The FSCA has requested all investors whose funds were invested with BHI Trust to help it identify the authorised financial services providers that advised or assisted them to invest in BHI Trust products.
Craig Warriner, the fund manager and a trustee of BHI Trust, handed himself over to the authorities in early October. He allegedly admitted to using the trust’s funds in a highly irresponsible manner.
Shortly after the scandal broke, the FSCA confirmed it was investigating the activities of the trust and the possibility that it was conducting unauthorised FSP business and unauthorised collective investment scheme (CIS) business. At the time, the FSCA confirmed that none of the parties under investigation was authorised as an FSP or licensed as a CIS manager.
On 7 December, the Authority confirmed that the investigation was continuing, with an expanded scope focused on authorised FSPs.
“The FSCA is currently compiling a complete list of authorised FSPs who may have advised or assisted their clients to invest in BHI Trust products. This initiative is an important step in understanding the full extent of the situation and ensuring appropriate regulatory actions,” the Authority said.
Investors who “know or suspect” that their funds were invested with BHI Trust via their financial adviser are asked to send an email to Enforcement-Complaints@fsca.co.za with the subject “BHI Trust Investor”.
“In this email, investors must include any relevant details that could assist the FSCA in this investigation, such as the name of the financial adviser, dates of transactions, and any other pertinent information,” the Authority said.
Liquidation order granted
On 25 October, the trust was placed under provisional sequestration by the High Court in Johannesburg. The Master of the High Court appointed Gert de Wet and Sumaya Mohamed of Kaap-Vaal Trust as the joint provisional trustees (JPTs) on 30 October.
A provisional court order for the liquidation of BHI Holdings (Pty) Ltd was granted on 14 November.
According to a circular from the JPTs to creditors posted on 30 November, the cause of action was for more than R58 million due to the BHI Trust by BHI Holdings (Pty) Ltd over about five years.
Warriner, who is the subject of investigations by the National Prosecuting Authority (NPA) and the FSCA, is being held in police custody, with his case having been postponed to March. The 60-year-old briefly appeared in the Palm Ridge Commercial Crimes Court on 18 October and again on 29 November. He did not apply for bail at either court appearance.
News24 reported that, according to the State’s charge sheet, Warriner has confessed to having defrauded about 220 people of an estimated R1.18 billion in a pyramid scheme that started in January 2013 before it collapsed in August 2023.
The JPTs indicated they had briefly interviewed Warriner at his court appearance, and they were endeavouring to arrange further discussions with him. An interview was also held with Christian Ashcroft, the second trustee of BHI Trust, on 8 November, with further engagements set to take place.
According to BizNews, Ashcroft was one of the original complainants about Warriner. Ashcroft claims to have been deceived and has sought legal advice from attorney Caitlin Gottschalk.
In the meantime, the Master of the High Court has authorised an inquiry in terms of section 152 of the Insolvency Act.
According to the JPTs, “numerous” subpoenas have been issued for various parties involved with BHI Trust to supply information, documentation, and testimonies on the financial affairs of the trust.
The inquiry will be held in camara “to maximise the potential recovery of funds for the benefit of the investors but not to hide any aspect of the proceedings from any affected party”.
The JPTs’ attorneys of record confirmed that various individuals have been served with subpoenas to appear before the Master of the High Court Johannesburg, sitting between 6 and 8 December, to be questioned about the affairs of the sequestrated trust.
In addition, the JPTs stated that they have had consultations with the NPA and the FSCA “where meaningful information has been shared”.
“The JPTs will continue to work in tandem with the authorities with the ongoing civil investigations to endeavour to trace and retrieve the misappropriated funds.”
Investors and creditors are invited to provide the provision trustees with any factual information that could assist the JPTs with the recovery of funds. Information provided will remain confidential. Email firstname.lastname@example.org.