Cape Town - Since Offshore Alert exposed the Belvedere Group as an alleged Ponzi scheme in March 2015, it has collapsed in many different jurisdictions.
That is according to Offshore Alert editor David Marchant, who said that in Mauritius, eight companies linked to the group run by Capetonian Cobus Kellermann had been closed down by the local regulator.
He was speaking exclusively this week to BizNews publisher Alec Hogg, who broke the story in South Africa.
Read the full interview or listen to the podcast here.
“In Guernsey, three hedge fund companies have been closed down by the local regulator,” said Marchant. “In the Cayman Islands, one hedge fund company has been closed down.
“In Gibraltar, a company is in liquidation and more recently, in Anguilla in the Caribbean a company owned by one of Belvedere’s administrators had regulatory action taken against it.
“I’ve been doing this for so long. When Offshore Alert exposes something it typically, quickly collapses and the Belvedere Group has followed suit.”
Not all gone
Marchant said the operation hadn’t entirely been brought to a standstill.
“There are scraps here and there,” he said. “I was actually reading the financial statement that’s just been filed in England by one of Belvedere’s British companies that’s hanging on by its fingertips, so there are strands. This was so big. It had so many tentacles that it’s quite difficult to close everything down.
“This was a truly international group that was in part, run from South Africa,” he said. “It’s inconceivable to me that there were not South African investors.”
He said that the amounts that are known to be lost total about R4bn and is probably a fraction of the true total. “The amount of money that has already been established as having gone in and gone out is substantial,” he said.
“Clearly, within that, there are going to be South African victims without a doubt,” he said. “Some of them may have invested in their own name or they may have invested through an offshore company.”
SA has a lot to answer for
He said that Kellerman owned 50% of Belvedere and co-owned that with David Cosgrove who’s an Irish national, but a resident in South Africa.
“There’s a significant South African involvement here, but it’s an international scandal,” he said. “Anything involving a lot of money is typically international – anything of this size.
“South Africa certainly has to bear part of the spotlight over this,” he said.
Marchant said SA’s Financial Services Board (FSB) was not taking enough action. “I can’t really see any evidence that the regulators in South Africa are doing anything unless I’m missing it,” he said.
“The regulators like to shroud everything in secrecy so typically, when they do investigations they produce reports,” he said. “Those reports tend to stay private unless they’re leaked, so the investing public doesn’t really know who’s been accused of what, what evidence there is against somebody, and who they should be avoiding in the future and it lets them just move on to new schemes.
“The reason why these regulatory reports are kept secret is really, for liability purposes,” said Marchant. “Regulators don’t want to be sued.
“This is where Offshore Alert is different to other organisations. I don’t care about being sued,” he said.
The FSB said in March that it had been helping two authorities with investigations into Kellermann.
“We have been liaising and helping the two authorities [Mauritian Financial Services Commission and the Guernsey Financial Commission] with the investigations [into Kellermann and his associated entities and persons],” the FSB said in a statement on March 27.
It said it "has also engaged Mr Kellermann, and will take regulatory action it deems necessary at the conclusion of these investigations".
“Such regulatory action could include the withdrawal of the licenses of the various entities where he is currently appointed as a key individual, director and representative.
“In addition to any criminal prosecution, Mr Kellermann could also be debarred from the financial services industry.”
How to stay clear of Ponzi schemes
Marchant’s message to people who don’t want to be caught in a Ponzi scheme:
“It doesn’t matter how persuasive the salesperson speaking to you is,” he said. “It doesn’t matter how glossy the paper is in the promotional brochure.
“It doesn’t matter what else is written in that brochure.
“Fast-forward to the paragraph called ‘performance chart’, take a look at it and if it’s a diagonal line trending upward with little or no variation, just say ‘thank you very much but I’m not interested’.”