In a statement on its website, the Financial Services Board (FSB) upheld the industry-wide ban of Willem Jonker, the chief executive of Interneuron, which went bust last year after it was found to be operating an unregulated property scam.
Jonker was originally barred by the watchdog last April for failing to manage and oversee the activities of the firm, but he launched an appeal against the ban just a few months later.
During its investigation of the company, the FSB found that much of the money managed by Interneuron disappeared in unauthorised financing of failed property developments and unsuccessful derivative trading.
The FSB maintained that Jonker failed in his legal duty to “act with due care skill and diligence” but added that it had found no evidence of the dishonesty from him.
“In short, the registrar debarred Mr Jonker, not because she attributed the representative’s dishonesty to him, but rather because he had a legal duty in his capacity as key individual to manage and oversee the activities of both Interneuron and the representative.
“It is the failure in that regard which contributed to the substantive losses sustained by the client,” said Yvonne Mokgoro, chair justice of the Appeal Board.
Interneuron scam
According to the FSB, many clients of Interneuron, including retail investors and retirement funds “sustained substantial losses” currently estimated at R100m.
In one instance, an unnamed client “experienced trading losses and substantial amounts of the client’s investment were transferred to another client over the years”.
The firm then falsified investment reports to the client regarding the performance of the investment. Interneuron also invested the client’s funds in unsecured loans.
In other instances, the asset manager ploughed money into hopeless property schemes where a property was bought for R14m but ended up selling at auction for just R2.85m.
Another employee of Interneuron, Gerrit Bekker, was also barred by the FSB last year after it found him guilty of “unlawfully and intentionally stealing” R8.9m to pay into the bank account of the Arwa retirement fund to compensate for losses incurred by him while derivative trading using the client’s assets.
