On the trail of Brett Kebble’s missing billions
Exposed: The toxic face behind SA’s largest corporate fraud
- After Brett Kebble’s gangland style murder, some former directors at his companies JCI and Randgold lived in fear for their lives
- Kebble’s dalliances with questionable characters contributed to his misfortunes, and particularly one investment banker Charles H D Cornwall
- Cornwall joined the JCI as director in 2001, and was accused in 2005 of plundering the company by furious shareholders. He has a checkered history acquired during his tenure as CEO of video game maker, Eidos
- Our investigations reveal how he engineered the pitfall at JCI and details his operations, including use of private limited liability companies as conduits for plundering
Navigating the maze that preceded the September 27 2005 murder of the flamboyant South African mining tycoon, Brett Kebble, has led us to a previously-faceless individual who appears to hold the key pieces to this believed-to-be-insoluble jigsaw puzzle. South African-born British businessman Charles Henry Delacour Cornwall has managed to fool authorities and friends in multiple countries. Our team of investigative journalists, forensic accountants, activist investors, market watchers, and data and systems analysts, working in the UK, Seychelles, Singapore and Italy, has managed not only to put together the complete picture, but also to track this ghostly investment banker / stock manipulator to a Southern Cape farm where he has been holed up for nearly five years, happily continuing to rip off more business people...
“…During Kebble’s tenure, it was not unusual to find Charles Cornwall, a director of some Kebble’s companies, wandering around the world-class landscape gardens, [of the Melrose House], contemplating his navel, whistling to the birds, talking to the trees and muttering things about hedge funds.” Barry Sergeant, an investigative financial journalist in his book, Brett Kebble, The Inside Story.
The plunder of investors’ assets via Kebbleland Zoo was as grave as it could get and the maze almost too complicated and complex to be understood by most commercial crime prosecutors. Most baffling is the exact whereabouts of the loot.
When the bullet-ridden body of Brett Kebble was found slammed on the wheel of his German limousine in Johannesburg, those who really knew how he ran his business empire and were aware of the gangs that were always by his side were not altogether surprised. His closest confidants, however, knew that the world was opening up ready to swallow them. Their demise was imminent; it wasn’t a matter of if, but of when, their eulogies would be read. For months after Kebble’s murder, we have reliably been informed, his former sacked directors at JCI and all Randgold Group associated companies lived in fear – they chose alternate routes when driving to their homes, avoided secluded places, ignored calls even from friends, ditched their known motor vehicles, occasionally lodged at friends’ homes… This fear wasn’t misplaced because they knew exactly what they had been up to and probably knew whom they were up against.
These former directors were not afraid of the cheap thugs we all witnessed during the trial of Glenn Agliotti. They knew those hirelings could not even shoot straight, and when they did shoot, more often than not either the firearm wasn’t working or the car they were using wasn’t all that reliable. Instead, Kebbleland’s former directors were seemingly terrified of the several ‘families’ whose monies they appeared to have lost at the laundry they had made of JCI. We have learnt that they only got to relax after the arrest and prosecution of former police commissioner Jackie Selebi when it was revealed that the death had been attributed to some wannabe mobsters.
So if it were assisted suicide as was claimed, could the young Kebble too have been afraid of the same people and chosen to control his own exit? Had he been pushed into a corner by his own sense of self-importance, trapped by the inability to point fingers at the co-directors who had led him astray? As we await answers to these questions from some of the world’s top social scientists and psychoanalysts, let’s consider what we already know.
Kebble Junior’s main mistake, we can now reveal, was to get into bed with the wrong crowd. Key amongst these villains was Charles H D Cornwall, an investment banker who had cut his teeth in the DotCom era. Although he has been repeatedly referred to as the founder of the video game publisher, Eidos Interactive Plc., data gathered from London show something different. Cornwall in fact resigned from investment banking to join the board of Eidos in 1993 on invitation of the company’s co-founder, Stephen Streater. He was elevated to CEO sometime in 1995.
