SORRY SAGA SHOULD BE OVER BY YEAR END
The sorry story of linkedinvestment service provider Ovation, which collapsed following the theft of R270 million by Angus Cruikshank, the company owner, is slowly reaching a conclusion.
By the end of the year, the curators, John Levin and Barend Petersen, who were appointed in 2007, hope to have effectively closed down the Ovation business.
Over the past three years, the curators have had to fight off numerous court challenges, particularly from the trustees of the Ovation retirement funds, which have increased costs and reduced benefits for investors. The curators also had to keep Ovation going, manage the investments, and pay income to pensioners and commissions to advisers.
The main losers have been investors who had their money channelled into the Common Cents money market fund.
Early on, the curators decided that the losses must fall where they lay. In other words, the losses were restricted to the investors who had invested in Common Cents and were not spread among all Ovation clients. The only exception was where Metropolitan Life and mCubed had to make good to pensioners. However, all Ovation clients have had to bear the costs of the curatorship.
Levin says that most investors have now either been paid out or had their investments transferred to other financial services companies.
Once the Metropolitan assets have been transferred to Sanlam’s Glacier platform by the end of August, the main outstanding issues, according to Levin, will be:
The five percent of assets held back to ensure that all claims can be met. The residue of this amount, which still has to be finalised and will include costs, should be distributed to investors by the end of the year.
Tracing about 600 investors to whom about R42 million is due. Levin says that much effort is being put into tracing these investors so that the money does not have to be handed over to the Guardian’s Fund, which will create its own complications.
Outstanding legal claims, including about R30 million against various companies associated with Cruikshank and a claim of R200 million against Absa, for which summons was issued recently. A decision still has to be made how these claims, which could take up to three years to finalise, will be handled. One option is to liquidate Ovation and allow the liquidator, in consultation with the creditors, to decide what to do.