Author: Julius Cobbett
Publications: The Citizen
Date Publiched: 4 November 2013
Brokers who sold the investment products of the late Herman Pretorius were paid commission of “at least” R100m, the most recent letter from the curators of his failed investment scheme, the Relative Value Arbitrage Fund (RVAF), says.
It has been more than a year since Pretorius shot first his former business partner and then himself. The incident confirmed what some had already suspected: Pretorius had been running a massive Ponzi scheme. It has been estimated that the scheme took nearly R2.2bn from 3 000 investors.
The Financial Services Board (FSB) and the Financial Planning Institute (FPI) have launched investigations into brokers who peddled the scheme. But there has been no disciplinary action announced as yet.
Likewise the financial advice ombudsman Noluntu Bam has yet to issue a determination connected with a Herman Pretorius investment.
Earlier this year the RVAF identified Michal Calitz as one of the more prominent brokers. Calitz, who was a close friend of Herman Pretorius, received more than R15m from the scheme. Calitz is still a representative of Impact Financial Consultants CC, which is an FSB-authorised financial service provider and is listed as an FPI member.
The FPI says it is finalising charges against members in relation to the RVAF, but it will pronounce on the matter only once a December disciplinary hearing has been held.
The FPI’s Disciplinary Regulations require publication of the outcomes of disciplinary hearings, but after finalisation only, it says.
The FSB says its own investigation into the Pretorius matter is not finalised; the “FAIS supervision department is still in a process of engaging with the identified financial services providers and other interested parties”.
The RVAF’s curators are trying to trace investor money that was moved by Pretorius to the UK and Switzerland.