18th December 2009
As of this morning, I can view client portfolios on the Intervest site – still working through it to see if they are all there but so far it looks like it has been done correctly.
From what I understand, clients can get their own access to their portfolios but they will have to register on the site first www.intervest.co.za
Gregg
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18th November 2009
Just been checking the funds on the Ovation site and the amount that will be retained by the Curators until the curatorship is finally over has been moved into the RMB Money Market Fund…it appears to be 5-6% of each investor’s funds (at current market value).
It is our understanding that when the whole matter is finally resolved, any funds still left in this fund will then be released to each investor.
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5th November 2009
TO INVESTORS AND INDEPENDENT FINANCIAL ADVISORS – APPLICATION TO HIGH COURT TO CLOSE THE OVATION BUSINESS AND RETURN ASSETS TO INVESTORS
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1. On 15 October 2009 we informed you that the High Court had on that date granted an order:
1.1 authorising us to close the Ovation business and to return assets to investors subject to a retention of R240 million;
1.2 confirming the agreements which we had concluded with Metropolitan and mCubed respectively and authorising us to transfer the assets of the Ovation Retirement Funds to Intervest.
2 We are pleased to inform you that the curators of Common Cents and Fidentia have informed us that neither intends to appeal against the decision.
3 We are presently in the process of finalising the time table and processes required to ensure timeous payments and to mitigate the risks arising from the return of investor funds. In this regard we will be sending letters to each investor by 7 December 2009 advising what the procedures will be for each category of investor.
4 We hope to have finalised all procedures and formalities relating to the return of investments so that we can commence with the return of investments from the beginning of the New Year.
DATED AT CAPE TOWN ON THIS 5TH DAY OF NOVEMBER 2009
JOHN LEVIN BAREND PETERSEN
CURATOR CURATOR
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21st October 09
We got this reply from the Curators re the timing of the process ahead..
Dear Mr Sneddon -
You will, by now, have seen the notice on the website with regards to the judgement that was handed down on 15 October 2009. There is now a waiting period, with regards to the submission of any appeals. Only after the waiting period can the way forward be determined.
If there are any appeals, then there is some more legal leg work that will need to be dealt with.
If there are no appeals then Ovation have a way clear to commence the implementation steps for the release of assets. It is likely to take approximately 4 to 6 weeks before the first documentation will reach brokers and investors giving instruction as to how the process will work.
Yours sincerely Ovation Curators
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19th October
So the court has ruled and it appears that sanity has prevailed. In the next few weeks, the curators will start paying out funds as follows:
- Voluntary funds – investors can either opt to sell their funds and have the proceeds paid out (watch out for capital gains tax though) or they can opt to have their funds transferred to another LISP. Any funds that we transfer will be done at no initial fees and a few of the LISP’s also have reduced their annual fees to 0% on some of their offerings.
- RA’s and Preservation Funds – in terms of a deal that has been done, all the “retirement fund” money will be transferred to Intervest (Equinox) and will have to stay there for at least 3 months. After that investors may apply to the Financial Services Board to do a section 14 transfer to another administrator if they wish. This process should be relatively simple and quick (in theory) but in practise, it can take many months to complete. I will apply to do a S14 transfer of my own funds when the “holding” period is over. The reason for this is that if we have learnt one thing from this Ovation mess, it is that we cant afford to invest with “small” companies or companies with private shareholdings – even if they have been authorised and approved by the FSB.
- Living Annuities (M3) – 90% of investor’s funds in this Living Annuity were transferred to PSG Futurewealth quite a while back so there is unlikely to be much more action on this front (although there might be small amounts transferred to the LA accounts). Once again, this money has to stay at PSG Futurewealth until the curatorship is over (i.e. all the funds have been transferred and the whole mess wound up). In our experience, PSG Futurewealth have not really delivered on all that they promised upfront and so we will probably also apply to move these funds to another administrator.
- Living Annuities (Metropolitan) – this is the “dark horse” in the whole affair – my understanding is that Met have now been ordered by the court to make good any losses incurred by investors in this living annuity and funds will be transferred to an administrator run by Metropolitan. I assume that these funds will also have to stay here until the curatorship is complete and as soon as that is the case, I would apply to move money away from Metropolitan. In my opinion, they have not covered themselves in glory and have had to be forced by a court order to make good on investors losses. So here we have a “large” company that has also “behaved badly” and in my opinion, I would not invest another cent with them.
