Prowealth employees say they were also duped by Potgieter

 

NOBODY knew about the multi-million dollar swindle that the late Riaan Potgieter is now claimed to have carried out at his Prowealth group of companies before his suicide in December 2008.

The only person who knew that Potgieter, the founder of the Prowealth group, was allegedly embezzling investors’ money on a grand scale was Potgieter himself, according to evidence given by former employees and business partners of Potgieter in the High Court in Windhoek last week.
The one recurring theme that ran through witnesses’ testimony over the first four days of an Insolvency Act enquiry into the financial collapse of a key component of the Prowealth Group, Prowealth Asset Managers, was that they were never aware that Potgieter was allegedly defrauding investors of tens of millions of dollars.
Potgieter is claimed to have used investors’ money to finance his own high-flying lifestyle and to cover the loss-making Prowealth group’s business expenses.
The enquiry is scheduled to continue before the Master of the High Court, Elsie Beukes, today.
Beukes was told last week that out of N$103 million that investors deposited with Prowealth Asset Managers about N$101 million is unaccounted for.
After the High Court granted a liquidation order against Prowealth Asset Managers in late February 2009, it was discovered that more than N$18,36 million had been transferred from that company to a sister company, Prowealth Consult, which provided administrative and support services in the Prowealth Group. More than N$21,49 million was also transferred from Prowealth Asset Managers to Potgieter’s personal bank accounts, while over N$2,98 million was transferred from Prowealth Consult to Potgieter’s personal accounts.
Transfers to Potgieter’s accounts were still being done on his instructions about a week before his suicide, according to Potgieter’s former private assistant, Arlien Burger.
Potgieter was found dead in his home in Klein Windhoek on December 8 2008. On December 1 2008, Burger still relayed instructions from Potgieter to a bookkeeper in the Prowealth group, for N$100 000 to be transferred from Prowealth Consult to one of Potgieter’s bank accounts, and for another N$100 000 to be transferred from Prowealth Asset Managers to another of Potgieter’s accounts, according to an email message that was shown to Beukes on Thursday.
Burger said she only realised something was amiss with Potgieter’s handling of investors’ money after his death, when investors started making enquiries about their investments.
Until then, she said, she was under the impression that investors’ money had been safely placed with Sanlam or Plexus Asset Management.
Burger said whenever she had to help Potgieter to prepare statements for investors he provided her with the figures that had to go onto the statements. On his instructions the records of investors’ investments had to be saved not on the Prowealth computer system, but on a memory stick – supposedly because this information was confidential, Burger said.
Also on Thursday, Eduard Gous, who was a bookkeeper with the group, told Beukes that in his opinion the people in the top structures at Prowealth Asset Management and Prowealth Consult did not know what was being done with investors’ funds. He remarked that he used to think Potgieter was a good person. “Now I don’t,” he added.
Gous also told the enquiry that he followed the practice of his predecessor as bookkeeper to designate investors’ deposits in Prowealth Asset Managers’ books as loans to Potgieter. Prowealth’s auditors also advised him to enter transfers from Prowealth Asset Managers to Potgieter and to Prowealth Consult and other entities in the group as “loans” in the companies’ books, Gous said.
These “loans” between Prowealth investors and Potgieter totaled more than N$35,89 million between August 2004 and February 2007, according to a list which was provided to Pieter Lingenfelder, who was the general manager of the group.
Lingenfelder has told the enquiry that Potgieter informed him his relationship with the investors was privileged, and that the details of their investments with Prowealth were confidential. Lingenfelder has also acknowledged that investors’ money was used to cover the Prowealth group’s business expenses.
Lingenfelder said as Potgieter was the sole shareholder of the Prowealth group, it was his decision what to do with his clients’ money.
“Mr Potgieter’s arrangements with his clients’ money wasn’t my concern,” he remarked.