Our data and information processing application led us to question his ‘resignation’ from the helm of Eidos Plc., announced in 2000. That was the period when talks were in progress to turn the company’s best-selling video game, Lara Croft: Tomb Raiders, into a movie. If Cornwall’s leadership had been unimpeachable, why would the board have allowed his resignation? The second red flag was the qualifier ‘with immediate effect’. Top executives of successful corporations do not depart with ‘immediate effect’. Finally, the third indicator our application questioned was the positive reaction enjoyed by Eidos’ stock trade immediately following the announcement. Cornwall had been the toxin that had threatened Eidos’ success. [See editorial]
Further evidence gathered during our investigations confirms that despite bearing the title of CEO of Eidos at the time of his ‘resignation’, Cornwall had technically already left the company some time before. Once again, the market and investors were deprived of this vital information; for example, the fact that he had registered several shelf companies in South Africa while he was purportedly still the Chief Executive of Eidos is a firm indicator.
In a report published by citywire.co.uk, financial journalist Joanne Wallen quoted Nick Seddon, CEO of games developer Kaboom Studios: “Charles’ departure is not a great shock to the industry, it is really just finalising what has been the case for some time…”
And foreshadowing what would later become regarded as Kebble’s classic modus operandi, Wallen wrote, “It seems Cornwall was very ‘entrepreneurial’ - in other words fairly free when it came to spending money. The company has made several acquisitions over the years and managed to spend quite heavily.”
This was further reinforced by Jeremy Heath-Smith, former CEO of Core Design, CentreGold Plc., and the techie who designed Lara Croft: Tomb Raiders. In the book by Rebecca Levene and Magnus Anderson, Grand Thieves & Tomb Raiders: How British Video Games Conquered the World, Heath-Smith stated: “Charles was very clever at raising funds, and the way to raise funds if you haven’t got any is to go and buy defunct companies to raise a load more money.”
One needs only to consider the various worthless acquisitions that nearly broke Randgold’s back: BHP Minerals Mali Inc., Ashanti Goldfields’ Obuasi gold mine, Syama gold mine… the list goes on.
Where is the Loot?
Our investigators decided to pick up the search for the missing billions from where the forensic auditors hired by Randgold & Exploration Ltd had signed off. Though the trail is somewhat cold by now, the key definitely appears to lie with Cornwall, the Ghost of London and the guru of stock manipulations. His name is relatively familiar to most of London’s seasoned financial journalists and to the City’s market watchers, but none of those with whom we have collaborated seemed able even to describe what he looks like. Camera-shy? Could be...
The vague statement issued by the board of Eidos during his ‘sacking’ or ‘resignation’ in November 2000 simply stated that he had ‘decided to resign to follow some other interests in the USA and South Africa’. We can now confirm that his economic shenanigans as the CEO of Eidos, which were kept secret from the market, were later to be perfected within Kebbleland Zoo.
Cornwall had the skills and the mouth the young Kebble needed to sustain his public persona. To help us understand Brett Kebble, we requested requested a team of social scientists and psycho-profilers to recreate for us his sociological profile based on publicly available data, including the transcripts of both the Selebi and Agliotti trials and the two books, Killing Kebble (Mandy Wiener) and Brett Kebble: The Inside Story (Barry Sergeant).
Brett Kebble, they summarised, was an egocentric yet people-pleasing individual. He appears to have been strongly focused on maintaining his high-profile status, which was becoming difficult to sustain in the context of the ever-increasing daily demands from those who idolised him. He likely felt socially responsible for growing numbers of people. Most importantly, he needed to remain visible and relevant, and he began to use whatever means he could to achieve that.
It’s possible that there existed some further shadowy forces behind the schemes he got involved with, but with the exception of John Stratton who is holed up somewhere in Australia, nearly all evidence points to Charles HD Cornwall as the main dealer within the Zoo.
Cornwall was the Mister Know-It-All who convinced everyone that he had made it big at the London Stock Exchange and now just wanted to retire and play polo with the boys while showing off his numerous expensive toys in sunny South Africa.
