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The Belvedere Ponzi story is taking all kinds of twists and turns. Today I got the opportunity to put some tough questions to one of the involved parties, deVere Africa’s head Greg Stockton. He hardly flinched when explaining how deVere’s SA clients had around R50m tied up in Belvedere because a) it was in only one of more than 120 funds that the Mauritius-based firm runs; and b) that’s not overly large compared with client inflows of between R800m and R1bn a year. He also took a matter of fact approach to deVere teaming up with investigative journalist David Marchant to expose apparent Ponzi kingpins Cobus Kellermann and David Cosgrove. Shortly after this interview I got a call from Werksman’s Johan Theron who said he had Kellermann and Cosgrove in his office and they were ready to answer any question I wanted to ask. After first considering it, they decided against accepting my request for a recorded telephonic conversation. But Theron encouraged me to accept an unrefusable offer – to email a list of questions (which I did, it’s long) as his clients want to clear the air and “make this thing go away.” It promises to be a very interesting 24 hours now that Kellermann (and Cosgrove) haven’t scarpered to Australia after all. As an appetiser, here’s our tailor-made short video with Stockton and a transcript of the longer one I did for CNBC Africa today. – AH
Greg Stockton is the head of deVere Africa which he joined in mid 2014. The CNBC Africa interview began with a series of questions to establish the scale of the company in SA and internationally. Alec Hogg asked him for a description…..
We’re the largest international wealth management firm in South Africa, so we’re a big player in the market, for sure.
Roughly, what kind of income streams?
Well, we invest (for clients) anywhere in the region of between $80m to $100m per annum.
How big is deVere globally?
Globally, we have about $10bn assets under management administration, about 70 offices around the world in most (obviously) ex-pat destinations.
So it’s a sizeable organisation. It’s also a very strongly marketing-driven organisation. You have an unusual policy of not actual paying basic salaries to your salespeople, but paying them a commission. Is that in line with what you do elsewhere in the world?
Yes, in most places we pay commissions. Obviously, there are some places where we have to legally pay basic salaries to make sure we fall in line with local legislation. Obviously, I’m sure you can appreciate that every country has different rules and regulations. They differ from country to country.
But it does give an incentive for salespeople to put the funds where the commissions are highest. You do have a relationship with the so-called Ponzi king, Cobus Kellermann. Just tell us what that association is.
Cobus approached deVere around 2007 with Belvedere, to talk about Strategic Growth Fund. At the time, we looked at the Fund. It ticked many of the boxes in terms of the fact that it was a multi-asset class portfolio, invested into a range of different collective schemes. It was a medium to balanced approach to investments, which is what most of our clients tend to have in a portfolio. Based on looking at the Fund, we decided to take it on and market.
That’s under U.A.M.’s banner, correct?
That was the marketing company behind it, yes.
Your Chief Executive Nigel Green is quoted all over the Internet as having actually owned this company (U.A.M.) – the funds that you’ve just spoken about. Is that accurate?
It depends on where you got that information – from which source. I’m not sure. I can’t really comment on that, unfortunately. The only comment on that Alec, is that Nigel and deVere have absolutely zero control of the day-to-day management of that Fund.
He owned it – that’s from very reputable sources around the Internet – sold it in 2012, but Cobus Kellermann was the Fund Manager. How much money did you put, of your clients, into these Strategic Growth Fund investments?
Are you talking globally or in Africa?
Globally, we have about $30m in the Fund and in Africa, we have round about £3m.
So about R50m. That’s quite a lot of money for clients in this country, given that you do between 80 and 100-million per year in cash flows. What kind of likelihood is there that you will get this money back?
Firstly, it’s actually not a lot of money if you compare it to doing 100-million per year over a three-year period, and collectively, in Africa we have about three million so it’s actually very small. Again, with regards to getting client money back: I’m sure you’ve read the reports. It’s something that we’re working on tirelessly. We’ve employed a lawyer (Colin Barr). We’ve obviously been working recently with David Marchant, who’s a very well respected investigative journalist to try and do whatever we can to recover client money. Again, it’s something that we want to do, as well as the clients.
David Marchant is the man who broke this whole story about Cobus Kellermann. Were you instrumental in getting him to make that exposé?
Yes, that’s correct. As I’ve said, the CEO Nigel Green and the company have been working very hard in helping whichever way we can with the investigation. Nigel and deVere have been feeding as much information to David as possible in helping out wherever we can.
You have however, been dealing with Cobus Kellermann (as you said at the opening of this interview) since 2007. Tell us a bit about him. Is he the kind of person who is easy to trust?
I didn’t actually know Cobus personally. I’m not sure what you know about my background, but I recently moved in to the region in May of last year, so I don’t have any personal dealings with Cobus. However, everybody that I do talk to suggests that his CV reads very well, that he’s a polite gentleman, and that his background in Fund Management is extremely good. I don’t have any personal involvement with him. My previous Regional Manager did but again, I can’t really comment on a personal level.
Well, if you have been working with David Marchant, you clearly do know what Cobus Kellermann has been up to despite his rather impressive CV. Just by way of what you’d be telling your clients on this score, what is that you understand he’s been doing?
If you look at the overall position, we believe there’s potentially $16bn to $18bn worth of funds as part of the scheme (allegedly over about 120 different funds), which are being tracked with the paper trails being run daily by David. When you look at it from that perspective, 120 funds (allegedly) and $18bn, deVere has one fund and $30m, so we’re actually a very small case in what seems to be a very big one. It’s probably about point-one-six percent, if you work it out.
And your one fund: what has happened to the money that was put into that fund?
Well, some of the money was made liquid for the investors approximately 18 months ago, so most of that money has been reinvested. For the money that’s still left there, it’s something that we’re working hard on trying to track and find out exactly where the money has gone and how easily and quickly it would be to recover for the clients. We’re obviously trying to do everything we can on behalf of the clients.
Do you have any insight into where it was invested?
Other than the media, I know this conversation’s about various different companies in South Africa… Whether that money is still there or not, remains a question. Again, it’s something we’re working on trying to find out.
Shortly after the interview ended, Alec Hogg received this email from deVere’s head of Public Relations, George Prior. He wanted to “clarify a couple of points”. Here is his letter:
For the avoidance of doubt, SGF was not owned by Nigel Green or deVere. Nor was any advice taken from Nigel Green or deVere offer any advice with regard to the control, management and supervision of the SGF.
Nigel Green could not be described as “very close” to Cobus Kellermann. He has spoken to him at best three, maybe four times in his life. It was misleading to suggest or imply otherwise in your question in the interview with David Marchant.
There is not an ‘anagram connection’ between deVere and Belvedere. It is completely misleading and inaccurate to suggest or imply otherwise.
All our clients who had invested into Strategic Growth Fund have been sent an email keeping them abreast of the developments, how we are helping to bring this case to close, and how they should contact us directly should they have any queries.
We understand that positive progress is being made on this issue in an attempt to recover lost value.
Our clients and deVere have been badly let down by the administrators and fund managers in this instance, and we will continue to use our resources and best endeavours to help bring this situation to a satisfactory close for our clients.
We are also working with Cayman-based lawyers who are proven experts in asset recoveries.
Similarly, we continue working alongside lawyers in Guernsey, where the fund was based, as well as lawyers and regulators in South Africa, Guernsey and Mauritius.
Indeed, it is only because of the lawyers in Mauritius with whom we are working passing on our evidence to the regulator there that official warnings were issued. Similarly, our Guernsey lawyers have provided evidence to the regulator there also.
* Click here to read the “back story” and access links to all the Biznews.com coverage of the Belvedere saga.
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