Funds marketed in Hong Kong linked to Belvedere fraud probe

PUBLISHED : Monday, 06 April, 2015, 9:20pm
UPDATED : Wednesday, 08 April, 2015, 7:46am

Questions are mounting over several funds promoted in Hong Kong that are now dogged by fraud allegations, director resignations and the arrest of 13 traders at a London-based foreign exchange brokerage.

The US$130 million Kijani Commodities Fund and the Capital World Markets (CWM) Brighton funds are both linked to Mauritius-based Belvedere Management Group, an offshore financial services firm under investigation by regulatory authorities in Mauritius and Guernsey.

Trading in the Kijani fund, which returned 21 per cent last year, halted late last month after an exposé by David Marchant, an investigative journalist and editor of the Offshore Alert website, questioned the fund's stellar returns.

"The allegations are being strongly contested," Kijani directors said in a statement to investors.

Kijani and the CWM Brighton funds were marketed in Hong Kong, according to investment advisers and promotional literature and emails seen by the South China Morning Post.

Kijani recently replaced two directors who resigned in the wake of Marchant's allegations, its board announced.

Emails and phone calls to Belvedere's office were not returned. Calls to CWM's London office were not returned.

Another Belvedere-linked fund distributed in Hong Kong, the Strategic Growth Fund, was sold to clients of wealth management firm Devere Group, up until the fund's suspension in 2013 amid concerns over its performance.

Belvedere specialises in fund management, life insurance and corporate services, mainly targeted at expatriates, according to the firm's website. In October, the Mauritius Financial Services Commission announced it had "initiated enforcement actions" against two of Belvedere's fund businesses: Four Elements PCC and Lancelot Global PCC.

In March, the commission said it had suspended the licence of RDL Management, a Belvedere fund management group, and appointed PricewaterhouseCoopers as administrators.

Also last month, City of London police raided the offices of brokerage CWM and arrested 13 people "on suspicion of fraud by false representation, conspiracy to defraud and money laundering", a police spokesman told the Post.

CWM operated funds branded Brighton SPC that offered 5 per cent monthly interest. Kijani is part of Brighton, but would "sever any association" with the fund division, Kijani directors said in their statement.

A separate investigation into Belvedere was launched by regulators in South Africa, where Belvedere head Cobus Kellermann is based.

South Africa's regulator, the Financial Services Bureau, confirmed in a statement it was helping Mauritius and Guernsey in their parallel investigations.