The chairman of JSE- and London-listed Dimension Data is not commenting on reports that he benefited from a Ponzi scheme.
Last year, news emerged that Barry Tannenbaum had fleeced captains of industry of as much as R12.5 billion through a pyramid scheme, in what was SA's largest Ponzi scheme to date.
A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money, or money paid by subsequent investors rather than from any actual profit earned. At least two executives of JSE-listed ICT companies are reported to have invested in the scheme.
Tannenbaum, who escaped to Australia, enticed investors to finance the purchase of medical ingredients, which he claimed medical companies, such as Adcock Ingram and Aspen, would buy at a big mark-up. He promised investors interest rates of up to 219% a year.
However, few investors were paid out, with the only returns being paid from new investments. As a result, no real returns were ever realised.
Winners?
Yesterday, the Business Times reported that Dimension Data chairman Jeremy Ord “cashed-out” before the scheme unravelled, and earned returns of 40%. Noseweek previously reported Ord was paid out R8.5 million, in August 2008, and seems to have gained R25 million in total.
The Business Times says e-mails and spreadsheets in its possession show Ord left the scheme while he was ahead, which contradicts his earlier denials about being involved.
First Technology CEO Arnold Sharp has previously been accused by the Sunday Times of befitting from the scam.
The paper reported last year that two companies of which Sharp is a director - Berniebee Investments and First Technology - were paid R792 million by the scheme. Sharp denied the allegations, calling them “nonsense”.
Warren Goldblatt, head of private law enforcement agency Specialised Services Group, which represents one of the investors, says he has heard the investigation into the matter has been wrapped up by KPMG. However, the results of the probe are not yet known.
Last year, the South African Reserve Bank, the police, the Financial Intelligence Centre and the South African Revenue Service mandated KPMG to conduct a forensic investigation.
Related story:
First Tech CEO denies Ponzi windfall
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