So, in summary, for anyone not invested into anything related to Common Cents, it looks as though we will get all of our money “back” – apart from the curator’s levies which we have been paying all along as well as any potential future claims on the “10%” which is being retained until the process is complete. At least it seems as though there is now finally some industry pressure to get this finalised and also to review the whole process of curatorships.
You are welcome to call us if you have any more questions.
Gregg
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16th October 2009 – this just in
TO INVESTORS AND INDEPENDENT FINANCIAL ADVISORS
APPLICATION TO HIGH COURT
TO CLOSE THE OVATION BUSINESS AND RETURN ASSETS TO INVESTORS
___________________________________________________________________________________
1. We are pleased to inform you that the High Court today granted an order in terms of the notice of motion of which you were previously given notice (subject to a few amendments of a non-material nature which were required to accommodate the concerns of a number of respondents who contacted us). A copy of the court order as granted is attached to this notice.
2. We now intend preparing for the actual release of assets (less the retention) but cannot proceed with the actual release until the period for noting an appeal has expired unless the opposing parties confirm to us that they do not intend appealing. We intend asking them what their intentions are so that we can proceed to implement the court order, if they are not appealing and
will notify investors of the decisions of the opposing parties in this regard.
3. For purposes of releasing the assets we have categorised investments as follows:
3.1 Investments in the Voluntary Investment Product;
3.2 Investments relating the Ovation Retirement Funds’;
3.3 Investments relating to Living Annuities underwritten by mCubed (ELLAs);
3.4 Investments relating to Living Annuities OLA’s and Endowments underwritten by Metropolitan Life
4. The majority of investors in the Voluntary Investment Product will have the option to encash or transfer their assets. Each investor will be informed in writing as to which category he/she falls into.
4.1 Investors who meet certain criteria will automatically receive direct payment of their assets into their verified bank account.
4.2 If an investor chooses for his/her assets to be transfered, the position is that the assets of all the clients of the particular Independent Financial Advisor who have chosen to transfer their assets will be transferred simultaneously to the nominated administrator.
4.3 For reasons of logistics these are unfortunately the only options we are able to entertain. Independent Financial Advisors, will also shortly receive a notification from Ovation regarding the process to be followed.
5. Insofar as the Ovation Retirement Funds are concerned, agreement has been reached by the curators, the trustees of the funds and Intervest, for Intervest to take over the administration of the investments of the Ovation Retirement Funds. We are presently liaising with Intervest regarding the transfer of these investments and envisage that this will take place in bulk within the next few months. Investors will be kept informed.
6. The investments relating to Living Annuities underwritten by mCubed, were transferred already to PSG Future Wealth in August 2008. Inasmuch as a 10% retention was withheld at the time of the transfer whilst the court has approved a retention of R240 million which amounts to less than 10%, we will in the near future account and transfer to PSG Future Wealth for the
difference between the 10% and the actual amount to be retained in terms of the order.
7. Following the granting of our application this morning, our agreements with Metropolitan and mCubed regarding the making good of the losses resulting from the misappropriation of funds at Ovation, on which we have reported previously, are now of full force and effect. This includes the
undertaking by Metropolitan to issue policies to those investors who had intended investing in a Metropolitan underwritten policy but whose paper work was not in order (the disappointed policy holders).
8. The investments relating to the Living Annuities and Endowments underwritten by Metropolitan, less the retention, will be transferred in bulk to Metropolitan’s new administrator, within the next few months and we will be liaising directly with Metropolitan in that regard.
9. Within a matter of days (after the time for noting an appeal has elapsed or it has been confirmed that there will be no appeal), each investor’s proportionate share of the R240 million retention will be switched from current holdings into a money market fund held within each investor’s portfolio. Investors will be able to keep track of their respective portions of the retention by reference to their individual statements as reflected on the Ovation website. Broker fees, up until encashment or transfer of investor assets, will continue to be debited to investors individual investment accounts whilst all other expenses will henceforth be debited against the retention.
