1Mobile is the latest in a string of Coetzee-related schemes that have resulted in losses of yet-untold millions for investors. During the late eighties and early nineties the Masterbond Group of Companies, to which Coetzee was linked, stripped many investors of their entire life savings and future income streams.
These are only some of a number of examples in South Africa where misrepresentations and fraud have been perpetrated by company directors and where entities are set up with the primary purpose of fleecing unwary investors of their hard earned cash."
In the words of the Honourable Mr Justice M C Nel, in The Final Report of the Commission of Enquiry into the affairs of the Masterbond Group and Investor Protection in South Africa, published in April 2001, "During the late eighties and early nineties the system designed to protect investors in South Africa failed and many investors lost their entire life savings." Nel describes the failure of the Masterbond Group of Companies, which over a number of years, attracted about R1-billion by promising secure investments, as being engaged in highly speculative projects which generated little or no return. The Nel Commission of Enquiry was appointed following public outcry.
But has anything really changed since the Nel Commission Report?
The legislature has enacted a new Companies Act, the Financial Advisory and Intermediary Services Act and the Prevention and Combatting of Corrupt Activities Act. Furthermore, the supreme law of the land, the Constitution of the Republic of South Africa, provides that "The objects of the police service are to prevent, combat and investigate crime, to maintain public order, to protect and serve the inhabitants of the Republic and their property, and to uphold and enforce the law."
Despite these provisions, sadly there is little pro-activeness and vigilance in the combating and investigation of white-collar crime. Moreover, there can be no effective prosecution if a proper investigation by suitably trained and knowledgeable investigators is not carried out.
In a recent matter, where I acted for the liquidators, the sole director gave evidence at an inquiry that he is neither registered as a taxpayer nor has he ever paid tax. The attitude displayed by the particular director was such that he was not at all concerned about the legal consequences of his actions. I am of the view that this attitude demonstrates the complete lack of consequences for white collar criminals who are simply not brought to book by the relevant authorities.
In another recent matter, the sole member and controlling mind of a close corporation which generated a turnover of R100-million per annum utilising in excess of R6-million, admitted under oath to having lost all of the investors' monies. These stories are not confined to these few examples, and in many instances, although transgressions of the laws of the land are patently apparent, and reported the requisite authorities, the perpetrators are seldom prosecuted. This is the root of the problem and has allowed persons like Coetzee to simply open shop again with the primary objective of pilfering unwary investors of their monies.
The failure of the system to bring perpetrators to book is highlighted by the investigation and charges laid against J. Arthur Brown with regards to the Fidentia saga. Despite million of Rands having been spent on the prosecution of Mr Brown, prosecutors only managed to secure a fine of R150,000.00 as a penalty against the hundreds of millions that appear still to be unaccounted for.
However, there is something that can be done. By working with legal experts who have partnerships with fraud and risk management specialists that operate in South Africa, Africa and abroad, vulnerable people can protect themselves from becoming potential victims. Legal firms that specialise in litigation can manage and carry out corporate investigations and offer services such as gathering intelligence and profiles on both businesses and individuals to assist clients in assessing risks, fraud risk management services to identify and manage fraud vulnerabilities and fraud awareness training.
With Ponzi schemes being the order of the day and countless people losing millions to commercial fraudsters and con artists, the public needs to know that they have the power to put a stop to the criminals who prey on the innocent.
Attorney Craig Assheton-Smith is conducting the enquiry on behalf of the liquidators in relation to the affairs of 1Mobile
