Southern Life, now part of Momentum Life, is being sued for transferring R3.4 million in pension fund money under its administration to Corporate Acceptance Finance (CAF), rather than to the pension fund.
The case is a follow-on from one which ended earlier this month when the Supreme Court of Appeal in Bloemfontein ruled that Old Mutual should make good the losses sustained by the same fund after the life assurer paid CAF the proceeds from pension funds under its administration.
CAF was owned by Laurie and Jan Korsten. They also owned AMK Technologies. The pension funds of the two companies were administered by Old Mutual Life Assurance and Southern Life. In 1995, the Financial Services Board gave permission for the two funds to convert into a private fund.
Old Mutual paid the proceeds of its fund to CAF instead of the new pension fund, and the Korsten brothers used the money to finance their companies, which were later placed in liquidation. The pension fund was put under the curatorship of Tony Mostert in 1997.
Mostert says although the position of the fund has changed drastically since the outcome of the Old Mutual case, in order to make distributions, he needs to know the net worth of the fund.
He has lodged an urgent application in the Cape High Court to expedite the Southern Life case.