NPA’s Fidentia appeal is welcome, but other white-collar cases stall
Date Released: Wed, 31 July 2013 08:59 +0200
The National Prosecuting Authority (NPA) seems determined to obtain a tougher punishment for former Fidentia boss J Arthur Brown.
After the Western Cape High Court, which sentenced Brown to an effective R150,000 fine and suspended jail sentence, refused its application for leave to appeal, it approached the Supreme Court of Appeal directly. Last week, the appeal court ruled that it would indeed hear an appeal. The NPA will have to explain the dismal job it did of leading evidence in the high court, which earned it stern words from the judge.
Two weeks ago, the Financial Services Board disclosed a report that one of the liquidators, George Papadakis, had drawn up in anticipation of Brown’s prosecution.
The report details how Brown had run Fidentia as a pyramid scheme and a personal treasury, from which funds were blown on sports teams, hotels, racing cars and businesses that directly benefited Brown. It makes for outrageous reading.
There is just one problem: the high court never saw it, or heard from Mr Papadakis, because he was never called to testify. That i s going to take some explaining to the appeal court, and why the rather thin evidence it did lead provided grounds for a tougher sentence.
It is heartening that someone in the NPA feels strongly enough about it to go to the appeal court to press the case. If only such enthusiasm were shown for other serious white collar crime cases. Despite charges, and, in some cases, detailed forensic reports having been handed to police and prosecutors, nothing has been done on Blue Financial Services, Pinnacle Point, Alliance Mining, African Dawn, Sherbourne Capital, JCI and other less well-known cases. Other serious cases such as Tigon appear to have stalled.
While the NPA is pushing for a stronger sentence for Brown, it did not think to do the same when Wendy Machanik was fined R1.5m for defrauding clients of R27m — a pretty good profit margin, though Brown is currently sitting with an even better one, having blown around R600m of vulnerable savers’ money.
Long may this new-found backbone at the NPA last, but I suspect if serious backbone is going to become the order of the day, President Jacob Zuma will have to appoint a strong national prosecutor, a decision he has put off for 10 months and counting.
There must be a reconciliation of the dysfunctional relationship the NPA has with its one-time head of commercial crime prosecutions, Glynnis Breytenbach, whom it has being trying to fire for apparently being pig-headed enough to insist on prosecuting some of the president’s friends. Am I over the top in thinking that white collar criminals are getting a free ride, purely because of the president’s interests?
FIRSTRAND has again seen its African ambitions come unstuck, due to messy politics. The latest casualty is its effort to acquire Merchant Bank, a once-high-flying Ghanaian corporate bank that had got itself into a mess with big loans to politically connected individuals and politicians’ pet projects. The deal was squashed two weeks ago.
Much like FirstRand experienced in Zambia, the political winds turned against it after an election. In Zambia, the newly elected Michael Sata squashed its nearly completed acquisition of Finance Bank last year.
In Ghana, it is President John Mahama who has poured cold water on FirstRand’s ambitions. Talk in Accra is that the deal involved some tricky negotiations over large, nonperforming loans to entities tied to Mr Mahama’s millionaire businessman brother.
FirstRand wanted the nonperforming loans left behind on the balance sheet of the vendor, Ghana’s social security agency. Opposition politicians had already made a noise about how that would amount to using state agencies to bail out the brother.
In Nigeria, things seem better. FirstRand took advantage of a new licensing regime that allowed for specialised merchant banks to open a brand new operation there last year. Now the Nigerian central bank is getting ready to dispose of some of the banks it had to take over in 2010 during its banking crisis. FirstRand has already seriously considered at least two other banks in the country but walked away on both occasions, showing it insists on doing deals only on terms that work for it.
But it has proven less adept at managing the politics. Its patience must be wearing thin.
Article Source: Business Day