Fidentia,+our+worst+nightmare,+Alec+Hogg,+Moneyweb

Moneyweb, 08 February 2007
=Fidentia: It's our worst nightmare=

//Savings of almost 50 000 widows and orphans gone. Insiders “sickened” at what they’ve found.// **Alec Hogg** //reports//

The Fidentia cupboard is bare. Its mastermind, J Arthur Brown, splurged the savings of 47 000 widows and orphans on a Hollywood lifestyle of fancy cars and fast living for himself and his friends.

Early estimates put the cost of his insanity at over R500m.

The only hope for the now destitute beneficiaries of the plundered Living Hands trust is that corporate South Africa - and perhaps the authorities - step in to support the few decent Fidentia subsidiaries which remain.

After lengthy investigations, the Financial Services Board managed to get a court order last week, which allowed it to appoint curators to take over at Fidentia. They were greeted by the financial equivalent of what American troops found at German Death Camps.

Brown and his cronies have looted the Living Hands trust, previously worth R1,2bn, almost to the point of extinction. They have also involved some well known sporting personalities. Provincial cricketer Louis Koen enjoyed a R200 000 a month salary while former national cricketers Dave Callaghan and Meyrick Pringle are among the "employees". Ex national cricket coach Eric Simons was contracted to run the Fidentia Cricket Academy.

The source of the funds, Living Hands, is a trust run for around 50 000 widows and orphans whose departed husbands/parents - mostly blue collar mine workers - entrusted their final estates to it. Many of them had been relying on grants of around R200 a month as their major source of income.

While Brown was using the trust to draw his own R400 000 monthly pay, dispensing equally fancy salaries to his pals and providing free food in a restaurant-like canteen, orphans have been threatened with eviction for not being able to pay their school fees.

Insiders say they are "sick to the gut" at what is coming to light. Fidentia's monthly salary bill alone was in the tens of millions for hundreds of head office staff while up-market offices and only the very best furniture and other baubles added millions more to the costs.

Brown's spendthrift manner made him a legend in his native Cape Town.

Even on the Highveld, suspicions were raised by his company's ability to massively out-bid rivals when purchasing assets - some good, like independently-managed unit trust administrator AOS and IT firm Software Futures, but mostly bad. But until now nobody fully appreciated how Fidentia was funding its buying spree.

Now that the curators have been installed, the whole pack of cards is crashing down.

Soon after securing the asset management contract for the Transport Sita, Brown acquired a Ferrari. Also, in Dave King-style, Brown bought an expensive home in the Cape's plush Sunset Beach - and then razed it to the ground so that he could rebuild something of palatial proportions.

His obsession with sporting fame stretched beyond the employment of Koen, Pringle and Callaghan through to headline sponsorship of the Boland provincial rugby team and the Eastern Province Warriors cricket team. Fidentia also recently bought the Manning Rangers soccer team.

Now that the cupboard has been shown to be bare, the future of those franchises must be in question. That might worry sports fans. But those concerns are nothing compared with the social impact that faces beneficiaries of the pillaged Living Hands trust and other funds entrusted to Fidentia.


 * From: http://www.moneyweb.co.za/mw/view/mw/en/page1655?oid=67928&sn=Detail**

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