10. In the meantime we will continue to pursue recoveries on behalf of investors who have suffered losses. In this regard once the Ovation business has closed down and stopped generating entries it should be possible to establish:
10.1 the extent of any unknown systemic losses or errors; and
10.2 whether Ovation Nominees has been left with any shortfall or excess, which will either be debited against the retention or credited for the benefit of those investors who have suffered losses, as the case may be;
DATED AT CAPE TOWN ON THIS 15TH DAY OF OCTOBER 2009
JOHN LEVIN BAREND PETERSEN
CURATOR CURATOR
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12th October 2009
Got this from the Mail & Guardian (14 Jul 09) – in my next life I want to be a curator!
“Although curatorship costs for the past 12 months are not publicly available, investors have paid about R44-million in special levies and there is a court order to withhold a further R240-million for future claims and costs.
From the court records that are available, the curatorship costs are staggering. The two curators, John Levin and Barend Petersen, were paid R8.3-million for the first 16 months that these companies were under curatorship. This equates to R500 000 a month being paid to the curators. Add this to the R10.6-million authorised for forensic and legal costs and investors are understandably concerned about the effect this is having on their investments and what benefits they have gained from curatorship.
Although a salary of at least R250 000 a month seems exorbitant to any investor who is paying for it, curator Levin argues in an interview with the Mail & Guardian that it is justified because 98% of his time is spent managing the curatorship of the two businesses. He says the monthly fee agreed on with the FSB has not fully compensated him for the opportunity cost of not being able to build his law practice and that once he has wound up the Ovation saga he will have to start his practice from scratch.”
Ag shame! R250000 per month does not compensate him – what planet is he from?
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8th October 2009
The wait continues…no news yet, but there are rumours that Judge Davis could hand down his ruling by 20th October. Will post here as soon as we hear.
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30th September 2009
The following questions have been sent to the MD’s of a few LISPS and Manco’s for anwers – will post the replies when we get them.
In the light of the current Ovation saga, I am keen to understand exactly what my risk as an investor is in the following scenarios. Please can you help with the following questions?
- I have always understood that in terms of the legislation in SA, when I invest into a unit trust fund, my funds are held in trust and are not part of the company assets. There are supposed to be trustees for the trust who are supposed to make sure that things are done in terms of the law and as such, unit trusts are the “safest: way to invest money (in SA). As an investor directly into a unit trust fund, where does my risk lie? Apart from risk of losing money due to market movements, where else am I exposed (or potentially exposed)? Can I lose money to fraud and if so, when?
- How does this differ if I invest into unit trusts via a LISP?
- Is this different if I make use of a unit trust retirement annuity either directly at a Manco or via a LISP?
I am keen to understand exactly where I (and my clients are potentially exposed) so that we can make them aware of these risks
Thanks for your help
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27th September 2009
I recently had a most disturbing (if not revealing) conversation with a board member of ASISA (the association for savings and investments in South Africa). But before I proceed, a bit of background and history on ASISA. The following is taken directly from the ASISA website www.asisa.co.za. (If you already know all of this then scroll down to “At the beginning of July…”)
ASISA was formed in 2008 by members of the Association of Collective Investments (ACI), the Investment 
Management Association of South Africa (IMASA), the Linked Investment Service Providers Association (LISPA) and the Life Offices’ Association (LOA). These associations have disbanded and their staff, assets and activities have been transferred to ASISA. ASISA was created to help facilitate an environment that promotes a culture of savings and investment in South Africa by unifying some of the key industries active in this space. The aim of this new single association is to:
• Work towards greater level playing fields. • Create an environment enabling of more holistic regulation. • Become more consumer focused. • Collectively engage with Government on policy issues. ASISA will work towards promoting a culture of savings and investment in South Africa by playing a significant role in the development of the social, economic and regulatory framework in which our members operate, thereby assisting members to serve their customers better.
As part of its mission ASISA aims to: • Actively promote a transformed, vibrant, and globally competitive financial sector that reflects the South African demographics. • Develop and actively participate in education, transformation and social development projects. • Continue to build a strong national economy by encouraging and incentivising South Africans to save. • Promote transparency and disclosure. • Endeavour to ensure ethical and equitable behaviour by members by applying a code of ethics and standards. • Help create a simple and efficient regulatory framework that promotes savings and investment. • Engage with Government to ensure the creation of level playing fields for all members while at the same time promoting healthy competition.
