Accountant pursued over N$103m ‘fraud’

Petrichor Capital has secured a sequestration order from the High Court against Michael Hough Bronkhorst, a prominent local chartered accountant and businessman, to recover around N$103 million purportedly embezzled from clients of a Namibian insurance firm.

In an urgent application, former Petrichor trustee Heinrich Jansen van Vuuren branded Bronkhorst a ‘thief’ and ‘fraudster’ who knows that his house of cards is tumbling, and cannot be trusted.

“Fraudsters and thieves in general continue on their merry way, hiding what they have gathered through their fraudulent conduct to create a nest egg for when they leave confined areas in the future and return to society to then reap the fruits of their illegal conduct,” he wrote in court papers.

Bronkhorst, who has life cover of N$50 million, is suspected of having hidden funds to support his fraudulent activities, evident from regular monthly payments totalling N$1.2 million.

In a WhatsApp message sent on a Monday, which forms part of the affidavit, Van Vuuren stated that “the consensus is that criminal prosecution can be negotiated if all the money is paid”.

The affected entities are Camelthorn Business Trust, Bronkhorst Family Trust, Tal Valley Shell Trust, Moedhoop Property Trust, Rosyntjiebos Trust, Bio Mac Trust, GeelHout Trust, Central Select Trading, Summerdown Feeds and Property Trust, Delicious Bites Trust, Summerdown Feedlots, Summerdown Golden Harvest and Klimax Auctioneers.

Bronkhorst has been subpoenaed to give statements about accounts held with Bank Windhoek, FNB, Nedbank Namibia, Standard Bank, BIC Bank Namibia, Banco Privado Atlantico Namibia, Letshego Holdings Namibia, Trustco, Eos Capital, Old Mutual Investment, Allan Gray Namibia, Carbon Capital, Pointbreak Ashburton Investments, Alexander Forbes, Artis Investment Management, Momentum Wealth, Hangala Capital and others.

How it started

According to Van Vuuren, they had presented a local insurance company with a proposal in February 2018, which allowed them to use its risk transfer short-term insurance policies, also known as self-insurance policies, as collateral for secured commercial loans.

This business relationship commenced in March the same year, when Petrichor advanced its first loan on the strength of a policy that was ceded to it as security, and Petrichor issued debentures to the insurance company involved.

Bronkhorst, according to Van Vuuren, was instrumental in sourcing business for Petrichor as he was the main contact point for a number of policyholders, and was - on account of his financial acumen - fully trusted in the operation of this product offering.

In his affidavit, Van Vuuren said they, however, discovered large-scale fraud by Bronkhorst and several others between 3 and 4 March this year when he received an email from an underwriter informing him that a client wanted to withdraw funds from his policy.

The client was informed that he could not withdraw funds because the policy was ceded to Petrichor as security for a loan of N$2.5 million to a company named BV Investments Eight Hundred and Eighty Six.

The client denied ever having taken out a loan with Petrichor or having signed any cession in favour of Petrichor, and informed the underwriter that the signatures on the loan agreement were forged and that the account did not belong to him.

Shocked

“I was undoubtedly shocked and in disbelief. After I had calmed down, on that same day, I sent a text message to Bronkhorst and asked him to come see me at my offices the following day. On 4 March 2024 at about 10:00, he showed up together with his legal representative, Hennie Kruger.

“My colleague Mr Cronje and I were present. I made it plain to both that I am acting as a director of Petrichor and I informed Kruger that I cannot speak on behalf of the insurance company or the shareholders of Petrichor, but I am inclined to consider any proposal as long as the money gets paid back immediately. Bronkhorst and Kruger said they will formulate a proposal for us to consider,” he said.

According to him, he and Cronje met with Bronkhorst and his lawyer again the next day and it was then that his worst fear was confirmed – BV Investments Eight Hundred and Eighty Six was only one of many companies from which millions of dollars were embezzled.

“Kruger confirmed in the presence of Bronkhorst that the fake loan accounts diverted by Bronkhorst’s scheme for his own use amounted to about N$103 million. Kruger, in the presence of Bronkhorst, informed us that the latter has a net asset value of N$38 million, excluding the liability of the N$103 million,” Van Vuuren said.

These assets, according to his founding affidavit, include a feedlot operated by Bronkhorst, as well as cattle valued at between N$10 million and N$12 million. However, it was pointed out that the cattle and other movable assets are not necessarily his, and might be owned by trusts in which Bronkhorst is a trustee or beneficiary.

Bronkhorst allegedly also owns a farm valued at about N$27 million, but has a bond on it for about N$16 million. He further owns a N$5.3 million house in Klein Windhoek, but this is fully on mortgage.

Additional moveable assets allegedly include a few trucks, bags of maize and cattle feed, two Volkswagen Amarok bakkies, a BMW SUV, a Mercedes Benz transporter and a Channel Islands bank account – all estimated to be valued between N$10 million and N$12 million.

‘Not the right time’

“...To our shock and horror, [Bronkhorst] even suggested that Petrichor will have to lend or provide capital to him to enable him to repay Petrichor,” Van Vuuren said.

He added that it was not fathomable that Petrichor would become the financier of the “person who stole money from it”.

He allegedly asked Bronkhorst after their meeting what happened to the rest of the money, given that his estate only amounted to N$38 million - to which Bronkhorst reportedly responded “now is not the right time”.

According to Van Vuuren, their trust in the alleged fraudster ran so deep that he and Cronje serve as trustees - through their corporate vehicles - with Bronkhorst on the Camelthorn Business Trust, on which Bronkhorst, his wife and other corporate entities are beneficiaries.

“I really believe there is a great possibility that a huge portion of the N$60 million shortfall has been diverted to the entities or trusts which are beneficiaries of the Camelthorn Business Trust,” Van Vuuren said.

No external audit of this trust was ever done, and Van Vuuren mentioned that they will, with haste, look at insolvency.

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