If Brett needed a private jet, Cornwall would call on his contacts in the aviation industry and a jet would be custom-built and delivered. Helicopters would be available at the drop of a hat. But all these were based on paper money: the same paper money the Kebbleland crew traded in as the ship started to sink.
By comparison with his days in London, Cornwall found it easier in South Africa to avoid the pitfalls that had caused him to be placed under close scrutiny by the City Regulators. Unlike with Eidos, he discovered how easily he could conduct business [most of it questionable] using private limited liability companies without personally being liable. Though he would remain in control of the plundered assets of the companies, when it came to liabilities, creditors would be forced to deal with the (Pty) Ltd., which were then conveniently identified as independent entities.
Among the first such entities were: Silver Terrace Investments (Pty) Ltd. (1998/006641/07), Core Asset Holding (Pty) Ltd (2000/023754/07), Onshelf Property 102 (Pty) Ltd (200/023751/07), Investage 170 (Pty) Ltd (2001/019101/07) and Multidirect Investments 61 (Pty) Ltd (2001/012778/07). Of all these, only Investage initially was visibly used in the plunder of Randgold’s assets. It appeared too sophisticated to have been designed by a UCT law graduate – Brett.
Let’s briefly revisit what was easily accessed and disclosed by forensic auditors from Umbono Financial Advisory Services on behalf of Randgold Group.
Cornwall and a few well-placed JCI directors wanted access to Randgold Group’s assets and they quickly discovered that in the full glare of the public, they could purport to buy the shares without spending their own money by employing a multi-layer derivative trading scheme that would be the envy of Investment Bankers of Wall Street.
Understanding and playing around with their derivative was so complex that most experienced and skilled investors would have opted out. Investment is like ordering dinner in a restaurant: just as you don’t order anything you cannot pronounce, you should never invest in what you don’t understand. Unfortunately some investors, including bankers and assets funds, simply nodded with approval whenever the gang explained matters to do with derivatives.
It’s worse than high-stake gambling. Financial journalist, Barry Sergeant, puts it succinctly in his book Brett Kebble, The Inside Story:
“…In typical Kebble mode, the cash was raised in a most complicated manner by use of derivatives. Even given the arcane language of derivatives deals, Kebble’s description was as legible as Incan hieroglyphics…”
Sergeant goes on to explain what Kebble had wanted the would-be investors to believe:
“Western Areas has implemented a derivative structure, based upon the selling of options on a portion of Western Areas’ 50 per cent share of South Deep’s gold production. Option premiums have been received upfront and payment of premium for the bought options has been deferred. The accounting treatment has resulted in the raising of a deferred expense asset and a deferred income liability in respect of premiums payable and received on the options. Premium income and expenses are amortised to the Income statement over the period of the structure (12.5 years).
As most of us would be totally confused by all that, Sergeant explains what it was actually about:
“He [Brett] put three type of derivatives in place: put options bought, call options sold and call options bought. The price ranged between $260 an ounce of gold in the early years of the structure and $333 an ounce in 2014. However, the bottom line was fairly easy to express on 29 November 2005, when spot dollar-gold prices topped $500 an ounce. If gold bullion remained at $500 an ounce until 2014, the Western Areas hedge book was ‘under the water’ by roughly $500 million on 29 November 2005…”
Kebble and the gang had oversold what they did not actually have, and at massive losses. The intention was clearly not to add value to the shareholders, but to generate enough interest in the Randgold Group’s assumed assets to attract more marks. What wasn’t known at the time and was only revealed much later, was the fact that as quickly as investors were buying into these fictitious-yet-risky structures, the gangs within Kebbleland were busy siphoning the funds off to undisclosed destinations.
The scheme was an upgraded version of what Cornwall had used in the UK while he headed Eidos Plc. It had his fingerprints all over it. The younger Kebble was not clued-up enough to get down to the brass tacks of the ploy.
