Abstract:
The article below
is an extract from his book titled “Public Interest Warriors” to be
published soon.
By March 2007 total banking
deposits held by individual South
Africans ran into almost R269bn
which is equal to 15% of South
Africa's GDP.
Masterbond and several
other companies during that
time chose to sidestep,
among others, the Banks Act
and the Companies Act. The
result was that investors
were left unprotected.
The two key ingredients
for disaster were by 1980
evident on TEA's balance
sheet - a highly geared
balance sheet and short
term funding.
Supreme did business as
an insolvent company for
at least two years. The
directors knew about it
but kept the fact away
from investors. Likewise
they showed very little
respect for the law, their
responsibilities in terms of
the Companies Act and
regulatory authorities.
