A devastating High Court application by the Financial Services Board (FSB) has exposed the "misappropriation" of hundreds of millions of clients' money by Cape-based asset management company Fidentia.
This may prove to be one of the most damaging investment scandals since the failure of Masterbond in 1992, given that Fidentia was looking after R1,6 billion of client's money, Business Day reported on Friday.
Of these funds, R1,47 billion came from the Living Hands Umbrella Trust, which pays out money invested with Fidentia by the Mineworkers' Provident Fund to orphans and widows of people killed in mining accidents. Another R245 million came from Teta, the education and training authority for the transport sector.
The application follows a probe of Fidentia by a team mandated by the FSB, and it paints a bleak picture of the way the company carried out business.
At the last count, the FSB probe concluded that R406 million is the figure of "client funds unaccounted for", which suggests that the Living Hands Trust and the transport Seta may yet lose hundreds of millions of rands.
While it is not yet possible to say how much is missing, the inspectors said: "It is now evident that a lengthy disposal process (of Fidentia's assets) will be required... and the value that will be realised remains uncertain."
At the FSB's request, the Cape High Court placed Fidentia Holdings and its two subsidiaries, Fidentia Asset Management and Bramber, under curatorship. - Sapa