Prowealth payout stopped

THE former wife of the founder of the Prowealth group of companies, Riaan Potgieter, will have to make do, for now, without millions of Namibia dollars she stands to receive from insurance policies on Potgieter’s life.

The proceeds from five policies on Potgieter’s life should not be paid out to Potgieter’s former wife, Louise Potgieter, at this stage, Acting Judge Theo Frank ordered in the High Court in Windhoek on Friday.Policy proceeds totalling some N$15,6 million were to be paid to Mrs Potgieter after her former husband’s apparent suicide in Windhoek on December 8 last year.At the same time, people who have invested money through one of the key companies in the Prowealth group, Prowealth Asset Managers, could face huge losses after the company was declared bankrupt earlier this year. A subsequent investigation of Prowealth Asset Managers’ finances has revealed massive theft of investors’ money by Potgieter and the company, of which he was the sole shareholder.According to a report compiled by auditing firm Grand Namibia, the company stole N$49 million from investors. This money was used to pay the expenses of Potgieter and other companies in which he had a stake, according to an audit report that has been filed with the High Court.The audit report was requested by the Namibia Financial Institutions Supervisory Authority (Namfisa) to do an investigation of Prowealth Asset Managers’ financial affairs.The firm also reported that more than N$22,4 million that appears to have been investors’ money was deposited into Potgieter’s personal bank accounts. The firm further concluded that one of the things that this money was used for was to pay premiums amounting to N$983 038 on insurance policies on Potgieter’s life.Investors have now submitted claims totalling more than N$74,7 million to the liquidator who has been put in charge of Prowealth Asset Managers.Liquidator Alwyn van Straten asked the High Court in early June to stop the payment of the proceeds on Potgieter’s life insurance to his former wife while Van Straten holds an interrogation in terms of the Insolvency Act into the affairs of Prowealth Asset Managers. Van Straten is also planning to hold Potgieter’s personal estate liable for the debts of Prowealth Asset Managers.After starting the legal action to stop the policy proceeds from being paid to Mrs Potgieter, Van Straten however reached an agreement with lawyers representing Mrs Potgieter that would have resulted in four of the policies being paid out to her lawyer.The proceeds from these policies would also total over N$15,6 million.It was further agreed that Mrs Potgieter’s lawyer, Francois Erasmus, would deposit some N$1,358 million into an investment account on behalf of Mrs Potgieter. This money would have been made up of the premiums that were paid on three of the policies, as well as half of the proceeds from another of the policies.Van Straten would have had to agree that the money could be withdrawn from that investment account, or a court order directing the withdrawal would have had to be given, before the money was to be withdrawn, it was agreed in the deal reached between Van Straten and Mrs Potgieter’s legal team.Namfisa, which never detected Prowealth’s and Potgieter’s embezzlement of investors’ money while Potgieter was alive, however objected to the implementation of that agreement. On Friday it succeeded in stopping the agreement from being carried out.In his ruling, Acting Judge Frank said that in his view a case has been made out to show that, on the evidence as it stands now, the agreement is contrary to provisions of the Prevention of Organised Crime Act, which came into operation on May 5 this year.That being so, he does not see his way open to sanctioning the agreement reached between Mrs Potgieter and the liquidator, Acting Judge Frank said.South African senior counsel Vincent Maleka, instructed by Dirk Conradie, represented Namfisa in the case before Acting Judge Frank. Raymond Heathcote, instructed by Erasmus, represented Mrs Potgieter, while Reinhard Tötemeyer and Jesse Schickerling, instructed by the firm Engling, Stritter & Partners, represented Van Straten.