Joint
Media Release by the Financial Services Board and the Curator of the CAF Pension
Fund
FSB,
curator respond to Korsten allegations
Following a "News Release" issued by Laurie
Korsten dated 9 September 2000, the Registrar of Pension Funds and the curator
of the CAF Pension Fund consider it appropriate to issue this Press Release in
so far as there are certain statements made by Laurie Korsten in the "News
Release" which are not factually correct and on the contrary misleading.
"The
purpose of this press release is not to express an opinion as to the judgment
delivered in the High Court of South Africa in the criminal matter involving
Laurie Korsten and his brother Jan.
"The
Korstens were by their own admission and based upon documented facts responsible
for the transfer of about R35 million during 1994 from two pension funds to a
private company - Corporate Acceptances Finance (Pty) Limited - wholly owned and
controlled by the Laurie Korsten family.
"That
transfer was unlawful and wrongful and led to extreme hardship to over 300
members and pensioners, as the funds that were transferred to the Korsten family
company represented more than 95% of the assets of the pension funds.
"The
Korstens failed to disclose their conduct to the Registrar of Pension Funds and
only during December 1996, and after the Korstens had repeatedly been asked by
the Registrar to submit the pension fund’s financial statements, did Laurie
Korsten confess this wrongdoing to the Registrar and to the auditor of AMK
Technologies (Pty) Ltd (the participating employer company).
"The
auditors KPMG were shocked by the revelation and reported the matter to the
Public Auditors and Accounting Board as the brothers were chartered accountants.
"In
the beginning of 1997 Laurie Korsten handed the Registrar a written proposed
scheme which Korsten maintained could in time result in the recovery of the
pension fund monies that had been lost. After careful consideration of the
proposal by the Registrar and certain accountants, it was found that the
proposal was totally unrealistic and had no prospects of succeeding.
"Korsten’s
statement that there was an acceptable agreement between him and the Registrar
is therefore totally unfounded.
"Shortly
afterwards the Korsten family companies – Corporate Acceptances Finance (Pty)
Ltd, AMK Technologies (Pty) Ltd and Wokor Investments (Pty) Ltd - were placed
into liquidation as they were insolvent.
"The
curator applied for the sequestration of the estates of the Korstens. In a bid
to avoid the sequestration of their estates, the Korsten brothers, through their
attorneys, proposed that they hand over their entire estates to the curator and
that an informal sequestration takes place.
"In
considering this proposal the curator ascertained from auditors Deloitte &
Touche that they would be prepared to administer and informally liquidate the
Korsten estates at a fee of 7.5%.
"In
an unwarranted and unfair attack on the curator, Laurie Korsten has stated that
the curator refused to settle with the Korstens unless the curator was given a
further 7.5% of the settlement amount. Documents in the possession of Laurie
Korsten’s attorneys and the Registrar, reflect that this statement by Laurie
Korsten is false.
"Laurie
Korsten was correct when he stated that the curator was not prepared to accept
the settlement proposed by him, but fails to give the true reason. The curator
rejected the proposal as Laurie Korsten maintained that his net estate was worth
less than R800 000 – and it was this estate that he intended handing over to
the curator. The curator then launched the applications for the sequestration of
the Korsten estates.
"However,
on the eve of the curator requesting the court to grant final sequestration
orders against the Korstens, they agreed to hand over cash and assets in the
order of R6,25 million. The curator’s acceptance of the sum was approved by
the court and the Registrar’s office. The curator has not received the full
amount of R6,25 million to date, but only R3,25 million being the cash component
of the settlement.
"The
further statement by the Korstens that they proposed to resolve the case ‘on a
financially viable basis … to prevent anyone from being prejudiced … ’ is
untrue. Laurie Korsten’s initial proposal was to hand over his estate which he
maintained had a value of less than R800 000 against a loss which, at that
point, was more than R50 million.
"Only
when he was brought to the doors of the court for the final sequestration of his
estate, did his offer to pay R6.25 million materialise – an amount still far
from the sum in excess of R50 million which was then outstanding. Korsten’s
recent claim that his family has contributed R20 million is also false.
"Laurie
Korsten has also made serious allegations regarding procrastination by the
curator which he maintains has resulted in real hardship for some of the members
of the pension fund. The suffering endured by members of the pension fund is a
direct result of the Korstens’ conduct.
"Furthermore,
his conduct and particularly the way in which information was withheld and
records not properly kept by the Korstens, has resulted in a long and arduous
task for the curator to unravel and resolve the matter as best he could.
"The
curator has at all times kept the Registrar fully informed of the curatorship,
the delays in bringing the matter to finality (which are beyond his control) and
the curator and Registrar have periodically reported to the High Court about the
curator’s progress.
"Laurie
Korsten’s allegations that the curator had delayed the matter unnecessarily
and that he had never passed any financial reports or audited statements, are
false. The curator, under the auspices of the Registrar and court, had passed
all necessary reports and audited statements which were also made available to
the pensioners.
"Ironically,
Laurie Korsten, having been responsible for the loss of virtually the entire
pension fund, withheld this fact from the Registrar by delaying to submit, as
required by law, the pension fund’s financial statements and reports. His
failure to submit was far beyond the deadline for this submission.
"Furthermore,
Laurie Korsten admitted that he had omitted to appoint auditors for the pension
fund when he had represented to the Registrar that he had done so, as required
in terms of the Pension Funds Act.
"The
Registrar and the curator have documents – some of which are from Laurie
Korsten’s attorneys – which demonstrate that the content of the media
release by Laurie Korsten is to a large extent false and an unwarranted attack
on the offices of the Registrar and curator.
"The
Registrar is confident that the curatorship has been conducted and administered
by Tony Mostert in an efficient and professional manner and that the allegations
made by Laurie Korsten in this regard are simply not true.
ENDS
Issued by
Russel Michaels
Manager: Communication & Liaison
Phone 083 281 2954
Sunday 17 September 2000