JOHANNESBURG- Herman Pretorius’s unregulated Relative Value Arbitrage Fund (RVAF) has turned out to be much larger than originally thought. The fund’s curator, Lambertus von Wielligh Bester, says that records suggest that about R2.2bn was received from the public. And updated quarterly statements show that the fund owes its investors about R3.1bn.
The difference of R900m between the amounts received and owed is most likely explained by the fund’s performance. It is suspected that this performance was fictitious.
In the original court application for the RVAF’s sequestration, trustee Eduard Brand estimated that the fund owed its 3 000 investors R1.8bn.
Von Wielligh Bester revealed the latest estimates in a sequestration application for an entity called the Seca Trust. The Seca Trust is a trust that was controlled by Pretorius. It is believed to have received R99.8m from the RVAF during the past five years.
If the RVAF paid R100m to the Seca Trust, it raises the question: What happened to the other R2.1bn? A fair portion will have gone to the generous commissions paid to brokers who sold the scheme. But even if these brokers earned 10%, or R220m, that still leaves R1.88bn that needs to traced by the RVAF’s curators.
Von Wielligh Bester, and his co-curators of the RVAF, Rynette Pieters and Barend Petersen, applied for the Seca Trust’s sequestration last week. The Seca Trust had three trustees: Herman Pretorius, his widow, Susan Ann Pretorius, and Eduard Brand. After Pretorius’s death, Jan Andries Rautenbach of Rautenbach and Van Niekerk Auditors was appointed trustee.
The curators’ sequestration application revealed that the Seca Trust had only R119 000 in its bank account on August 7 2012, and is the registered owner of a Range Rover. Brand is not aware of any other assets belonging to the Seca Trust, says Von Wielligh Bester.
“According to Brand’s best knowledge and belief, the Seca Trust is unable to recover the amount owing to the RVAF Trust, and its liabilities exceed its assets by a wide margin,” wrote Von Wielligh Bester in the sequestration application.
Von Wielligh Bester asked chartered accountants De Jager Boshoff to investigate the RVAF Trust’s bank statements from January 1 2010 to August 10 2012. These investigations revealed that a total of R64.9m flowed from the RVAF Trust to the Seca trust during the period. Von Wielligh Bester said the urgency of the matter did not allow for a thorough investigation of the period before January 1 2010. However, a review of the Seca Trust’s bank statements suggests that it received a further R34.9m from the RVAF from September 19 2007 to December 31 2009. Thus the total amount received was R99.8m over the past five years.
So what happened to this money? According to Von Wielligh Bester, investigations show that the Seca trust paid the salaries of its employees. These included: Tharine Swart, Eduard Brand, Siegmund Thetard, ML Sampson, Frans Badenhorst, PP Swanepoel, M Goodman, E Khan, Claude Delport and S Hendricks.
Investigations also showed “that there were near-monthly payments of several hundreds of thousands of rand to ‘H Pretorius’”. Says Von Wielligh Bester: “Although it is not confirmed by the auditors, the only logical conclusion is that these fees were paid to Mr Herman Dempers Pretorius personally, alternatively for his advantage”.
Payments were also made to an entity reflected in the bank statements as Slip Knot Investments 174 (Pty) Ltd. “I can confirm that this company is the owner of the building where the Abante Group, which includes the Seca Trust, operates,” says Von Wielligh Bester. Abante is a name associated with Herman Pretorius. The curators refer to his various schemes as forming part of the Abante Group.
Several millions of rand were paid to an entity reflected on the bank statements as Monomer. Von Wielligh Bester says that the auditors are in the process of determining exactly who this beneficiary is and what it was paid for.
At the time of writing RVAF curator Rynette Pieters had not responded to requests for comment.
On Saturday IOL reported that Judge Siraj Desai placed both the Abante and Seca trusts under provisional sequestration early last week. IOL reported that investors pumped as much as R50m into the Abante Trust, of which Pretorius was also a trustee.