High Court finds Fidentia boss guilty of fraud
"We are satisfied the admissions [made by Brown] are sufficient for conviction," Judge Anton Veldhuizen said last Friday. "At this stage, I do not find it necessary to elaborate on the exact basis for this."
The charges are related to dealings with the Transport Education and Training Authority and the Mantadia Asset Trust Company.
Brown was acquitted on seven other charges of corruption, money-laundering, theft and fraud.
Dressed in a smart grey suit, but looking tired, he sat quietly as he listened in on proceedings.
His bail of R1-million was extended and he was told to return to court on April 29, for sentencing arguments.
Outside court, prosecutor Jannie van Vuuren said he was relieved the trial was almost over and thanked the police and the Financial Services Board for their support. He also praised Brown for his willingness to find a resolution in the matter.
"It is definitely a relief. I think there is a massive cost-saving effect as well in terms of continuing with it. We called five of a potential 50 witnesses so far, so it could have dragged on for quite a while still," van Vuuren said.
"The accused also made a huge contribution to the matter by negotiating with the state and being willing to settle the matter in the way we settled it."
Brown handed in an admissions document last week in relation to the two fraud charges he was convicted on, but the court had misgivings about the strengths of the admissions. He then handed in an altered admissions document which the court accepted on Wednesday.
He initially admitted that Fidentia did not have enough liquid cash at the time of purchase, but that it had enough assets in the form of negotiable instruments. He also admitted that Fidentia had misrepresented itself by saying the full purchase price for Matco would be paid before it took control.
The admission statement handed in on Wednesday included the terms of the purchase agreement and made it clear that the purchaser had to have "immediately available funds".
"Fidentia and I misrepresented that Fidentia was able to do so and thereby induced the shareholders of Matco to enter into the agreement and sell their shares to Fidentia," Brown said in the altered document.
He admitted that Fidentia took control of Matco in October 2004, before full payment was made to all shareholders, contradictory to the terms of the agreement.
Accepting personal responsibility, he said he ordered the transfer of R69-million from the Matco account to Fidentia, which would later be used to pay the remainder of the Matco purchase price.
"The above actions amounted to a misrepresentation of the true facts in respect of the sale of share agreement and the method and time of payment ... My actions were unlawful and constituted fraud by way of dolus eventualis [indirect intent]."
The minimum sentence for fraud is 15 years in jail, unless extenuating circumstances can be proved. – Sapa