South African Ponzi Victims Hear From Rescue Specialist

Aug 31 2012 | 11:52am ET

Victims of an alleged South African hedge fund fraudster met for the first time yesterday to hear their prospects for a recovery. The did not learn much.

Speaking to about 150 investors who had bought preference shares in an unlisted company, SA Superalloys, from Herman Pretorious, rescue specialist Hans Klopper simply sought to reassure the assembled—and to ask for more time to create a rescue plan, which is legally due next month, MoneyWeb reports.

"I can categorically tell you a September deadline is not obtainable," Klopper said. "When the law created a three-month deadline for the preparation of a rescue plan it had in mind a fish and chip shop or a panel-beater. This is a large and complex business," connected to 30 or 40 other businesses linked to Baselius, the private equity firm run by Pretorious' former business partner, Julian Williams.

Pretorious killed Williams and himself last month. The murder-suicide was apparently prompted by a visit to Pretorious from South Africa's Financial Services Board, which believes that Pretorious' Relative Value Arbitrage Fund was a massive Ponzi scheme that may have cost investors three billion rand (US$355 million).

Many of Pretorious' Superalloys investors also had money in RVAF and another listed company led by Williams, Wesizwe Platinum.

Klopper told investors that it was too soon to tell how much money might be left for them. But he sought to give them some hope, arguing that pursuing a rescue rather than a liquidation raises "a good possibility of putting something on the table that will leave investors in a better position."

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