Prowealth pyramid starts to crumble

INVESTORS who fear they lost millions of Namibia dollars that was supposed to be invested on their behalf by asset management company Prowealth Asset Managers have started taking legal action in an effort to recover their money.

Two default judgements have now been granted against Prowealth Asset Managers by the Registrar of the High Court.Windhoek architect and former National Assembly member Hans-Erik Staby and his wife, Erika Staby, obtained a default judgement for the payment of N$1 501 117,54 against Prowealth. Another judgement was granted against the company in favour of Windhoek residents Volker and Barbara Winterfeldt, who were claiming a total of N$414 577,95 from Prowealth.On March 27, the High Court ordered that Prowealth Asset Managers should be liquidated. The liquidation was requested by the company’s holding company, Prowealth Group Holdings, in the wake of the apparent suicide of the founder of the Prowealth group, Riaan Potgieter (39), in Windhoek on December 8 last year.In an affidavit setting out the grounds for the liquidation application, lawyer Soleil Prollius, the executor of Potgieter’s estate, informed the court that Prowealth Asset Managers was insolvent and unable to pay its debts. She also stated that from information obtained from records of the company, it appeared that substantial amounts of money invested on behalf of clients were not traceable.According to records kept at the High Court, eight claims for the repayment of money invested with Prowealth Asset Managers or lent to the company have been filed with the court so far.So far only the Stabys and Winterfeldts have proceeded to obtain default judgements against the company.According to documents filed with the court, Prowealth reported to the Winterfeldts on September 5 2007 that the value of their investment portfolio being handled by Prowealth was N$153 635,92 at that stage. By March 5 last year, Potgieter addressed a letter to Mr Winterfeldt in which he acknowledged the receipt of an additional N$260 000 from Winterfeldt.These two amounts, as well as legal costs of N$942,03, are what the Winterfeldts are now claiming back from Prowealth.The court was also informed that the Stabys had a verbal agreement with Prowealth in 2003 that they would give money to the company to invest on their behalf.The money was supposed to be invested with Sanlam.Between 2003 and 2008 the Stabys then paid various sums of money to Prowealth to be invested, the court was informed. According to the last statements that they received from Prowealth at the end of September last year, their investments were worth N$1 501 117,54 at that stage, they claimed.In December, however, they discovered that their money had been withdrawn from the Sanlam Glacier investment product, in which it had initially been invested. Instead of being invested in other Sanlam products, their money was invested in Prowealth’s own business products and Prowealth was not able to give an account of the whereabouts of the funds, the court was informed.