'Godmother of BEE' fired from Absa
Prominent businesswoman Danisa Baloyi has been dismissed from the boards of Absa Group and Absa Bank due to her link with the Fidentia scandal, the bank said on Tuesday.
“This action is the culmination of a process to review the position of Dr Baloyi on the Absa boards, following public disclosures regarding her involvement with the Fidentia matter,” said Absa spokesperson Makhosini Nkosi.
The termination was immediate, he said.
A Financial Services Board (FSB) report on Fidentia Asset Management (FAM) accused Baloyi of being exposed to a conflict of interest in her role as a trustee on the board of the Living Hands Trust, the Mail & Guardian reported earlier this month.
Baloyi has responded that she had no conflict of interest and has reportedly said the allegations against her suggest that “someone [is] out to get me”.
Baloyi and fellow Living Hands trustee Hjalmar Mulder were both directors of Fidentia Holdings, the sole shareholder of FAM, the company managing the Living Hands Trust.
Fidentia’s curators uncovered an R8-million loan Fidentia paid to her—which Fidentia executive chairperson J Arthur Brown denied had been written off, saying that it was a legitimate loan to help her capitalise her business assets.
Baloyi also helped manage the Fidentia South African Youth Choir and was a patron of the Fidentia Orphans Trust.
Named Businesswoman of the Year in 2003, she sits on a number of boards including Absa, the Advertising Standards Association, the Road Accident Fund, South African Women Investments and the National Skills Authority. She is also a director of Denel, MGX, the Don Group, AMB and Adcorp.
Baloyi wields enormous influence and was the first female chair of the Black Business Council, which set up the BEE commission—she is part of the 14-person presidential advisory team on BEE, which perhaps explain why she calls herself a “godmother of the black economic empowerment laws”.
Fidentia boss still behind bars
Meanwhile, Brown was still behind bars by mid-morning on Tuesday, as his lawyers sought to put together R1-million bail.
The bail was granted on Monday by a Cape Town magistrate, who said it could be paid in cash or by means of a guarantee. However the Scorpions rejected Brown’s offer of surety on his luxury Cape Town home.
Brown and his co-accused, Fidentia’s former accountant Graham Maddock, face charges of theft and fraud which currently total just over R200-million.
At his bail hearing last week, Brown handed in a document which said he had offered to quit his position in a bid to stave off curatorship.
The document, a letter from Fidentia’s lawyers to the FSB, was attached to an affidavit by Brown setting out the reasons he thought he should be granted bail.
The letter, dated December 6 last year, outlines what it said was “a summary of our discussions as to how our client [Fidentia] might exit its asset management business”.
It said the FSB had agreed that if a particular “plan of action” could be achieved, it would not place FAM under curatorship.
The lawyers proposed an agreement under which Fidentia would exit the asset-management business.
“This will be achieved by way of an orderly realisation of all the assets held by FAM, and the return to investors of their funds,” the letter said.
“Arthur Brown will, with immediate effect, no longer be involved in any aspect of the management of FAM, but will assist in the realisation of the assets.”
Brown himself would undertake to pay the shortfall to investors if the sale of Fidentia’s assets turned out to be less than the amount to which investors were entitled.
FSB spokesperson Russel Michaels said on Thursday that these suggestions had come from Brown, not from the board.
“Obviously we didn’t fall for that: that’s why we went for curatorship,” he said.
Scorpions investigator Geoffrey Edwards, called to the witness stand, told the court indications were that Brown would interfere with witnesses if he was freed.
None of the people he had interviewed in his investigation, who included Fidentia employees, were afraid of Maddock.
“[But] everybody that I spoke to who was linked to Fidentia was afraid of Mr Brown,” he said.
This fear appeared to be generated by two men, Ray Nelson and Jacques Malan, who had been described to him as Brown’s “goons” or “henchmen”.
“They would be armed, walk around the offices with their firearms on display.
People felt intimidated by these two,” he said.
He said Brown had two South African passports, which was irregular, and that it was “strongly suspected” that both men had funds stashed in offshore banking accounts.
According to the FSB, a total of R680-million was unaccounted for, he said.
“Any amount of bail set now would be negligible should they decide to flee,” he said.
In an affidavit handed into court on his behalf, Maddock revealed that though he and his immediate family own property worth R8-million, including a house in Constantia, he has overdrafts totalling R460Â 000 at three different banks.
He said Fidentia had received about R1,3 billion from investors, which it invested in the money market, immovable property and private equities.
“The fact of the matter and to the best of my knowledge and belief is that all amounts received by the group can be accounted for and there are no ‘missing millions’,” he said. - Sapa