Second Prowealth firm bankrupt

ANOTHER part of the collapsing Prowealth group of companies ended up in bankruptcy court on Friday.

Fourteen weeks after the provisional winding up of a key company in the Prowealth group, Prowealth Asset Managers, was ordered in the High Court, the same fate has befallen another subsidiary of the group. In terms of an order given in the High Court on Friday, a sister company of Prowealth Asset Managers, Prowealth Consult, is now also being provisionally wound up.The provisional winding up of Prowealth Asset Managers was made final on March 27.Like Prowealth Asset Managers, Prowealth Consult is also insolvent and unable to pay its debts, the court was informed in the case in which the holding company of the Prowealth group, Prowealth Group Holdings, applied for the winding up of Prowealth Consult.In the application for the winding up of Prowealth Asset Managers, the sole director of Prowealth Group Holdings, lawyer Soleil Prollius, informed the court that Prowealth Asset Managers’ liabilities were exceeding its assets by more than N$19 million.In the application for the winding up of Prowealth Consult, Prollius similarly informed the court that this company’s liabilities were exceeding its assets by more than N$17,3 million.Prollius was appointed as a director of Prowealth Group Holdings as a result of her appointment as the executrix in the estate of the founder and Chief Executive Officer of the Prowealth group, the late Riaan Potgieter.The 39-year-old Potgieter committed suicide by shooting himself in his home in Windhoek on December 8 last year.It has since emerged that Prowealth Asset Managers is unable to pay back millions of Namibia dollars to investors who had chosen the company to handle the investment of money on their behalf.In an affidavit filed with the High Court, liquidator Alwyn van Straten, who has been put in charge of the winding up of Prowealth Asset Managers, has now claimed that the various companies and close corporations established by Potgieter were all part of ‘a fraudulent scheme’ devised by Potgieter. In this scheme, about N$79,9 million in trust monies received from Prowealth Asset Managers’ clients ‘were unlawfully and intentionally misappropriated’ by Potgieter and companies and close corporations in which he had an interest, Van Straten is alleging.He has also stated in his affidavit that an investigation of Prowealth Asset Managers’ finances has so far shown that, out of more than N$103 million that the company received from investors from October 2003 to May 2008, Potgieter transferred at least N$20 million to bank accounts held in his own name.Potgieter also transferred more than N$18,36 million from the bank account of Prowealth Asset Managers, into which investors’ money was paid, to an account of Prowealth Consult, of which he was also the sole director. From Prowealth Consult’s account, Potgieter in turn transferred more than N$2,98 million to four of his own bank accounts, Van Staten has stated in his affidavit.In the application for the winding up of Prowealth Consult, Prollius informed the court that Potgieter had been the company’s primary source of business ‘on the strength of a client base which he had built up over a number of years’. Since Potgieter’s death, though, Prowealth Consult’s business has come to a virtual standstill, Prollius stated.'(Prowealth Consult) is insolvent in that its liabilities exceed its assets by N$17 335 530,’ Prollius declared.She related that the company owed Prowealth Asset Managers more than N$14,23 million.According to the Prowealth Consult’s annual financial statements for the year ended February 29 2008, which have also been filed with the court, the company lost more than N$8,42 million in that year. The previous year, it had lost more than N$2,7 million.The financial statements also indicate that the two largest loans on Prowealth Consult’s books were a loan of N$14,23 million from Prowealth Asset Managers and a loan of N$4,94 million from Potgieter.Prowealth Consult’s main business was stated to be ‘consulting and administrative services’.