We have since confirmed from several sources close to the plunder that the brain behind the derivatives scheme was indeed Charles Cornwall, or HD or Charlie, as some call him. Not only did he introduce the derivatives structuring to Kebbleland, but he is now believed also to have been the inspiration for the chains of shelf companies that were used to deplete and scatter the resources looted from the associated companies.
Our sources believe that the initial reason for the creation of the shadowy shelf corporations was to provide fictitious stockowners that were to be allocated massive Randgold and JCI’s stock with the expectation that they would periodically trade them about to sustain activities without being accused of insider trading. This would keep the listed companies active within the Stock Exchange, hence providing the perception of healthy status.
Unfortunately for his fellow directors, the moment the shares were allocated to shelf companies associated with him, Cornwall quickly converted them into liquid cash. One such company was Investage 170 (Pty) Ltd through which he pledged 155.4 million of JCI shares to Nedbank to obtain a personal overdraft, apparently to offset some of his pressing personal debts and to sustain his ‘I am wealthy’ lifestyle.
By January 2004, with Investage’s (read Cornwall’s) consent, Nedbank had sold all pledged JCI shares, to the tune of R101 million. The explanation given was that the R17 million raised from the overdraft was used to settle debts owed by Cornwall’s property company, Silver Terrace Investments (Pty) Ltd. This however appears not to have been the case.
Funds were cleared as soon as they landed in Silver Terrace’s accounts, once again vanishing to undisclosed destinations around the globe or maybe used to buy some farms around the country. One of Silver Terrace’s creditors was Buys Trinder Bossi (Pty) Ltd, just one among Cornwall’s many unpaid creditors.
As Buys was trying to obtain a High Court judgment against Silver Terrace for the non-payment of R796,317.11, (Case No. 5520/06), Cornwall was several steps ahead. At the same time as applying for and obtaining additional bonds on the property from Investec Bank, he sold the property to Stylestar Properties 108 (Pty) for R16 million. As the court judgment was being granted against Silver Terrace, Buys Trinder Bossi was left with nothing worthwhile to attach. Silver Terrace (Pty) Ltd had been left an empty shell, and Buys was forced to return to the High Court to seek a liquidation order against Silver Terrace (Case No. 7534/08). Cornwall must surely have been laughing at the wasted legal costs and the coming true of a litigant’s worst nightmare.
Another futile litigation was one filed by FirstRand Bank Ltd T/A Wesbank (Case No. 19144/07) for a claim of R2.8 million in respect of four cars:
The outcome of this claim was that an agreement was entered into that should have seen Cornwall return the cars to Wesbank, but of course he has been nowhere to be found.
One would wonder how he has managed to elude creditors all these years. Could it be that he is just too smart for them? The answer was provided by our custom-designed data and information processing application.
Our application revealed to us that Charles Henry Delacour Cornwall officially operates on at least three different birth dates: November 18, 1962, November 11, 1962 and November 11, 1961. His real birth date is November 11, 1961 through which he registered Any Name 509 (Pty) Ltd. (2005/042838/07), Kurland Park Investments (Pty) Ltd. (2003/012317/07), Kurland Park Polo Club cc (2002/094611/23), Kurland Park Properties (Pty) Ltd (2005/021965/07), Rosevean Investments 0034 (Pty) Ltd. (2002/030163/07), Sedge-Shelf 42 cc (2005/004935/23), and Tanin Trading 141 (Pty) Ltd. (2005/007016/07). It’s highly probable that he also runs several other operations under unregistered companies.
All the entities he used to plunder Randgold Group’s assets had been registered under his second date of birth, November 11, 1962. So for which Charles Cornwell would creditors and victims be searching – the older or the younger one? As our investigation now confirms, they are one and the same. CHD Cornwall, the King of The Good Life, Mastermind of SA Derivatives and SA Shelf-Companies.
However, complexity and arrogance seem ultimately to have gotten the better of him and he omitted to close some gaps in his otherwise closely-guarded kingdom. Through them, our team of investigative journalists and experts working on two continents gained access.
