Bridge directors are charged

DEFRAUDED: SINGLE COMPLAINANT LOST R1 346 960

Accused face charges of fraud and contravening Banks Act and FAIS Act. Moneyweb

Controversial entrepreneur Corne Aldum and his sons Maritz and Emile have appeared in the specialised commercial crimes court where they were charged with fraud and contravening the Banks Act and the Financial Advisory and Intermediary Services (FAIS) Act.

The Aldums founded the Bridge group of companies, which included Bridge Finance, OneLaw and Cambist. These companies specialised in unsecured lending and debt collection.

Along with attorney Clifford Coombe, they were directors of Bridge Finance.

Coombe was originally charged with the Aldums although he was not in court. However, the Hawks have since confirmed he appeared in court this week and was released on R10 000 bail.

The charges relate to debentures sold to the public with a guaranteed return as high as 19%. However, in 2014 when Bridge ran into trouble, investors were first offered a return of 1% and then payments stopped altogether.

According to the draft charge sheet, the state bases its case on the money lost by a single investor, Leon Strydom. He invested R1 346 960 and lost it all. The state is claiming the Bridge directors intentionally set out to defraud Strydom as they were aware they couldn’t pay the 19% interest.

The state also claims Bridge was conducting the business of a bank by accepting deposits from the public. This is illegal under the Banks Act. Plus, it has charged the directors with contravening the FAIS Act by offering financial services even though Bridge was not an authorised financial services provider.

Although one investor is mentioned in the charge sheet, the National Prosecuting Authority has suggested this may change. The number of shareholders and debenture holders was over 1 000.

“The charge sheet is provisional as the case is still under investigation,” said spokesperson Phindi Mjonondwane.

The case was postponed until October 30.

Coombe was also the founder of law firm Coombe and Associates, one of SA’s largest debt-collection firms. Investigations by Moneyweb uncovered systemic abuse of garnishee orders by the firm while it operated as Coombe and Associates and after it changed its name to Flemix & Associates.

Flemix was one of the respondents in a case brought by the Stellenbosch Law Clinic against a number of credit providers for abusing emolument attachment orders. That was argued all the way to the Constitutional Court, which found in 2016 that the Magistrate’s Court Act needed to be changed to protect debtors.

Last month the Stellenbosch Law Clinic filed papers in a new case before the Cape High Court in which Flemix is again one of the respondents. The clinic is arguing that a number of credit providers were unlawfully adding legal fees to the accounts of clients against whom they had secured emolument attachment orders.