One of the most complex insider trading trials ever in South Africa, involving the collapse of Saambou Bank six years ago, commenced in the Pretoria High Court on Monday when two of the bank’s senior officials pleaded not guilty to 13 charges.

Saambou’s former director for personal banking, Charles Edwards and Gerhardus De Clercq, who was the general manager of Saambou Bank’s group finance and later of strategic alliances, pleaded not guilty to ten charges of fraud, one of theft and two of contravening the Companies Act, involving about R640-million.

Edwards and De Clercq’s co-accused, former chief executive director of Saambou Bank and Saambou Holdings, Johan Myburgh, died of cancer in December last year.

Saambou was South Africa’s seventh largest bank before its collapse in 2002 after investors lost confidence and withdrew more than R1-billion of their savings.

The men are accused of preventing information on the failing financial status of Saambou Bank and Saambou Holdings being disclosed to shareholders, depositors and investors.

Their arrest followed a lengthy investigation by the Directorate of Special Operations, culminating in a 6000 page forensic report, and a decision in 2005 by the National Prosecuting Authority to charge the accused.

Chief prosecutor Danie Dörfling told the court the trial involved matters of such extreme financial complexity that the charges could only be properly understood and considered in their proper context after the court had heard all of the evidence.

He said the state would over a number of months present evidence on the accused's involvement in financial transactions pertaining to a number of financial structures created within Saambou Bank, financial transactions pertaining to these structures and the recording of these transactions in the financial records of Saambou Holdings and Saambou Bank, in a manner which the state contended was criminal.

"Offences included dishonesty, fraud and theft, and breach of statute"

"The accused are charged with 13 counts, with either one or two alternatives to a number of these charges. The offences included dishonesty, fraud and theft, and also offences dealing with the breach of statute.

"...The State will seek to prove that the accused conducted the business of Saambou Bank in a reckless manner, that they concealed or made false entries in the books, financial records and financial statements of Saambou Bank and Saambou Holdings and that they gave financial assistance in respect of the purchase of shares of Saambou Bank in contravention of the provisions of the Companies Act," he said.

Although Edwards gave no explanation of his plea, De Clercq handed in a statement in which he denied any wrongdoing, claiming he was only doing his job and following the instructions of his superiors.

He said he was never a director of either Saambou Bank or Saambou Holdings, was merely an employee of Saambou Bank and had never taken part in any decisions about the implementation of the schemes referred to in the charge sheet.

According to De Clercq, the decisions regarding the implementation of the schemes had already largely been taken before he joined Saambou Bank. He added that the directors had at all times acted on expert advice, including attorneys and senior advocates.

De Clercq denied contravening the Companies Act or ever acting in a fraudulent or reckless manner.

The trial continues before Judge Willie Van der Merwe. The accused are out on R50 000 bail each.

Sapa