23/10/2010 Bank advisers fleece clients - News - I…

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Bank advisers fleece clients Top Videos Top Pictures

October 22 2010 at 07:49am 3rd ODI:

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Several well-heeled Capetonian Standard Bank Accused
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clients have lost millions in crooked deals after the Venus
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shares in diamond mining companies in which the
advisers were also directors and shareholders.
The angry Standard Bank Financial Consultancy
clients include Cape Town theatre impresario Pieter
Toerien, who recently won a Western Cape High
Court case against one of the advisers, Arno
Döckel, over a R5 million deal. Toerien is also
taking the bank to court over a different R4m deal.

Standard Bank, however, implied this week that it

had washed its hands of the matter and accepted
no responsibility because “Standard Bank was not involved”.
Despite this response from the bank, a Cape Times investigation – including interviews and scrutiny of
court papers and documents collected by shareholders in one of the mining companies – has revealed
the following:

* The advisers are explicitly barred in the employment contracts they sign from selling products not
authorised by the bank. They are only allowed to sell life assurance policies, unit trusts and other
collective instruments. They are also not allowed to be involved in any company soliciting business from
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Standard Bank clients.
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*While insisting that they were private deals, the bank’s former hot-shot financial adviser, Hein le Riche,
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who is central to the scandal, admitted in an interview this week that some of the transactions were Transfers
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discussed in his office at Standard Bank’s Helderberg branch – in company time.
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*Le Riche also discussed at least one of the deals in an e-mail on Standard Bank stationery, according Women
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to a report by audit company Moore Stephens. Le Riche said he could not remember if there were other Maps & Directions
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*Le Riche’s superiors, to whom he said he disclosed his business interests – and who, in terms of bank Online Shopping
UK and Euro
policy were entrusted with oversight over his dealings on behalf of the bank – are themselves listed as
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shareholders in one of the companies, and Le Riche confirmed they held shares in another.

*According to an e-mail to shareholders from investor Henk van der Tak, one of these managers, Jaco
Holtzhausen, even met with him and Le Riche in Le Riche’s office, where they “told me of the
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opportunities” in one of the companies.
Holtzhausen still works at Standard Bank Financial Consultancy, where he heads the Western Cape IOL
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*Van der Tak, who invested R7m, and Wendy Mitford, who invested at least R21.3m of her retirement Wegotads
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money with Le Riche, have said that they were led to believe the investments they made were supported friendlyjob.
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by Standard Bank as an institution. The bank, however, denies that this was the case. StartView
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Le Riche is a former director and shareholder in the three companies concerned: Kimberley
Consolidated Mining (KCM) the shell company for the deal, as well as one of its components, Channal

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23/10/2010 Bank advisers fleece clients - News - I…
Mining, and Phoenix Diamond Holdings.
He said the plan was that Phoenix would merge with Channal, with the new entity then merging with a
further KCM company, styled as Kimberley Consolidated Mining and Exploration (KCME).
Once this complex reversing procedure was complete, KCM – in the financial game plan at least – would
list on the Johannesburg Stock Exchange (JSE).
In the event, Phoenix was liquidated, while the other two companies did merge to form KCM, which duly
listed on the JSE’s alternative exchange AltX in May 2008.
Investors were told the share prices would rocket after listing, but instead they plummeted against
expectations and the company was suspended a year later over non-compliance. Among other
derelictions of corporate governance, it failed to submit its 2009 and 2010 financial statements.

It is in the process of being delisted.

Leading up to the listing, Le Riche raised funds for the company through people such as Van der Tak,
Mitford, Toerien and Robert Masson. These investors either made out cheques directly to him, Channal
or Phoenix.

In some cases the investors were issued Phoenix shares against their hard cash, but throughout, the
understanding was that he would give them KCM shares once it listed.

Toerien was told by Standard Bank consultant Döckel – also a major shareholder in KCM – that once
listed the JSE share price “would be no less than R3”, but the shares now have a market value of only
R0.09 per share, according to court papers.
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Van der Tak lost out when he gave Le Riche R7m and was ultimately given 7 million KCM shares worth and personalise your phone with
the latest downloads.
R0.00001 each.
Toerien invested R9m, Mitford invested R21.3m, and Masson R480 000.
However, Le Riche was adamant this week that all of the deals he was involved in were made in his
personal capacity and had nothing to do with Standard Bank. Make sure you find the best
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He said there was no ethical breach, no breach of contract and no conflict of interest. use search engine.
“I disclosed all my outside investments to my directors, Jaco Holtzhausen and Keith Ferguson.”
But both Standard Bank directors are listed as KCM shareholders, and Le Riche admitted they had also
been Channal shareholders before the merger. TV Highlights Horoscopes

In total, six Standard Bank Financial Consultancy managers and advisers are invested in KCM, the bank Get your TV
Horoscopes
Highlightshere
here
has admitted.
Questioned on the matter, Standard Bank failed to explain how the apparent conflict of interest was
allowed to continue.
Mitford did sign at least two documents, appearing to relate to R6m of her investments, which stated the
transactions were “private” and not related to Standard Bank.

