The former chief executive of the Transport Education and Training Authority (TETA), Pieter Hendrick Bothma, was this week sentenced to an effective seven years in prison for fraud, corruption, and money laundering related to the Fidentia scandal.
Charges against the 64-year-old stem from the investment of more than R200 million of TETA’s funds with Fidentia Asset Management (Pty) Ltd (FAM) between 2003 and 2005. On request, only R15m was returned to TETA in September 2003, the National Prosecuting Authority (NPA) said in a statement on Monday.
TETA was one of FAM’s two big clients. The other was the Mineworkers Provident Fund, which placed R1.2 billion under its management.
Senior State Advocate Thersia du Toit-Smit led evidence that Bothma falsely and with intent to defraud instructed PLJ Asset Holdings (Pty) Ltd to move two promissory notes held on behalf of TETA to Maddock Inc and signed a non-discretionary mandate with FAM authorising the investment of the promissory notes.
Maddock Inc were the auditors for FAM and Fidentia Holdings from October 2003 to April 2006. Graham Maddock, who founded Maddock Inc in 2002, later became a Fidentia director.
Bothma failed to disclose to TETA’s board on 24 April 2003 that the mandate with FAM had been signed two weeks previously.
He also failed to disclose to the board that the promissory notes had been sent to Maddock Inc on the day on which the mandate had been signed (10 April 2003) and instructed FAM to sell one of the promissory notes before the maturity date.
He did not inform the board that he had authorised the sale of one of the promissory notes and the investment of a further R50m with FAM and instructed that the funds be transferred to Maddock Inc.
He reinvested the funds with FAM without disclosing this to TETA’s board and authorised the investment of a further R50m with FAM in April 2004 and instructed that the funds be transferred to Maddock Inc on 16 April 2004.
He authorised the re-investment of the promissory notes and R100m in cash with FAM every year. His actions and failure to disclose the true position induced TETA and the board to act to the actual or potential prejudice of TETA.
Bothma was paid a bribe of R4.2m by Steven William Goodwin and R1.9m by Fidentia head J Arther Brown to move the funds from PLJ and invest them with FAM. The bribes were disguised as commission payments and then as a sale of shares in a shell company that had no assets.
In April 2009, Goodwin was sentenced to 50 years’ imprisonment on 36 counts involving fraud, corruption, and money laundering involving about R93m. In terms of a plea agreement, Goodwin the sentence was effectively 10 years.
“The corrupt relationship between Goodwin, Brown, and the accused ensured that Fidentia Asset Management had access to liquid funds to purchase the buildings in Century City, luxury cars for directors of the company – Rudi Bam, Maddock, Brown, and others – and purchase the beachfront property Brown lived in. Bothma laundered the monies he received through the accounts of various individuals and entities to disguise the true nature of the fund, while he knew that the funds were the proceeds of unlawful activities,” the NPA said.
On Monday, the Palmridge Commercial Crimes Court sentenced Bothma to seven years’ imprisonment for fraud, 14 years for two counts of corruption, and seven years for money laundering. The sentences will run concurrently.
The State successfully opposed an application by the defence for leave to appeal the conviction and the sentence.
The defence then advised the court that it would file a petition with the High Court for leave to appeal the conviction and sentence and wished to bring an application for bail pending the petition. The court asked the defence to file the petition first and said it would not hear an application for bail pending the petition.