At the beginning of July this year, I wrote an article entitled “The Future of the entire unit trust industry hangs in the balance” http://www.thefinancialcoach.co.za/ovation-updates/ . In it I made the assertion that if Ovation investors lose money as a result of the Fidentia curators accessing their unit trust funds, then the unit trust industry as we know it is finished. The so-called legislative protection would have ceased to exist. About 2 weeks after the post, I received a letter from Leon Campher, head of ASISA, in which he expressed an opinion that unit holder’s funds are “safe”. When the Ovation court date was postponed again, I replied to his letter with a series of questions and statements. Almost 6 weeks have past since I wrote to him, but we have still not received any reply from him or anyone else at ASISA (for the record, Bruce Cameron from Personal Finance was copied in on the correspondence from and to Mr Campher – and he has also failed to take up any of the issues on behalf of the investors).
Back to the conversation…I asked the board member (in the light of their mission and aims to promote savings and investments in SA and to promote ethics and transparency etc) what ASISA was doing about Ovation and the fact that there are so many issues that appear not to be being addressed, either by ASISA or by the FSB.
His response was alarming! According to him, the bottom line is that ASISA exists to serve their member’s interests and they “do not care” about a little company called Ovation. At this stage I pointed out to him that as a LISP (linked investment service provider) Ovation would in fact have been a member of ASISA. I also pointed out to him that if investors could lose money from unit trust funds then unit trusts were no longer safe…and here the conversation got really scary. His responses were along the following lines:
• Where else could people invest i.e. was there anything else that was “better” than unit trust funds, banks nor insurance companies were not safe either?
• Ovation investors (and by implication anyone else invested via a LISP) were not actually invested into unit trusts…they were somehow indirectly invested into unit trusts and as a result don’t really have the protection offered to those who are invested directly (it would be interesting to hear LISPA’s views on this).
• Ovation was a small company and as a result it was not really on the ASISA agenda – by implication, ASISA did not really care about it as it is not a significant player.
• It was my fault for investing in a small and rotten company and despite the fact that unit trust companies, 
LISPS and insurance companies are legislated and regulated by the FSB we could not abdicate our responsibility and as such we are “liable” for investing into this “rotten apple”.
• At this stage I pointed out to him that Ovation was not always “rotten” and that legislation had in fact prohibited us from moving some of the money anywhere else. He had no response to this.
• He was also of the view that as financial planners and advisors we have a duty to investigate every single company where we invest and that we can not rely on the fact that they are “approved” by the FSB. He could not, however, advise on the frequency of the investigation that is needed. When I pointed out to him that this would have to be every time we invested money because a good company today could be a bad company tomorrow he had no reply.
• Ironically too, he is the CEO of a relatively new and relatively small asset management company…just like Ovation once was. His comments about size and new companies obviously do not apply to his operation.
What was overwhelmingly clear from the conversation is that Ovation has not really been on the ASISA agenda. It is too small and they are too busy protecting their own interests to spend time on this matter which is probably also a bit too “difficult” to address. The board members will get back into their Porsches, Mercs and Beemers and drive away to their security estates while the little old ladies eat cat food again! 
The little guy (investor) is probably going to get screwed again – unlucky for him!
While ASISA might well exist to protect their member’s interests, what they fail to grasp is that without financial planners and investors, they will not have members to protect. It is critical that the integrity of the unit trust industry is maintained and it is critical that ASISA start pro-actively addressing the Ovation issue (if it is not already too late). Failure to act will forever change the way that unit trusts are seen and will change the way the people invest. The future of the LISP industry is also at stake.
I will be writing to each member of the ASISA board individually to ask them for their response to the Ovation issue. If we receive any replies, I will publish them on this site.
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4th September 2009
OVATION GLOBAL INVESTMENT SERVICES (PTY) LTD
OVATION GLOBAL INVESTMENT NOMINEES (PTY) LTD
[Both companies under curatorship]
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APPLICATION TO COURT FOR RETURN OF INVESTORS’ASSETS
______________________________________________________________________
1. The matter of the application for the return of investors’ assets, and all relevant arguments, was heard today by Judge Davis.
