The man who shook Absa
Several financial services companies of which he’s a director operate from same building
TIMOTHEÜS PRETORIUS (41), also known as Timo, is the man behind Cortex Securities. Cortex is the Safex equity derivative dealer unable to meet its margin commitments to its clearing member, Absa. That forced Absa to buy R1,4bn worth of highly questionable shares. Pretorius is well known to Allan Thomson, senior GM of the JSE’s derivative instruments trading section. Thomson has expressed his respect at the responsible way Pretorius had handled extremely difficult problems over the past few months.
Pretorius is the sole director of OrigenSA, the public company trading as Cortex Securities. Finweek approached Pretorius for an interview – and perhaps even a picture – in order to introduce the man behind the scenes at Cortex to the public. Pretorius was very friendly in declining the invitation, because there’s a secrecy agreement between Cortex and clearing company Absa that he’s not prepared to violate.
Cortex is still doing business and it needs Absa’s goodwill on a daily basis. It would be irresponsible to sour the relationship now, says Pretorius.
Pretorius has come a long way as the man behind several other dealers in futures contracts linked with the JSE. In the JSE’s 2004 annual report, the name of PCS Futures appears in the list of “Financial derivative members”.
Later, PCS Agri boasted on its website that it was one of the “leading agricultural derivative” dealers. PCS Agri’s address was given as Greystone Building, Four Ways Golf Park. That’s the same address as Cortex.
In fact, on the website – which has stuck at 5 April 2005 – Ross Phipson (he’s still a director of some companies, along with Pretorius) writes: “PCS Agri, one of Safex’s leading agricultural derivative traders, appoints Cortex as their preferred financial futures brokers.” He then goes on to sing the praises of the wonderful opportunities for investors and speculators in financial futures contracts.
Safex Equity Derivatives (ED) and Safex Agricultural Products (AP) are two independent divisions of the larger Safex, which in turn is a subsidiary of the JSE. A separate right or membership is required in order to trade on both those markets. The right of PCS Agri to trade on Safex Agricultural was later transferred to OrigenSA, which also has the right to trade on Safex Equity.
The structure is therefore (briefly) as follows:
OrigenSA Ltd: sole director Timotheüs (Timo) Pretorius, a member of Safex ED and trades as Cortex; a member of Safex AP and previously traded as PSC Agri.
On both the Safex registers, OrigenSA is indicated as having had the right to trade on both those futures markets since 2004. OrigenSA was formed in 2004, and after the resignation of the nominal directors from what was once a shelf company, Pretorius remains as the sole director and is also the secretary.
According to Cipro, which keeps records of all companies and their directors, Timotheüs Pretorius is also a director of various other companies – many of them at the same address.
Pretorius uses auditors PricewaterhouseCoopers’ Welkom branch. Cortex, which is now experiencing difficulties, also uses those auditors. Some of the companies, such as Geared Asset Management, indicate that Pretorius could also be involved in asset management and other similar dealings.
A search on the Financial Services Board’s (FSB) website shows that not one of the companies is registered with the FSB. Pretorius’s ID number doesn’t produce any results from the FSB either.
Readers can go through the list of companies, especially asset managers and other financial services companies, and find out about any outstanding business transactions. Unfortunately, the type of business done by Cortex creates uncertainty about other business emanating from Greystone Buildings, Golf Park and Fourways.
The good news for Cortex’s other ordinary clients is that there are no indications to date that their funds have been used to make good the losses of the four big transactions. Unlike the case with Dealstream, which uses the RMB as its clearing agent, the administration at Cortex is in order and clients are protected by the JSE against any losses arising from irregularities.
But remember: If you have bought a single stock future on a share and the share’s price has fallen recently, like almost all shares have, it will be a loss. Nobody – not Cortex, Absa or the JSE – will compensate you for that.