In Confessions of a Confidence Man, Edward H. Smith lists “the definite steps or stages of growth” of a confidence game:
Preparations are made in advance of the game, including the hiring of any assistants required.
The victim is provided with an opportunity to profit from a scheme. The victim’s greed is encouraged, such that their rational judgment of the situation might be impaired.
Pay-off or Convincer
The victim receives a small payout as a demonstration of the scheme’s effectiveness. This may be a real amount of money, or faked in some way. In a stock market con, the victim is given fake dividends.
A sudden crisis or change of events forces the victim to act immediately. This is the point at which the con succeeds or fails.
A conspirator (in on the con, but assumes the role of an interested bystander) puts an amount of money into the same scheme as the victim, to add an appearance of legitimacy to the scheme. This can reassure the victim, and give the con man greater control when the deal has been completed.
David Cunningham King and his accomplice Iain Gregory Morris are accomplished con-men. Their biggest and most successful long con began in 1997. They both claim to be qualified accountants. Nothing could be further from the truth. King was a clerk in a Cathcart company that manufactured slurry pumps. He spent weekends as a golf caddy to American tourists. He hustled them. There is no record of King ever attending Ibrox during this period. His credentials as a Real Rangers Man are as illusory as his faked accountancy certificates. No-one faked accountancy certificates better than Greg Morris. The latter had used his confection to blag his way into a position of authority – Financial Manager – at Umgeni Water.
In a confidence game, the illusion of financial propriety is a useful device during the Foundation Step. The background to KingCon has been forensically examined by a Legal Investigations Team. Its report was sent to Ronnie Kasrils, The Minister Of Water Affairs And Forestry, on the 1st June, 2001. Mr Kasrils issued a six page missive to the board of Umgeni Water in Pietermartizburg 13 days later. The following extracts from his missive are instructive when discussing the scale of King and Morris’ 4.2b ZAR Treasury Fraud. Mr. Kasrils wrote:
“We are a newly established democracy with much to learn. We need to be vigilant if we are not to fall prey to the profiteers who are always circling seeking easy pickings. This whole process should be a salutary warning to Board members of all public enterprises, not just those in the water sector. We have to recognise that directorships are not a gift, an honour or a community service but an onerous responsibility.
• I accept the finding that two former Board members held shares in SOL.
• I accept the conclusion that the contract entered into with SOL in 1997 was unfair, unbalanced and prejudicial to Umgeni.
• I further accept that the fees paid by Umgeni were excessive in the circumstances.
• In these circumstances, I note and support the avoidance of the contract with SOL.
• I need to record that the report demonstrates that there were serious lapses in Umgeni’s corporate governance in 1997 that allowed this situation to develop.’
There is prima facie evidence of serious misconduct that must be addressed. Therefore, until such time as such external reviews have been completed, and without prejudice to their outcome, I believe it would be wholly inappropriate for certain of the parties concerned, namely SOL or its former Chief Executive Mr David King to have any further engagement in the affairs of Umgeni save insofar as they may be required to provide such relevant historic information needed to prosecute further enquiries or required in order to place the future management of the Treasury functions on a firm footing.”
Dave King and Greg Morris were arrested and charged with corruption and fraud in April of 2001. Their trial in Pietermaritzburg Court collapsed when witnesses failed to attend. Were these witnesses intimidated by King’s underworld contacts? Were these the same contacts who subverted their racketeering trial where only 3 of 14 state witnesses had the courage to attend?
King bribed Morris with a position at SOL. Other executives were bribed with shares in SOL. When King had his hands in the £420m treasury till he exploited Umgeni like his namesake Don King exploited boxers.
The Foundation Work was in place. The next step, The Build Up, was to list Specialist Outsourcing on The Johannesburg Stock Exchange at 50c per share. King and Morris then issued quarterly returns which demonstrated unparalleled success. The returns were fake. King & Morris pumped the shares up to 70 Rand at their peak. They solicited funds from a number of disparate sources, including an orphanage. What could possibly go wrong with ‘qualified accountant’ Mr. King who had access to the State Water’s Treasury Fund?
The paper profits were The Pay-Off. With this stock taking off, investors cast prudence to the wind in a frenzied bid to board the gravy train. They were so relieved that they had clambered aboard the train before the train had left the station. The Hurrah was good to go.
It was soon time for the In-and-In. Unbeknown to anyone except Outsourcing’s founder Dave King, his company Ben Nevis sold its 70% stake in SOL over a three years period yielding a profit of R1.2bn, which was circa £120 million in Sterling. The funds were immediately “repatriated” to offshore bank accounts. Ben Nevis was registered in The British Virgin Islands . This in turn was owned by a Guernsey-based discretionary trust called Glencoe. As we discovered in Lord Ballantyne’s opinion King has now initiated another layer, Sovereign, which controls his game of three-card monte.
Asset managers unable to find shares in the open market privately approached King for stock. He always denied being a seller. To his mind that was true. Ben Nevis, not DC King, was offloading. I have emphasised this sentence in bold type as it will resonate when one considers present King’s criminal endeavours in Govan. During this three years period King continued to buy the stock in sufficient quantities to maintain its price. He briefed analysts that his stock acquisitions demonstrated that he was in SOL for the long term. With every share knocking on the front door, ten were being knocked off at the back door.
By October 2001, King had resigned from SOL to start a similar business called Legacy Ventures, which was later renamed Micromega. His original creation ended up worthless. Sanlam, Old Mutual, Coronation and Southern Life tried to make King accountable, claiming he fudged the financials and manipulated the share price. They had all been duped by KingCon.
I was one of the very few who saw King coming. The Mensch and I were trashed on the RIFC shares chat portal, but I knew where the bodies were buried in South Africa. The Mensch had significant contacts at board level.
In one of the most blatant lies I have ever encountered in a national newspaper, Cub Reporter Chris Jack asserted that King had paid off SARS to avoid criminal charges. This lying little lickspittle should not be believed on any matter unless it is supported by objective evidence, just like the subject of Jack’s wet dreams, Dave King. King was convicted of 41 criminal counts, each of which carried a two years prison tariff. King is a man of many convictions.
When one fast forwards to the Opinion expressed by Iain Alexander Scott Peebles, Lord Bannatyne – who is a Senator Of The College Of Justice and a Judge at The High Court of Justiciary and The Court Of Session – would anyone other than Chris Jack and King himself be so sentiently-challenged as to appeal? I foresically deconstructed Bannatyne’s 30 pages of findings and decision in jj passim: Two Shades Of Grey.
This was a premium content piece, ostensibly priced at £1.99 but given away free to all but a handful of recipients. It was a lot of work for little reward, just like The Sitonfence Speakeasy, which is a labour of love. Only 200 of my 10,000 to 42,000 daily readers contribute to the upkeep of our site. The overwhelming majority are freeloaders. Why should they pay when Phil Mac, Paul Brennan and James Forrest are free? For many they are in positions 1,2 and 3 in the social media premier league. The latter two are supported by advertising. Phil Macgiollabhain is reputed to earn a comfortable living from PayPal donations. His most productive source, Jim Spence, is keeping the Donegal Blogger in clover. Jim is alleged to have an ally on the board at Ibrox. There can be little doubt that The Three Amigos yield the most in revenue. I most certainly don’t begrudge them their support as without it their excellent sites would wither on the vine.
I have come to the conclusion that The Sitonfence Speakeasy is not indispensable reading. It’s not in the premier league of my peers. So be it. I guess every site has a finite lifespan.
This article will be provided free. I will receive no advertising income and as most of my readers are on vacation my coverage will be limited. Which is disappointing because as I rail against the fading of the light I’m minded to light the night sky with a dazzling piece. To go out as we all started with a Big Bang.
A useful metaphor when considering the clusterfuck of an omnishambles (my apologies to readers who have criticised my use of industrial language – would they prefer the aliterative: Incomparable Incompetence) that is Dave King, one can envisage King at the guillotine, with a masked executioner primed to unleash the finely honed blade. However at the eleventh hour there is an appeal. Would the executioner deny the condemned man a last cigarette?
An act of defiance if you will.? A stunt for pause and temporary respite? The estimable Lord Bannatyne, like The Mensch and I, saw King coming. Bannatyne could hardly state to a condemned man that smoking was bad for his health. What he did assert was a follows:
“In so far as the respondent’s argument seeks to deny contravention on the ground that it was not him but the family Trust which made the purchase of the shares in Rangers, this is an argument not open to the respondent, in that as submitted by Mr McNeill, he is seeking to reopen matters where adverse findings have already been made.The court is not acting in the context of this provision as a court of appeal. The Panel is the body who is charged with the duty of evaluating the evidence and making findings of fact.”
King has made his appeal. It was not upheld. The findings were adverse. Suck it up Grifter. The Court of Session will give the Takeover Panel teeth. Your chutzpah of an appeal is as hollow as your accountancy training. Your head is for the chop King. Your legacy is four decades of financial carnage.