The directors and representatives of registered stock broking and fund management companies Axiam Capital Management and Afrifocus Securities, named in court documents as having interacted with BHI Trust and Craig Warriner, say they believe they have no liability regarding the financial scandal.
The companies are named in Werner Cawood’s founding affidavit, in his application for the sequestration of BHI Trust that he filed on behalf of Cawood Attorneys, along with Rubicon Administrative Services, named the trust’s administrator.
According to the affidavit, investors like Cawood paid their capital into BHI Trust’s bank account, and the administrator would then update the BHI Trust register in favour of the investor, before the investment manager gave its instruction to one of three stock broker firms, including Afrifocus Securities, to invest the capital.
Cawood highlighted in his affidavit and supporting investment documents that the “investment manager was authorised to invest and trade in specific JSE listed blue chip shares only. These included Billiton, BHP, Naspers, Richmond (sic) Standard Bank, MTN and Sasol”. He alleged funds had not been invested according to the mandate, highlighting BHI trustee Warriner’s admission in court to fraud for his alleged “irresponsible” handling of the trust.
In a joint written response to questions from the Mail & Guardian Grant Dykes and Colin Huber, directors of Axiam, an authorised financial services provider registered with the Financial Sector Conduct Authority and highlighted in court documents as a fund management firm Warriner was representing, said they were only recently alerted to this fact. They said they “feel betrayed” by Warriner.
“Axiam was not aware Warriner used our name on his documentation. Axiam, through court papers filed by Cawood Attorneys, became aware that Craig Warriner was fraudulently using our company credentials as well as our Financial Service Provider (FSP) number in various types of documents … counsel has been briefed to draft criminal charges against Warriner,” Dykes and Huber said.
They said BHI Trust was a client of Axiam from 11 April 2005 until 6 February 2013 when BHI Trust terminated its investment management mandate.
“Warriner asked to join Axiam in 2005 so he could gain the necessary training … experience and write the necessary exams to obtain a FSP number for his own entity … To maintain his qualifications and complete his annual professional development requirements he remained on our licence while he applied for his FSP number … He has still not received this licence,” they said.
The directors said Warriner qualified as an authorised representative in 2012 but was not authorised to initiate investment mandates or any contracts on Axiam’s behalf. He had no access to its clients’ accounts.
They said the BHI Trust had been described to them as “as an unregulated, casual business venture of 25 like-minded individuals in a private investment club” which held its own account at a stock broker.
“The BHI Trust then signed an investment mandate with Axiam to manage these investments in terms of the mandate at the broker. Axiam never has access to client funds. The funds can only move between the broker and the client’s nominated bank account,” Dykes and Huber said.
They said Axiam has not been subpoenaed to testify in the insolvency matter, nor had its legal team identified any risk.
“Axiam has never been part of marketing, soliciting, accepting, managing, administering and pooling money or funds or deposits for the BHI Trust and processing these from members of the public. None of our clients have experienced losses because of Warriner’s fraudulent actions and Axiam has never invested in the BHI Trust,” they said.
Afrifocus chief operating officer Alisha Pillay said the BHI Trust had been a client since 2001.
“BHI funds are held in the name of BHI Trust, for their credit, in a Corporate Saver account, at Nedbank. The trust has a non -discretionary mandate signed with Afrifocus. The mandate has Craig Warriner as the sole authorised trustee to act on behalf of the trust. Afrifocus has only acted on instructions of the duly authorised trustee,” Pillay said.
She said Afrifocus had not provided financial advice to BHI Trust or its clients and had no business relationship with them, adding: “Afrifocus has not promoted products of BHI Trust. We do not believe we have any liability in the matter.”
Rubicon Administrative Services could not be reached for comment despite repeated attempts to contact the company telephonically and on email.