Investors who lost their life savings in the R2.7 billion BHI Trust Ponzi scheme plan to launch a private prosecution and civil suit against fraud accused Michael Haldane if the state fails to prosecute him, a source close to the matter said.
Investors raised concern that the case against the Global and Local former director, who is expected to appear in court in March to face charges of fraud and money laundering for his alleged involvement in the scheme, might be dismissed or that the state won’t be ready to proceed to trial.
They said the Directorate for Priority Crime Investigation (the Hawks) has not contacted them as victims and that the police seemed to have closed several cases they had opened against Haldane.
Haldane was arrested with co-accused Sona Pillay in connection with the Ponzi scheme in June last year after BHI Trust trustee Craig Warriner was convicted of fraud and sentenced in May to an effective 25 years in prison. Haldane and Pillay were granted bail of R100 000 each in the Palm Ridge magistrate’s court.
Warriner had pleaded guilty to 206 counts of fraud and one of contravening the Financial Advisory and Intermediary Services Act for operating an investment scheme without a licence or being registered as a financial services provider.
His co-trustee, Christian Ashcroft, opened a case against Warriner after he lost money in the scheme and investors started asking questions. The scheme finally collapsed in October 2023.
The Financial Services Conduct Authority (FSCA) debarred Warriner and Haldane for 30 years, along with Global & Local associate Mauro Forlin, on 3 October 2024.
At Haldane and Pillay’s last court appearance in June, the matter was postponed for further investigation. The source, who spoke to the Mail & Guardian on condition of anonymity, said investors feared the National Prosecuting Authority might not be ready to proceed to trial because many who laid complaints have not been contacted by the NPA.
NPA spokesperson Phindi Mjonondwane this week denied this, blaming the investors for not providing requested information.
The source said steps were being taken to seek private prosecution and civil action if the NPA withdrew the case against Haldane. He said pensioners had especially been affected by the loss of their life savings and investors were frustrated by how long the matter was taking to be heard in court.
“Investors feel that their cases are being closed and that they see no prospects of success here, or that the NPA is not going to prosecute,” he said.
“But this is not the end of the road. If the state fails to prosecute for whatever reason, there are other avenues in terms of private prosecution that will most definitely be pursued.”
He said a private prosecutor had not yet been identified but several investors had grouped together to pursue legal action.
Forensic investigator Bart Henderson has been assisting 200 investors with the matter. He opened a case against Haldane at the Sandton police station in October 2023.
Henderson said he sent an “urgent tip-off and a complaint email” in November 2023 to Sandton station commander Brigadier Egen Moodley regarding the handling of the case and alerting him that he has piles of evidence.
But the police have not contacted him. This is despite Hawks spokesperson Brigadier Thandi Mbambo telling the M&G at the time that “the one [fraud case] opened in Sandton … will be an additional charge to the main charge”.
“I’m not holding my breath. I don’t think the NPA has much appetite for the case, or the SAPS [South African Police Service]. Do I think the authorities are trying to investigate the case? I think the authorities are trying not to investigate the case,” Henderson said.
“Perhaps it’s too complex and there’s an element of fear of failure. They can always prove me wrong. But their position seems to be there is no evidence of a crime by Haldane yet and the case warrants much further investigation, despite Haldane receiving a 30-year disbarment by the FSCA and Warriner’s testimony.”
He said the case against Pillay is “extremely strong”.
“Nobody knows what’s happened to the dozens of original criminal complaints lodged, including mine, but I believe they were all closed when Warriner was convicted,” Henderson said.
“This scheme was not just a simple Ponzi scheme, but part of a wider criminal enterprise that formed the BHI Trust Ponzi, and a cause of action involving local and international legal entities and special purpose vehicles, designed to maximize financial gain in the first instance, while evading regulatory oversight in the second instance, and obscuring the source of funds in the third. This much at this stage is irrefutable.
“The matter is currently being pursued through civil action and should the NPA decide on not prosecuting Haldane and/or Pillay, investors will immediately seek a nolle prosequi certificate [a formal certificate issued by the NPA confirming that it declines to prosecute] in order for these private individuals to institute private prosecution proceedings.”
The Hawks and the NPA have not responded to questions about Haldane, as well as investors’ concerns regarding their specific cases having been closed.
Mjonondwane said the NPA “cannot pre-empt what will happen in court on 25 March as investigations into the matter are ongoing and it has been difficult to get the much-needed information from the complainants”.
“We invited them to provide us or the investigating officer with information, but it hasn’t been forthcoming,” she said.
“It is not true that there has been no contact between the NPA and Henderson as he has communicated with advocate Pillay on several occasions and he too has not been forthcoming with the requested information.”
But Henderson said NPA state advocate Nancy Pillay had sent him an email in response to his concerns about the case advising him that “there is no need to communicate with you as you are not a witness in my matter”.
Hawks spokesperson Colonel Katlego Mogale said: “This matter is currently before court and the next court appearance is on 25 March 2025.”
Several victims are preparing for the possibility of a private prosecution and civil action if the state fails to proceed to tria
