A former executive of a British-based engineering and transport group has been convicted in South Africa of defrauding the company’s pension fund.
Rowland Bailey pleaded guilty to charges of fraud and money laundering when he appeared before the Johannesburg commercial crimes court last week and his wife, Shirley, admitted money laundering charges.
The court was told that the couple had taken a R23million (£1.6m) surplus out of the Mitchell Cotts pension fund. The company, which had operated in the UK and Africa, but no longer trades as a group, is estimated to have a total of around 300 pensioners still living.
Rowland Bailey received a 10-year prison sentence and his wife received five years. But the sentences were suspended, provided, in lieu of a fine, the pair pay back £700,000 to the pension fund liquidator. This money will be taken out of their bail bonds. The couple have also agreed to hand over to the liquidator all their worldwide assets, estimated at R20 million (£1.4m).
They have also agreed as part of a plea bargain settlement to help the state in other ongoing cases involving a group of financiers that Johannesburg police say identified pension funds with a high surplus and then, having become involved with the funds, defrauded pensioners of surpluses totalling up to R1billion.
In the Mitchell Cotts’ case, the pensioners were still paid their pensions, but did not receive any benefit from the surpluses.
Commentators have described this group of cases as the biggest white-collar crime prosecution in recent South African history.