Clients that invested at the advice of financial advisor and Stringfellow Group CEO Thomas Stringfellow may have lost up to R100m, according to the Finance Sector Conduct Authority.
Stringfellow turned himself in to the police at Honeydew Police Station in Johannesburg following investigations by both the police and the FSCA into his conduct when he raised funds from Stringfellow Group's clients to invest in women’s sportswear business, Lorna Jane, which he ran with his wife Leigh.
FSCA head of investigations Gerhard van Deventer told Fin24 that the Authority and the police were conducting investigations into Stringfellow's conduct at the time of the arrest.
"From our side, we are investigating allegation of misconduct relating to client funds. It seems possible that there are large amounts of money missing and clients will lose substantial amounts, if there is an indication of fraud and misconduct," said Deventer.
"We are still investigating, but it is possible that the amounts lost could run up to a hundred million [rand] or more," he added.
Deventer told Fin24 that, to the knowledge of the FSCA, Stringfellow remained in police custody since turning himself in on Thursday morning.
"He was arrested yesterday and we are working with the police in this investigation. I have not heard anything about him being released on bail and I suspect that bail would be refused because he is a British citizen," Deventer said.
Deventer said that the FSCA investigation continues and that there was no cause to suspect wrongdoing on the part of Lorna Jane in the matter.
The Hawks could not immediately comment on the matter.