Talk about a conflict of interest…
I have written quite a bit about the fiasco that was Ovation Investment Services, a linked investment service provider (LISP) that was put into curatorship as a result of its links with Fidentia. Well that was more than 3 years ago now and still there is no end in sight to the curatorship – at least not according to the curators… “As for the last question posed in your email, at this point in time, it is impossible to guess how long the curatorship will last. The Ovation business is in the process of being wound down, which will significantly reduce costs and therefore reduce the levy required to be deducted from the retention. There is still some litigation currently in process and there is still more litigation, which has not yet commenced. This may take some years before this can be closed out.”
There is talk that curators have been earning in excess of R250000 per month (each) and when you are earning this kind of money and there is no end date to the contract, it poses a massive potential conflict of interest.
To quote Allan Greenblo in the Business Report (Aug 2008)…”Put simply, attorney John Levin and accountant Barend Petersen are paid at hourly professional rates. The curators’ second report to the court on Ovation, for the six months to last August, showed their fees for the period came to R3.45 million, or R287 000 a month for each of them…Even these curators, with the best will in the world, might find it difficult to devote all their attention throughout every working day to Ovation and nothing else. Levin is a consultant in a large law practice and Petersen is a director of several companies, including De Beers, where he owns a slice of its empowerment entity.”
As at July 2009 the total cost of the Ovation Curatorship was more than R15million (that is for just over 2 years work) – it is nigh impossible to get the current figures but based on my calculations, at the rate the fees are being deducted from the “curator’s retention” money market account (±5.8% of each investor’s funds), there is enough money for the curatorship to last at least another ±3.5 years…and this is consistent with the email reply from the curators where they say it may still take some years to finalise…Roll on 2014!
But then again, when you are earning +R250000 per month why would you be in a rush to end the process? And they say that there is no conflict of interest here?