Weekend Argus (Saturday Edition)
‘Ponzi man’ amassed R116m in properties
Over R2bn owed to investors by deceased
HE wasn’t employed and neither was his wife.
However, a statement of assets which Herman Pretorius compiled shortly before his death showed that properties worth R116.9 million, including his family home in Welgemoed and a holiday house in Hermanus, were owned by entities controlled by family trusts.
In addition, he drove an Aston Martin DBS worth R2.5m, and had five other vehicles, as well as shares in Wesizwe Platinum worth more than R46m, and investments and loan accounts worth R100.5m.
The Aston Martin has since been sold.
Pretorius shot dead one of his business partners in a Foreshore office block in July last year, then turned the gun on himself.
This week, in a judgment handed down in the Western Cape High Court, details of his extravagant lifestyle, allegedly at the expense of investors who pumped their money into his various investment schemes, began to emerge.
The judgment stemmed from an application the trustees of the RVAF Trust – one of Pretorius’s entities – lodged in October last year to have his deceased estate sequestrated.
Shortly after the application was filed, a group of investors claiming they are owed R5.2m, applied for leave to intervene as co-applicants in order to support the trustees’ application, or to obtain a sequestration order if the trustees failed to do so.
Pretorius’s wife Susan, who was appointed executor of his deceased estate, together with the estate, opposed the application.
Although she fought tooth and nail to prevent a provisional sequestration order which would place the estate’s affairs in the control of curators, the order was granted this week.
In the sequestration application it emerged that Pretorius conducted investment schemes through a number of entities, including the RVAF Trust, from 2002 until his death.
A firm of chartered accountants hired by the trustees to assist in their investigations analysed records which show that investors’ funds were never invested in the hedge funds and other con- ventional investments represented by Pretorius, but that money entrusted by later investors was paid to earlier investors.
The accounting firm also found that amounts totalling over R7.5m flowed from the RVAF Trust’s account to Pretorius personally, from January 2009 to August last year.
Additional amounts totalling about R14.7m were also transferred from the RVAF Trust’s account to Pretorius, via the Seca Trust – another entity forming part of his empire – from July 2007.
The intervening investors also pointed out that the accounting firm’s analysis showed that Mat Worldwide Ltd ( MWL) was a company established in the British Virgin Islands, which Pretorius used for investors who wanted to invest offshore.
According to evidence before the court, more than R2 billion is owed to investors.
Pretorius’s deceased estate has assets totalling only R20.5m.
Judge Owen Rogers said that if the deceased estate was indebted to the defrauded investors for more than R2bn, the estate was clearly hopelessly insolvent.
“The simplest and most powerful evidence is that, at least prima facie, the monies which Mr Pretorius caused his entities to receive from the investors have disappeared, and there is no proper record to show what became of the money.
“He attracted large sums from gullible members of the public (many of these from country towns in the Western Cape) by promising above-average returns of 14 to 25 percent per annum – the time-honoured method originally made famous in the 1920s by Mr Charles Ponzi,” he added.
He granted the investors’ application to intervene as coapplicants, and ordered that Pretorius’s estate be provision- ally sequestrated.
Pretorius’s wife and all other interested parties were called on to show cause, on April 9, why the order should not be made final.