Moneyweb.gif

Moneyweb, radio broadcast transcript, 08 February 2007 23:02



Intro



MONEYWEB: Hello, good evening, welcome to the Moneyweb Power Hour. I'm Alec Hogg, your host here this evening. We've got plenty of power on tonight.

The story of the moment - well, you wouldn't believe it if you had a look at some of the media reports. The scribblers haven't picked up on this one yet, but I can tell you that the Fidentia scandal is the biggest financial scandal to hit South Africa ever. A fellow called J Arthur Brown and his cronies have stolen upwards of R500m, literally, from widows and orphans. It's a business called Fidentia. They've pulled in some very well-known sporting personalities, one of whom, an ex-provincial cricketer, was earning R200 000 a month just for showing his face around there. We're getting into that story and lots more in the next hour.

But first up, let's find out from our production editor, Hilton Tarrant, what's in The Citizen newspaper tomorrow.

HILTON TARRANT: Alec, in tomorrow's Moneyweb Business inside The Citizen, our quarterly unit trust review - which funds are hot and which have shot the lights out during 2006; fund managers say we'll take the money for Edcon, but the price is not that generous; some exclusive news and insights in our Wall Street Journal section; and online at moneyweb.co.za right now, full coverage of the beleaguered financial services group, Fidentia. Alec Hogg reports that insiders are sickened at what they've found, and a former South African cricket coach is drawn in by Arthur Brown's Fidentia fantasies.

MONEYWEB: David, have you been following any of the Fidentia stories?

DAVID SHAPIRO: No, I haven't seen your story today. But that R500m - is that bad investments, or did they spend it? On Ferraris ...

MONEYWEB: He had a salary bill somewhere over R20m a month, he bought a Ferrari...

DAVID SHAPIRO: So it's not bad investments, it's actually spending?

MONEYWEB: No, he spent the money. Remember what Dave King did when he bought a place in Plettenberg Bay - one of the most beautiful places in Plettenberg Bay? He levelled it to the ground and then re-built a house. This J Arthur Brown, who's all of 32 years old, did the same thing in Cape Town. And you know, the crazy thing is we were tipped off on this story 18 months ago by the man sitting over there, Derek Sumption. We're going to talk to him about it a little bit later. But, David, it is a very scary story - that this kind of thing can happen.

DAVID SHAPIRO: Is it going to result in losses?

MONEYWEB: Massive.

DAVID SHAPIRO: Significant losses?

MONEYWEB: There are 47 000 widows and orphans. Let me just tell you the calibre of this fellow. There's a trust called the Living Hands Trust. The Living Hands Trust has got 47 000 beneficiaries, who are the dependents of deceased blue-collar miners. OK? So this is not big money - R200 a month grants, for instance, to children. And they aren't going to get them any more because J Arthur Brown and his cronies have spent it. They had hundreds of people working in their head office doing - what? What was the business model? Nobody seemed to ask, no-one seemed to ...

DAVID SHAPIRO: But why? How come no-one finds this? Number one, where are the auditors, where are the lawyers, where's the accountability?

MONEYWEB: We'll get on to that. There's a lot to talk about that later, but it is a very, very scary story. If you want to go and get all the information, go onto /, and you can get the background. We will be talking to Derek in just a moment, and then to our Jackie Cameron and Barry Sergeant, who've been doing lots of digging on this one over the last 18 months.

From: http://www.moneyweb.co.za/mw/view/mw/en/page55?oid=68527&sn=Detail

641 words