Bank opposed property investment

Standard Bank’s investment committee was against investing the Rauch trust’s money in the BlueZone property syndication because it did not offer proper diversification to reduce risk of loss of capital and income, Erik Larsen, head of communications at Standard Bank, says.

Larsen says the bank was approached by Paul Rauch (a cotrustee with Standard bank and other members of the Rauch family), who introduced his adviser Peter Wildman, who had previously been employed by Standard Bank but was of an entity that was licensed to render financial services in terms of the Financial Advisory and Intermediary Services Act.

She says directors of failed Ponzi schemes often evade scrutiny and liability for a scheme’s demise by hiding behind a liquidation process to try to divert attention from the then a sales director of BlueZone.

“The proposal to invest in BlueZone was referred to and rejected by the bank’s investment committee. The committee was of the opinion that the capital for a trust of this nature should be well diversified in various asset classes for the protection of the interests of the beneficiary. This investment exposed the capital to only one asset class, being the commercial property market, which was not an appropriate investment for a will trust, that must provide an income for a surviving spouse,” Larsen says. fact that they misled shareholders and members of the public.

“There can be no doubt that, by running the BlueZone scheme fraudulently, the directors of BlueZone opened themselves up to being held personal liable,” Bam says.

She ordered Van Zyl and Lamprecht to repay the R720 000.