Millions for Ex-Wife of Prowealth CEO

THE former wife of the disgraced founder of the bankrupt Prowealth group of companies, the late Riaan Potgieter, is set to receive more than N$17 million in life insurance payouts six and a half years after the suicide of her ex-husband.

Settlement agreements that the late Potgieter’s former wife, Louise Nel (previously Potgieter), and two insurance companies signed last week have opened the way for Nel to receive life policy payouts amounting to N$17,2 million that have been halted by a court order for the past six years.

Acting High Court Judge Thomas Masuku made the settlement agreements between Nel and insurance companies Old Mutual Life Assurance Co (Namibia) and PPS Insurance Co (Namibia) through a court order on Friday. At the same time, the court also lifted a previous interim interdict that had been preventing the two companies from paying out the policy proceeds to Nel since the end of July 2009.

The liquidator of a key company in the Prowealth group, Prowealth Asset Managers, consented to the release of the policy proceeds to Nel, whom her ex-husband had named as the beneficiary of the policies before his death at the age of 39.

In terms of the two settlement agreements, the proceeds from two Old Mutual policies totalling N$533 800, and from a PPS policy, in an amount of N$16,7 million, should be paid to Nel within seven days after the court order was granted.

According to Nel, she and liquidator Alwyn van Straten have also agreed that an amount of N$1,35 million, plus interest at an annual rate of 20 percent from 12 June 2009, should be paid to Van Straten in his capacity as liquidator of Prowealth Asset Managers. The N$1,35 million represents the amount that the late Potgieter spent on some policy premiums from the beginning of 2003 until his death, as well as half of the proceeds from a policy with another insurance company.

Potgieter and Nel’s marriage of nearly ten years ended in divorce in 2001.

Van Straten has in the meantime obtained a court order for the sequestration of Potgieter’s personal estate. The order, which was confirmed in the Windhoek High Court on 15 May, means that Potgieter’s estate has been placed under the control of trustees, who will have to evaluate multimillion-dollar claims against the estate and distribute assets in the estate to Potgieter’s creditors.

Potgieter, who took his own life in Windhoek on 8 December 2008, is accused of having committed one of the biggest frauds in Namibian corporate history.

At Van Straten’s request the High Court declared in November 2010 already that Potgieter’s estate, the holding company of the Prowealth group, Prowealth Group Holdings, and one of the companies in the group, Prowealth Consult, would be liable for all of the debts of Prowealth Asset Managers.

In an affidavit lodged at the High Court in the case in which Van Straten asked for the sequestration of Potgieter’s estate, he informed the court that an amount of only about N$7 million might be available from the estate for distribution to Potgieter’s creditors.

Van Straten stated that 89 investors have launched claims, totalling N$104,8 million, against Prowealth Asset Managers. The biggest claim is from an investor alleging that the company owes him N$20,5 million.

Van Straten also informed the court that the executor of Potgieter’s estate, lawyer Soleil Prollius, has not been willing to approve all of the investors’ claims against the estate, because in her view the claims did not take into account amounts of money that had been paid to investors before Potgieter’s death and the collapse of the Prowealth group.

Prollius has been willing to accept claims totalling N$16,6 million against the estate, Van Straten further said in his affidavit. If those claims were the only ones accepted against the estate, creditors would receive a dividend of about 42 cents in the dollar from the estate, Van Straten said. “This unfortunately does not take into account those claims which [the executor] is not willing to admit,” Van Straten added.

He also recounted that a forensic audit of the financial affairs of the Prowealth group showed that about N$68,9 million in investors’ funds had been deposited directly into the current account of Prowealth Asset Managers. From that amount, N$28,9 million was aanced to the Prowealth group and N$21,5 million was aanced to Potgieter as loans.

Prowealth Consult received N$30,7 million that came from investors. At least N$11,4 million of that amount was in turn used to pay personal expenses of Potgieter, Van Straten said.

An amount of at least N$22,4 million that came from investors was also deposited directly into Potgieter’s personal accounts, Van Straten stated.

Source : The Namibian