a June letter the Nova board told Morris that the various hurdles to cashing in on her partially built shopping centre were “constantly being addressed by the board” — just as it has been telling her since at least 2014. Nova did not answer detailed questions. Earlier this week, chief executive Haese told Moneyweb she would no longer provide information because it “will be twisted and used out of context for the purpose of further negative reporting”.