The first gap that the chief mastermind of the Kebbleland had left open was the easily-identifiable Tuscan Mood 1224 (Pty) Ltd. This company had been used to clear some small amounts – small by Cornwall’s standards; after all when hundreds of millions were quietly disappearing, he would have thought that single-digit millions would not have attracted much attention. He was wrong.
The first group to enter through the Tuscan Mood front door were forensic auditors from John Louw & Co. (Pty) Ltd. (previously Umbono Financial Advisory Services) who were able to trace R34 million, which had been syphoned off from the coffers of Randgold & Exploration. Had they gone though the trap doors or into the basements, they would have found more.
When we gained that access, we easily picked up from where John Louw & Co had left off. Tuscan Mood 1224 (Pty) Ltd turned out to be significantly-named: it was directly linked to Italian roots, specifically to the Tuscany region of Grosseto and Livorno provinces and to Tuscan Archipelago, which, as well as Los Angeles, was Cornwall’s frequent holiday destination during his time at Eidos Plc.
This discovery prompted us to check the possibilities of any other shelf companies bearing the same name, and the investigations revealed a total of 317 more. To start with we found Tuscan Mood 1156 CC (2002/096181/23), registered in 2002, the same period as the 1224 (Pty) Ltd. The 1156 CC lists its directors as Claudio Gaggio and Elisa Gaggio, aged 63 and 40 respectively – probably father and daughter or brother and sister*.
A search at the deeds office revealed that the Tuscan Mood 1156 CC owns two Portions of Farm Redford 232, - 37 and 45, in Plettenberg Bay. Despite the Plettenberg Bay connection (where Cornwall was last seen), it wasn’t until his name got ‘pinged’ by our researchers at the Western Cape High Court a few days before we went into production that the link was confirmed.
Charles Henry Delacour Cornwall has been listed in a child custody battle that is currently being fought at the High Court. [We are compelled by the Children’s Protection Act not to publish the identities of the five-year old child and her parents – we shall however seek leave of the High Court in the coming days to be allowed to report on the contents of the proceedings].
This fresh High Court matter has led us to Cornwall’s present hiding place: Portion 37 of Redford Farm 232, Redford Road, The Crags, Plettenberg Bay. The custody case has also been tied up to another developing story showing what Cornwall has been involved with since his so-far successful evasion of the various Sheriffs of the Courts who have been trying to locate and serve him with court papers. [See The Tuscan Wannabe Mobster].
The other 316 Tuscan Moods could provide some crucial clues to what happened to the billions that disappeared from Randgold Group. It is strange that despite the farm having been bought for cash, just a year after the death of Brett Kebble the owners of the farm were in financial difficulties which prompted them to borrow R2 million from Absa Bank against Portion 37 of the farm.
Some of our sources allege that Cornwall had received funds from the Italian investors for the purchase of the two portions of land plus a third one, but that he had kept the money offshore while he used proceeds from Randgold Group to buy the farm. We are still trying to verify this information. Our repeated calls to Cornwall’s cellphone initially went unanswered and as the mailbox was full we could not leave any messages. Subsequently, he would answer his cellphone and disconnect immediately.
The decision to use Shelf Companies does not fit with the social and psychological profile that our team had been drawn for Brett Kebble. ‘He loved to be seen and noticed’. When he decided to buy expensive wrists watches in London, he never sent assistants; he had to be seen buying them. Such a person would not hide his dealings, however sneaky, under some shelf corporations. The world had to feel and be forced to deal with his presence; everything and everyone had to bend to his ways of doing things. If he loved an idea and the owner allowed him, he would take and own it. Those he trusted, however, were more willing to remain in the shadows.
*We have since established that Elisa is the daughter of the founder of Claudio Gaggio’s daughter the founder of Italian Cartorama (now Cartorama Group) of Turate. She was formerly married to a Milan lawyer, Luca Simoni.
If you like our work, feel free to support us either in-kind (your time would add more value to our work) or financially: