Financial services firm Regiments Fund Managers has denied the DA claims of mishandling the “Sinking Fund” of the City of Johannesburg. In a statement released to the media, the firm said:
Regiments Fund Managers, a division of Regiments Capital, today refuted all claims made by DA councillor John Mendelsohn with regards to alleged misconduct of the City of Johannesburg’s sinking fund.
The company considers Mr Mendelsohn’s statement that, “KPMG conducted an investigation into the fund and produced a damning report” as baseless sensationalism completely without merit.
KPMG was appointed as the auditor of the fund by its client – the City of Johannesburg – to ensure that its assets are managed according to stipulated regulations and mandate. As the sinking fund forms a part of the CoJ’s asset registry, and while Regiments Fund Managers is the manager of the fund, it would not be appropriate for Regiments Fund Managers to approve any access to information requests by any third party. This responsibility falls within the ambit of authority of the CoJ itself.
“To the best of our knowledge, no investigation has been undertaken by KPMG as has been alleged. As the fund manager we responded to audit queries in the normal course of the audit process from which in which no malfeasance was being alleged.. We consider the insistence that such a report has been drafted to be damaging to both our reputation as a fund manager as well as the reputation of our client,” Nyhonyha said.
Mr Mendelsohn’s allegation regarding mismanagement of the fund is baseless and we consider it to be hugely irresponsible of the DA to hold a press conference making such allegations when the credibility of the information, as well as that of the ‘single source’ from whom it has been obtained, has not been duly and thoroughly considered. Our legal rights in respect of these allegations, to the extent that it can be considered defamatory, are expressly reserved.
In September of2005, Regiments Fund Managers was appointed through an open tender process by the City of Johannesburg to implement and manage its sinking fund. Under this contract Regiments earned a market related management fee of 35 basis points per annum of assets under management. Subsequent to its appointment, Regiments Fund Managers has consistently delivered returns that were above the mandate expectations – to the benefit of the city and its people as a whole.
The fund’s performance in 2010 enabled the City of Johannesburg to successfully, with positive market impact, redeem the R 1bn COJ01 bond liabilities due in 2010.