(Graphic: John McCann/M&G)
Global & Local Investment Advisors has broken its silence over its links to the estimated R2.7 billion BHI Trust ponzi scheme which collapsed recently resulting in scores, possibly even thousands, of local and international investors losing their life savings.
The financial intermediary’s directors issued a statement on Monday distancing the company — which allegedly advised people to invest in BHI — from the scandal, stating that its directors and staff also invested in the fund and that it had “no knowledge of” and was “not knowingly” a party to any alleged fraudulent conduct involving the trust.
The statement said the media had published “false”, “incorrect” and “unjustifiable reports” suggesting otherwise.
The BHI Trust unravelled when co-trustee Craig Warriner handed himself over to the police and told the Randburg magistrate’s court in mid-October that he wanted to plead guilty to a charge of fraud after he allegedly “irresponsibly” mismanaged the fund.
The statement issued by Global & Local’s attorney, Heetesh Patel, on behalf of the company’s board of directors — listed on its website as Mauro Forlin, Theolene Gelderbloem and Wade Wittstock — said they had become aware of, and were concerned about, “the startling revelations” regarding Warriner and the BHI Trust.
“As indicated to our clients by way of earlier communications, the allegations against Mr Craig Warriner and the BHI Trust concern us, not just because of the uncertainty it has created for our clients, but also for many of our team members and their families, who have also invested their own personal funds with the BHI Trust,” it read.
“Unfortunately, since the news regarding Mr Craig Warriner and the BHI Trust broke,
Global & Local Investment Advisors … its directors, management and staff have unfairly been made the subject of several inaccurate and carelessly reported media publications.”
Trust fund victim attorney Werner Cawood, who had invested R653 658 in the fund, moved swiftly to file an urgent application for the liquidation of the BHI Trust in the Johannesburg high court, which granted a provisional liquidation order.
The court appointed Gert Lourens Steyn de Wet and Sumaya Ali Mohamed joint provisional trustees. In their first circular to investors on 2 November they noted that they could only confirm R4 785 164.96 was held in a Nedbank account in the name of the trust as of 25 October 2023. The Directorate for Priority Crime Investigation (Hawks) and the Financial Sector Conduct Authority have confirmed they are investigating two cases of fraud regarding the trust.
Forensic investigator Bart Henderson, who has had 35 cases of victims referred to him, earlier told the Mail & Guardian that about 90% of the investors had been advised to invest in BHI Trust by Global & Local.
The company’s founder and senior investment advisor Michael Haldane was, according to Company Intellectual Property Commission records, previously a director of Rubicon Administration Services, to which the trust had outsourced its administration.
Two weeks ago, Investec told clients that it had terminated its agreement and “all relationships” with Global & Local, which had access to the bank’s Corporate Cash Manager online platform to manage customers’ funds.
Global & Local described the move as a “one-sided” decision over a “contractual dispute” and referred clients to Integrity Asset Management, which shares a common director with Rubicon Administration, BHI Trust’s Administrator.
In Monday’s statement, the company’s directors said the “unjustifiable reports” seemed to “incorrectly suggest that Global & Local was party to the alleged fraudulent” conduct of Warriner and the BHI Trust.
“This is completely incorrect. It will undoubtedly be established as this matter continues to unfold that Global & Local and its management team have played no role knowingly in the allegedly unlawful conduct … Global & Local also had no reason to believe that Mr Craig Warriner and the BHI Trust were acting improperly.
“We, like our clients who had invested in the BHI Trust, have suffered loss as a result of this conduct,” the directors said.
“Global & Local and its management team are completely independent from the BHI
Trust and Mr Craig Warriner. The BHI Trust has, over the past two decades, and until
recent events, proven to be a reliable and profitable investment option for us, our
families and valued clients.
“We always took the view that we would not advise investments to clients if we did not invest in any platform ourselves. That was also the case in respect of the BHI Trust.
“Directors, staff, their families and friends have also suffered loss arising out of investments in the BHI Trust, and stand to suffer the same losses as all other investors, depending on the outcome of this matter.”
The directors bemoaned what they called a focus only on Global & Local “to the
exclusion of the many other advisory firms that advised clients to invest funds with the
BHI Trust”.
“We also urge our clients and members of the public to please be careful of
opportunistic practitioners and persons who purport to be able provide a ‘quick-fix’
solution to the issues arising out of the situation regarding BHI Trust.
“We are advised that the process going forward is a long and extensive one and that resolution of these issues require patience,” the company said.
In response, Henderson said he noted the emphasis on the BHI Trust in Global & Local’s statement, adding: “I have only one question, apart from those I’ve already asked. Does the Global & Local media statement by default then suggest that if any investors who may possibly have funds invested through any of the Global & Local companies, in BHI International, BHI Strategy, BHI PLUS, BHI Capital Management and other companies — that these funds are intact and not affected by the BHI Trust collapse, and that these investors can have their money back?”
Answering Henderson’s question, Global & Local said it did not have “any knowledge of the current status of the funds invested in any of the BHI entities”.
“Like all parties involved, the details of the status of the funds will only become clearer as the sequestration and other related proceedings advance. Global & Local reserves any and all of its rights.”