South African insurer Old Mutual has suffered a defeat in the Supreme Court of Appeal after the firm paid out R32m ($4m) worth of pension fund assets to the fund's parent company.
The Bloemfontein court granted the appeal of the Corporate Acceptance Finances (CAF) pension fund which claimed that the multinational insurer had breached its contract with the fund, resulting in losses in excess of R32m.
Tony Mostert, attorney for the Johannesburg-based fund claimed that in 1994 the insurer had paid out almost the entire pension fund to Corporate Acceptances & Finances (Pty) Ltd which then used the money to finance other companies within the Korsten family group.
Initial indications are that the insurer will be liable to pay R80m from which the Mostert will deduct his recoveries to date of approximately R13m plus interest.
By Janet Du Chenne
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