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Business Practices Committee Report 77

Financial Research Foundation (Pty) Ltd

5. The BPC resolves to formally Investigate FRF and the Publication of the Notice

 

 

At a meeting of the BPC on 23 March 1999 it resolved to undertake a section 8(1)(a) investigation into the business practices of Financial Research Foundation (Pty) Ltd (96/17090//07), a division of Financial Research Corporation (Pty) Ltd (94/07073/07), AL Friedman, FJL Friedman, L P Friedman, Michelle Friedman, Fritz Friedman and any director, employee, agent and/or representative of any of the aforementioned in respect of the activities of Financial Research Foundation (Pty) Ltd and Financial Research Corporation (Pty) Ltd.

 

The names and initials of the Friedman family were taken from documents on the BPC file on FRF. Michelle Friedman signed a letter to a client dated 13 October 1997 on the behalf of the "Legal Department" of FRF. Seetharam. A L Friedman and FJL Friedman were named as directors and LP Friedman as manager of FRF in a letter dated 14 November 1997 to NBS. Fritz Friedman signed a letter on the behalf of "FRF Head Office" in a letter dated 17 June 1998 to a client.

 

On 25 March 1999 the BPC wrote a letter to Reyneke, informing him of the proposed investigation. This letter was faxed to Reyneke at 08h29 on 25 March 1999. In the letter the BPC extended an invitation to his clients to address the BPC at its meeting on 8 April 1999. The fax was received by Reyneke. This is clear from the following letter dated 14 April 1999 which was sent by the BPC to Reyneke:

 

"The letter of the Committee dated 25 March 1998, which was faxed to your office at 08h29 of an even date, refers. Receipt of this fax was confirmed by you on 7 April 1999 during a telephone discussion with an official of the Committee. You indicated that the fax was handed to Mr Cubitt of your office. The following notice will be published in the Government Gazette of 23 April 1999.

 

"In terms of the provisions of section 8(4) of the Harmful Business Practices Act, 1988 (Act No. 71 of 1988), notice is herewith given that the Business Practices Committee intends undertaking an investigation in terms of section 8(1)(a) of the said Act into the business practices of--

 

Financial Research Foundation (Pty) Ltd (96/17090//07), a division of Financial Research Corporation (Pty) Ltd (94/07073/07), AL Friedman, FJL Friedman, L P Friedman, Michelle Friedman, Fritz Friedman and any director, employee, agent and/or representative of any of the aforementioned in respect of the of the activities of Financial Research Foundation (Pty) Ltd and Financial Research Corporation (Pty) Ltd".

 

On 15 April 1999 Reyneke responded to the letters of the BPC dated 25 March 1999 and 14 April 1999. The BPC was informed that: "This firm, however, no longer represents the Financial Research Foundation or any of its branches. There is accordingly nothing that this firm can do for and/or on behalf of that organisation in this matter". Reyneke also suggested that "... if your Committee really wish to undertake an investigation of a harmful business practice that is causing actual - as opposed to theoretical - harm to the commercial life of South Africa, your Committee launch an investigation into the failure by commercial banks and money lending institutions in general, to comply with section 10 of Act 73 of 1968".

 

On 14 June 1999 Reyneke was advised to direct the complaints to the state organs responsible for applying the relevant statutes. It was also stated in the letter that Reyneke would figure in the report of the Consumer Affairs Committee to the Minister because of his involvement with FRF.

 


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