Page 96 - SARB: 100-Year Journey

86
The £85 000 theft
In 1929, Governor Clegg reported at the annual general meeting that an amount of £85 000 had been stolen by a Note Clerk at the Johannesburg Branch. The Governor’s Agent (branch manager) at the branch was Alec Burns. Stockholders were provided with a summary of what had transpired. In short, the uncovered fraud had gone undetected for two years, between 1927 and 1929.
The theft was discovered when Burns went on leave and was temporarily replaced by a colleague from Head Office. The stockholders were further informed that the culprits had suffered consequences, including demotion with a reduction in salary, dismissal and criminal charges that resulted in a prison term. News of the theft made it to the press.
A fuller account The characters
A closer reading of the incident reveals some of the early days of financial crime in a city that was already a fast-growing finance and investment hub. The fraud was a scheme that involved Burns, one Arthur Montagu Sturdy, one James Rennie Aldred, and a stockbroking firm called McLachlan & Bernstein.
Burns, 49, had joined the Bank at its inception in 1921 following a recommendation from the Treasury, where he seemed to have had an unblemished career for the previous four years. He was described as thorough and conscientious.
Sturdy, 42, had previously been with the Bank of England for 12 years before moving to South Africa to take up farming, a career detour that proved disastrous. He applied for a post at the fledgling Bank and was appointed in 1922. In 1925, he was appointed Chief Clerk at the Johannesburg Branch. He was described as a person of ‘excellent character’.
Aldred, 32, had joined the Bank in 1925 from the National Bank. What was not known at the time of his appointment was that he was bankrupt, a red flag that all banks look for before making an appointment. It also transpired during the investigation that Aldred was a poor performer, and his new role at the Bank came as a relief to his previous employer for they would be rid of him. He was appointed First Clerk at the Johannesburg Branch.
Extract from the minutes of the SARB Board meeting held on 12 April 1929 detailing the ‘defalcation at the Johannesburg Branch’. /SARB