2. Judgment has been reserved, until further notice, in order to give consideration to all matters presented.
3. We will report back once judgment is handed down.
Dated at Cape Town on 3 September 2009
JOHN LEVIN BAREND PETERSEN
Curator Curator
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3rd Sept 2009
Today is D-Day and supposedly the matter is finally before the court where hopefully they will make a ruling on the matter and will finally allow investors access to at least some of their funds…
Will put up more info as soon as we have it
Gregg
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24th August 2009
Just got an email with a 56 page attachment from the lawyers, written by the lawyers and obvioulsy intended for some other lawyers…why cant they just write in English so that all of us can understand? One thing is certain – none of the lawyers or regulators will be losing any money in this shambles…once again it will only be the individual investors that will pay the price of all the lawyers bills.
If I can make sense of the attachment I will post an update – for now it just seems like counter affidavits to the affidavits from the lawyers in response to the affidavits which were posted in response to the initial affidavits…get it?
Gregg
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17th August 2009
The following letter was sent to ASISA (5th August 09) in response to the delay in the court case…we are still waiting for a reply…
Thanks for your reply…I have been thinking about a response to this issue and the latest postponement of the Ovation court case date has now prompted me to write to you.
With reference to your letter (see below – letter from Leon Campher, ASISA):
- I would love to see the correspondence from ASISA to investors and/or the press re the Ovation issue in which investors are given some assurance that their funds are secure and that despite the appearances to the contrary, the curatorship is in fact in their best interests. I would love to see correspondence assuring the investors that ASISA is working tirelessly (with the regulators) on the issue of the curatorships to ensure that they are being conducted in an efficient, honest and transparent manner.
- I would love to know that “curatorships” as a whole are on the ASISA agenda for discussion because as they currently stand there is a massive conflict of interest for the curators. The longer they prolong the issue the more fees they earn. I have tried to take this up with the FSB and the curators but have been met with terse responses from both parties. Surely there should be much more transparency with respect to the whole process and especially with respect to the fees that they Curators are earning (this at the same time that they are still apparently earning their fees as partners of their law firms). What incentive is there for the Curators to wind this up quickly? This is after all, investor’s money that is being forked out.
- With reference to the most recent postponement – surely these are not new issues and the relevant parties must have known about these issues for quite a while – why the delay to the 11th hour? (It is easy to be cynical in situations like this – it is only the lawyers and curators who will benefit.)
- This brings me to the next issue – in an industry where ethics are in the spotlight and there are so many examples of conflicts of interest and issues of less than ethical behaviour how was it possible, that Trevor Manual’s attorney can be appointed as a curator of Fidentia. If the FSB are found to be “wanting” in any way would this ever see the light of day when the FSB are only answerable to the minister of Finance and his attorney is the Curator – surely this represents a major conflict of interest and was not the best decision in this instance?
- I think that the whole Ovation (and Fidentia) mess highlights the huge gap between the regulators and the rest of the industry. To the regulators, the money is essentially nameless and faceless. To us as Financial Planners, every rand has a name, a face and most often a family to feed. Every rand that is “lost” is significant – whether this is to fraud or the Curators fees, this has a material impact on the investor and his/her financial and emotional well being – the regulators do not, unfortunately, see this. As Financial Planners we are dependent on the regulators to police the industry and to make sure that the companies that they have licensed are indeed sound. Or are we supposed to do individual checks on each company each time we want to invest, knowing full well that the mere fact that the FSB has given approval to them to operate is not sufficient grounds for us to be able to do business with them?
- There are so many more questions that I have, such as how were Ovation allowed to offer these funds if they were not licensed to do so? What did the regulators do about it (before it was too late)? What is happening to the annual management fees that Ovation investors are paying? How was Fidentia allowed to operate – it must have been the worst kept secret in the industry that there was something rotten there? I could go on.
The bottom line for me (and my clients) is that this has gone on long enough and the only ones losing in this saga are the investors – yet again! The curators and lawyers are, as they say, laughing all the way to the bank.
The industry as a whole needs to be far more pro-active and far more vocal with respect to the issues at hand – if they are not, they risk significant damage to investor confidence – unit trust investments were supposed to be the “ultimate” investment vehicle when it comes to safety from fraud.
I look forward to your reply and would welcome the opportunity to chat through some of this over a cup of coffee.
Gregg
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6th Aug 2009 – Letter from John Kinsley (Chief Operating Officer of Prudential South Africa – Ovation did the admin for Prudential’s Living Annuities)
As you may be aware, the High Court was due to consider the latest proposal from the curators of Ovation yesterday, 4 August, 2009. This proposal was for the part-release of assets under the administration of Ovation, with the retention of a certain amount to offset any unforeseen expenses and claims until the final distribution at the conclusion of the curatorship.
