The state has provisionally dropped charges against Michael Haldane and Sona Pillay but investors could seek private prosecution. (File photo)
Prosecutors have provisionally withdrawn charges against disbarred Global and Local financial advisor Michael Haldane and Rubicon director Sona Pillay in connection with the R2.7 billion BHI Trust Ponzi scheme.
Haldane and Pillay appeared briefly in the Palm Ridge magistrate’s court last week where advocate Nancy Pillay said the state was provisionally withdrawing charges against the men for further investigation. They had faced charges of fraud and/or theft and/or money laundering in relation to the scheme.
She said Haldane and Pillay were free to collect their R100 000 bail money and the matter would be re-enrolled when the investigation was finished.
This brings to reality the fears of investors financially devastated by the scheme, who last year said the police had told them that their cases against Haldane had been closed.
More than 1 000 investors, many of them pensioners, lost an estimated R1.6 billion in the scheme when it collapsed in October 2023.
Haldane, who allegedly marketed the scheme to investors, was arrested along with Pillay in June 2024. This was after BHI Trust trustee Craig Warriner was convicted of fraud and sentenced the previous month to an effective 25 years in prison for his role in the scheme.
Warriner had pleaded guilty to 206 counts of fraud and one of contravening the Financial Advisory and Intermediary Services Act for operating an investment scheme without a licence or being registered as a financial services provider.
His co-trustee, Christian Ashcroft, opened a case against Warriner after he lost money in the scheme and investors started asking questions. Warriner told the court he had managed the fund “irresponsibly” using investors’ funds to pay out fake returns.
The Financial Sector Conduct Authority debarred Warriner, Haldane and his associate Mauro Forlin for 30 years for their involvement with BHI Trust.
Haldane and Pillay declined to comment last week.
Asked to comment on investors’ concerns that the state had not made progress with the investigation, and that not all parties had been interviewed, which had led to charges being withdrawn, National Prosecuting Authority (NPA) spokesperson Phindi Mjonondwane said there was not enough evidence to proceed.
“There is insufficient evidence to prove the elements of the crime of fraud and/or theft and/or money laundering. Investigation is pending and it cannot be stipulated with certainty as to its finality. I have perused all their statements. Some witnesses were also interviewed,” she said.
Mjonondwane added that it was a “false assumption” that not all of the key investors who hold information regarding the case had been interviewed by the authority, telling the Mail & Guardian: “The state has to rely on evidence properly obtained, using reliable and authentic information. The private and confidential information obtained by private investigators is unlawful and cannot be used in court.
“The work done by the provisional joint trustees is still in progress and we did not receive any authority from them to use evidence obtained for their purpose/investigation.”
She said that to prove a case beyond reasonable doubt “there must be prima facie proof of the crime committed by the accused”.
“As it stands, there are assumptions and hearsay evidence in the docket. Unfortunately, at this stage, there isn’t sufficient evidence to keep the matter on the roll,” Mjonondwane added.
Sumaya Mohamed Ali and Gert de Wet, the high court-appointed joint provisional trustees of the BHI Trust in sequestration, said last week that they had obtained financial information and bank statements regarding the trust.
“The JTs [joint trustees] applied to the master of the high court to convene enquiries into the trade, dealings and affairs of the BHI Trust and obtained financial information and bank statements which would otherwise not be available for investigation,” they said.
“The JTs have and will continue to summons various identified individuals, who would possibly shed light on the nature of the dealings of the BHI Trust. The confidential enquiry process will further illuminate claims against additional individuals and or legal entities at the heart of the scheme in the pursuit of recovering monies for the creditors of the BHI Trust.”
They said documents obtained through their powers as trustees could not be shared with the public “unless the NPA has a criminal remit”.
“The NPA and the JTs have no co-operation agreement, other than the fact that the Insolvency Act determines that, should trustees come across any criminal activity during their civil investigations, they are to inform the NPA,” they said.
“The NPA can, however, request any documents from the JTs. The JTs can then consult the master to receive agreement that such documents be shared.”
The trustees said they had not received a request from the prosecuting authority although they were “most willing to share documents with the NPA within the applicable legislative framework”.
“At this junction, the JTs are still investigating, trying to track and claw back the lost monies. The liquidation and distribution account will indicate what percentage recovery, legitimate investors and creditors stand to receive,” they said. “Up to 24 January 2025 … R12 400 000 has been clawed back.”
A source close to the investors who asked to remain anonymous said the NPA’s stance was “unfortunate” but declined to comment further.
Forensic investigator Bart Henderson questioned whether the prosecuting authority had raised any objections or concerns regarding the legality of how evidence was obtained that witnesses had presented to it.
“The NPA does not have to rely on any information from anyone. There is information, intelligence as well as admissible evidence produced during the course of any investigation, private or otherwise, that can serve to guide the NPA in its investigation,” he said, adding that the prosecuting authority has the power to obtain any admissible information it requires by way of subpoena and search warrants.
“Have they used these powers? Both the SAPS and the NPA have the power to compel the production of records in a criminal case under investigation,” he said.
The trustees had handed key evidence, obtained under lawful subpoena, to the prosecuting authority, Henderson said.
“The NPA could subpoena this evidence, themselves, if dissatisfied with the legality/admissibility of evidence and evidentiary value. Detailed records were handed to the NPA … to assist with their investigation into potential money laundering which they [the trustees] had a duty to report.”
A condition of the Prevention and Combating of Corrupt Activities Act is that it is a duty to report suspect transactions in excess of R100 000.
“It would have been a failure on the part of the joint trustees not to have reported this,” Henderson said.
“Information provided to the NPA … was based in the interest of transparency and, more importantly, duty under law. The NPA has not appeared to deem it fit to draw any inference from this duty on the part of the joint trustees.
“Neither does the NPA seem to have lent any credence or weight to the preponderance of evidence provided [which] the trustees felt indicated, at least on balance of probability, an economic crime.
“It seems to me all the SAPS, since October 2023, and the NPA, since only last week, have done to ‘investigate’ is obtain statements from victims and not conduct one shred of actual investigation. It is clear, abundantly so, that there has been no investigation whatsoever into the roles of Mr Michael Haldane and Mr Sona Pillay in the collapse of BHI Trust.
Henderson said he had advised the complainants to approach the national director of public prosecutors to request a review of the case file and the issuing of a nolle prosequi certificate.