Just R4.8m, according to the joint provisional trustees. It’s uncertain if there are any other accounts belonging to the trust. From Moneyweb.
The saga of Craig Warriner and the now sequestrated BHI Trust just got a whole lot more troubling.
The trust was sequestrated with lightning speed last week by Cawood Attorneys in an ex parte hearing (where only one party’s evidence is heard) in order to preserve whatever assets remain in the trust’s Nedbank account.
We now know that just R4.78 million remains. That’s according to a statement issued on Thursday by Cawood Attorneys, which brought the application for the provisional sequestration of BHI. Nedbank has been asked to pay these funds over to BHI Trust’s estate account.
This appears to be all that’s left from the nearly R3 billion Warriner is reported to have sucked into his suspected fraudulent investment scheme.
It’s not known at this stage if there are any other accounts belonging to the trust.
This poses a number of questions going forward for the joint provisional trustees (JPTs), Gert Lourens Steyn de Wet and Sumaya Ali Mohamed. They may, as in the case of crypto scam Mirror Trading International (MTI), apply to the high court to declare BHI Trust a Ponzi scheme, in which case any benefits received over the years may have to be repaid. There is no indication that this is the route the JPTs intend taking, but it is an option. In MTI’s case, the liquidators appear to be targeting the big winners.
Warriner is currently in Joburg’s ‘Sun City’ prison after handing himself over to authorities two weeks ago, claiming he had “used the funds of Peter to pay Paul” since getting smashed in the 2008 financial crash. According to court documents, he had been trying to trade his way back to solvency since then.
He also asked to be given a single cell because of threats received from other inmates.
Claims
A statement issued on Thursday by Cawood Attorneys says the return date for the final sequestration of the trust is set for 7 February 2024, but “this does not hamper” the JPTs “in the recovery of assets and or funds, which vest in the Trust by way of various provisions entrenched in the Insolvency Act to the advantage of the investors and the concursus creditorum (general body of creditors)”.
Claimants have until 25 January 2024 to submit written claims.
A website has been set up for claimants and others interested in updates on BHI at www.insolventbhi.com.
Suspicions reported years ago
Several companies and individuals blew the whistle on BHI, some as far back as 10 years ago, reporting their suspicions of possible fraud to the Financial Sector Conduct Authority (FSCA).
Red flags included claims of consistent returns from BHI – ranging from 15% to more than 30% a year – in good markets and bad.
The FSCA says it had wrapped up a prior investigation into BHI in 2020 and found several contraventions of financial sector laws.
Those investigated included Rubicon Administration Services, Axiam Capital, and Global & Local Investment Advisors.
Given the recent arrest of Warriner, the FSCA has extended its investigation into possible contraventions of the Financial Institutions Act, and the advisors who may have been involved.
Misrepresentation
Warriner, a former insurance salesman turned day trader, claimed to be an authorised representative of Axiam Capital, though it appears this may have been a misrepresentation.
Some BHI documents had the wrong financial services provider (FSP) number for Axiam, and one mandate seen by Moneyweb purports to be between a client and Axiam, though there is no signature for Axiam.
Grant Dykes of Axiam Capital told Moneyweb: “In 2017 it came to our attention that advisors, unknown to us, were promoting an Axiam association with BHI. We contacted them and demanded that they desist as we had no association with BHI. We received confirmation from them that they had done this in error and would stop doing so immediately.
“We were also contacted by the FSCA in 2017 and we provided them with details of these breaches by the advisors.”
Broker commissions
Brokers were paid as much as 5% commissions for referring clients to BHI, which is well above the industry average.
Global & Local’s senior investment advisor Michael Haldane wrote to clients saying the company was disturbed at media reports about Warriner and BHI Trust, not just for clients, but for team members and their families who also invested in BHI.
“Over the past two decades, the BHI Trust has proven to be a reliable and profitable investment option for our valuable clients, our families and us. All of us have not only seen significant and sustainable growth in our investments with BHI Trust but have also been able to consistently access and make use of those funds as and when necessary.
“Until now, we have had no reason to suspect any unlawfulness regarding the BHI Trust,” says Haldane’s statement.
Global & Local says it has lodged criminal complaints against Warriner and is in the process of investigating the fate of clients’ investments in the trust with a possible view to launching civil proceedings. It has engaged legal counsel and intends to assist in any insolvency enquiries to determine what happened to the BHI funds.
St Stithians responds
As previously reported by Moneyweb, Warriner made extensive use of his St Stithians College old boys’ network, and appears to have made donations to the school.
This prompted the school to issue a letter this week saying it had no exposure to what it calls a collapsed investment scheme run by an alumnus.
The school said it received donations from Warriner more than 10 years ago and any facilities named after him were being renamed.
One of those raising concerns was Marc du Plooy, CEO of Wealth Associates, who suspected BHI was a Ponzi scheme and provided the FSCA with extensive documentation showing it was not registered with the regulator and yet was able to attract funds from other FSPs (financial services providers).