At the last moment it appears that the curator of Common Cents, Mr Horton Griffiths, objected to the proposal apparently on the grounds that the Common Cents investors who invested via Ovation were not receiving the same treatment as other investors. We will not express a view on this argument at the moment, as the matter is now sub judice, although we are pleased to note the allocation of Judge Dennis Davis to hear the matter.
The entire matter has now been postponed to 3 September 2009 when Judge Davis will hear the arguments.
We are very frustrated by these ongoing delays and intend raising our concerns with the FSB directly.
Regards
John Kinsley
Chief Operating Officer
Prudential Portfolio Managers (South Africa)
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5th Aug 2009
The Ovation Curatorship saga continues…the court case that was scheduled for yesterday has been postponed yet again, this time to Sep 3 (but I wont be holding my breath).
This is unbelievably frustrating and emotionally draining (I write this as both a financial planner dealing with clients as well as an investor in Ovation).
Just so you know, we have been writing to the regulators and curators fairly often but have received fairly terse replies in most instances. We have now also written to the head of ASISA (Association of Savings and Investments South Africa) as well as to the press (Personal Finance). When (if) we get a response or if we have any more news on the Ovation saga, we will post it here so check up once a week to see if there is any news.
You are also welcome to give me a call if you have any questions.
Gregg
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Letter from ASISA CEO in response to the blog post “Future of the entire unit trust industry hangs in the balance” 3rd Jul 09
16 July 2009 
Dear Gregg
While we understand your concerns, it is regrettable that you appear to be under the impression that ASISA is in sleep mode and oblivious of the latest developments in the Fidentia/Ovation saga.
I can assure you that we at ASISA have been following these developments closely and that we are in regular contact with the FSB on issues of concern.
However, irrespective of the legal opinions expressed by the curators of Fidentia and Ovation, the unit holder assets invested on the Ovation platform are protected by law. Therefore, in terms of Cisca, this money cannot be accessed and used by any party other than the legal owners, namely the unit holders.
If Fidentia’s ill gotten gains were invested in these unit trust funds together with the money of other investors, then Fidentia’s share may be disinvested and paid back to Fidentia once the assets are released. Equally, once this happens, all other investors will also be disinvested and their assets returned to them. As you know the release of these funds had been blocked by one individual investor.
Since it is illegal to access unit holder assets held within a unit trust fund, we have no reason to believe that a court would overthrow the legal protection offered to investors.
As ASISA we have to allow the curators to follow their processes and to debate and test legalities. While we may not agree with some of the views expressed, ASISA is not a part of this process and has no right to interfere, especially since we do not see an immediate threat to investor funds. As pointed out earlier, the FSB is well aware of these developments and of our views on the matter.
If you remain concerned about this or any other issues, please feel free to contact me. I also invite you to pay a visit to the ASISA offices at your convenience so that we can provide you with an overview of issues high on our agenda. You are welcome to raise any concerns you may have.
Yours sincerely
Leon Campher
CEO ASISA
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3rd Jul 2009 “The Future of the entire unit trust industry hangs in the balance”
The latest developments in the Ovation Curatorship saga potentially have major ramifications for the entire unit trust and linked product industry and it is high time that the industry (ASISA and the FSB) woke up to that fact.
As I understand the development, the Fidentia Curators are wanting to block the application by the Ovation Curators to release investors funds from Ovation (90% at this stage with the balance to be released once the process is complete). The Fidentia Curators believe that Ovation owed Fidentia money. But Ovation has no money and so the Fidentia Curators want to claim the money from Ovation Investor’s unit trust funds. And here in is the issue.
Unit trusts have always been marketed on the grounds that investors own units in a trust fund. The money in the trust fund is just that; in a trust. It does not form part of the company’s assets. If the company goes down, the units in the trust are safe (this is a bit of an over simplification but serves the example).
Rightly so, the Ovation Curators don’t believe that the Fidentia Curators have a claim against investors’ funds – they are not and never were Ovation assets. Unfortunately for the industry, the regulators and industry bodies have been deathly silent on the whole issue – what they fail to grasp is that if the Fidentia Curators manage to convince the court that they can lay claim to investors funds (from their unit trusts) then the industry as we know (and love it) is forever changed. The whole attraction of unit trusts will be destroyed in one ruling.