Le Riche said there were similar documents for all the transactions, but he only sent the Cape Times
Business Directory
one of Mitford’s; the other was sourced elsewhere.

Le Riche said he had met Mitford at her house in Somerset West to discuss the investments, but he later
admitted they had also discussed them at Standard Bank’s Helderberg branch.

Mitford, however, said: “He came to my house the first time, but all the other advice was taken on the
bank’s premises.”

Standard Bank was sent 24 specific questions, to which it responded with a generalised statement,
admitting that Le Riche and Döckel “were precluded from acting as intermediaries in the sale of either
listed or unlisted shares”.
But the bank referred to seven unnamed Standard Bank Financial Consultancy clients who had invested
in KCM “in terms of private contracts” with Le Riche and Döckel.
“The transactions S would all have been identified and prevented in the normal course of business had
they been conducted under the banner of Standard Bank.
“Standard Bank Financial Consultancy subjects all transactions to meticulous scrutiny by its advice,
product and planning evaluation process.”
But the bank did not explain how its advisers, apparently bound by contract “(extending) to include the
concepts of honesty and integrity”, could solicit payments from Standard Bank clients for their own
personal business interests.

Döckel was contacted by phone, but asked for questions to be sent by e-mail: “I’ll see if I can answer
them.”
He never did. - Cape Times

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"It's in the scorpions nature...", wrote 05:36pm on 22 October 2010

Hein the Rich, strikes again! Remember him from Noseweek 3 years ago? He wrote Financial

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23/10/2010 Bank advisers fleece clients - News - I…
Advisor behind his name when he hadn't even written the exam and fleeced SB clients by switching
them unnecesarily between policies. And Standard Bank just claimed it was a typo! Hilarious if it
wasn't so pathetic.

John Coombes, wrote 05:06pm on 22 October 2010

Suckers!! But i was one too. Back in the 80s, a guy by name of de Jager was flogging shares in
Kaapse Hoop diamond mine up near Nelspruit. Incredible presentation. He drove Mercs and the
rest, while my money was poured down the drain. Diamonds are whose best friend? The shysters.
We get caught by the bling which ends in a sting. And then there was Jack..... If you can't lose it,
don't choose it. And the last guys to believe are those who claim that banks are involved; oldest
con line in the business. And the list grows. Whateever happened to Kubus?? nudge-nudge, wink-
wink.

Peter, wrote 04:24pm on 22 October 2010

Standard Bank clients were enticed by huge profits that were supposed to be made .....in fact I call
it greed ...enticed by their own greed . Greed to have more and more .Look at the last global
financial disaster that caused worldwide recession,many countries are still trying to recover,was
caused by greedy banks and greedy customers !!!!!

banks are rip off's, wrote 12:24pm on 22 October 2010

You see how crooked the banks are? They've been ripping off the whole world for a long time.
Down with the bankers...

Anonymous, wrote 12:08pm on 22 October 2010

We went to a talkseminar last night about online investingonline share trading and the JSE under
the banner of Standard Bank. It was very exciting as we are keen in investing. Now i just feel
deflated. Who can you trust? This is why people don't invest. Out of fear, not because we're
uneducated. Maybe that's why my dad always says: stick it under your mattress! It might not be the
best advice, but the very people you trust are the ones who will do you in. Greed is a deadly sin!

Ngamla, wrote 09:06am on 22 October 2010

This is the true face of crime in South Africa. This is where it all comes from. The rest of it is a
knee-jerk reaction to what is happening at the top. Ill-gotten gains are the name of the game, and it
is all at the highest level. This is why apartheid and colonialism had to be protected so viciously so
these types of shenanigans could go on without question and punishment. This is the reason why
the minorities that have held onto economic power are still clinging onto it for dear life ‘till today. It is
easy to blame the poor for the crime levels but where does it all really come from? The answers are
starting to slowly trickle out; crime in this country is not only about the black majority, only. So the
next time anyone feels the need to point fingers at the poor for the crime we live with, think deeply
about how your three-storey neighbour may have accumulated that wealth.

Showing items 1 - 6 of 6

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