It is high time that ASISA (which includes the old Association of Collective Investments as well as the Linked Investment Service Providers Association) wake up to this fact and do some public as well as behind the scenes lobbying – they can not afford not to. The future of the entire unit trust industry hangs in the balance.
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Email to the Curators and their reply – 21st June 2007
Dear Mr Sneddon – A response has been placed between the lines of your email below, for ease of reference.
Your sincerely
Ovation Curators
From: Gregg Sneddon [mailto:gregg@thefinancialcoach.co.za]
Sent: 19 June 2007 08:14 PM
To: Curators
Subject:
Hi there
Now that the final order has been granted and it looks like investors will be funding the whole process, as an investor in the Ovation RA and Preservation Funds, I would like to know what steps have been taken/are being taken to ensure that this matter in wrapped up speedily
In the first instance, as the curatorship progresses there are going to be several decision points that will need to be made. These decisions are going to be determined, by the outcomes of the reconciliations, investigations and audits that have been commenced. Each of these items are going to reveal a set of circumstances as to how this business has been managed up to it being placed in curatorship. Only at these points can the relevant decisions be made as to the next steps. Issues like the recent opposing argument, for instance, can have an influence on the time line, and there are likely to be a myriad of other events which may delay the process to closure.
so that the costs are kept to a minimum…in other words, as an investor, I would like to see some accountability for how my funds are going to be spent.
Curatorship does not come without accountability Mr Sneddon. The business continues to sustain itself from its annuity income, as can be seen in the fees that continue to be paid to you. Other costs relating to curatorship can only be determined after all the reconciliations, investigations and audits prove whether there is a REAL loss and only then can a decision be made, in conjunction with the Regulator as to who bears these costs, or where they can be reclaimed, from whom.
When can we expect to receive a time line/estimation of what still has to be done and when will the reconciliation exercise be complete (the initial expectation for this was sometime in towards the end of March if I remember correctly?) Where are you in the process?
The reconciliations are making very good progress. In fact better progress than was anticipated originally. As to a time line, we hope that the above gives you some indication of the hurdles that have to be jumped through and the amount of uncertainty that exists in the process. This is an ever unfolding process and matters can only be dealt with as they are revealed. Bear in mind that the neglect that is being seen has been many years in the making. This is NOT going to be an overnight process to correct, and whatever steps are taken must always be in the best interests of the investors in preserving value.
I look forward to a speedy reply
Gregg
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Replies from the FSB (more than a month after the initial email to them)
Dear Gregg
My apologies for not responding to you on time, this message could came in while I was on holiday and probably I could have omitted it when I went through hundreds of e-mails when I came back. Ovation is not under investigation and Fidentia does not own Ovation, I am however unable to comment on the funds with Ovation.
Manasse Malimabe – 31st Jan 2007
Dear Gregg
Kindly receive my apologies for not replying to you earlier. The information that I have on these entities is not sufficient enough to allow me to comment on your query. In have elevated your query to the Head of FAIS Supervision Department: Mrs Wendy Hattingh
My apologies once again
Kind regards
Tefo Moatshe (31st Jan 2007)
Dear Mr Sneddon,
It appears that you have not had a reply to your email of 31 January 2007. Except for the so-called Common Cents cash pool, we are not aware of any other misdirected funds arising from the Ovation platform. As far as the Common Cents issue is concerned, we successfully apply for curatorship order in October 2006 and the curator is charged with a recovery of investors funds placed in the Common Cents cash pool. The only legal connection between Fidentia and Ovation is a 25% shareholding by Fidentia in Ovation. It does not affect the clients funds placed in the control of Fidentia Asset Management which was the subject of the FSB’s investigation and resulted in the application for curatorship that was granted on Thursday last week of Fidentia Asset Management and associated companies.
Yours sincerely,
G E Anderson
DEPUTY REGISTRAR : FINANCIAL SERVICES PROVIDERS (5th Feb 2007)
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Email to the FSB – 18th Dec 2006
Hi there
Given the current investigations into Fidentia and Common Cents, should we as advisors and investors be concerned for our funds with Ovation? This is with specific reference to retirement fund money given that it is so difficult to transfer the funds to another administrator.
I would appreciate any feedback you can provide in this regard.
Kind regards
Gregg Sneddon, CFP™
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