Frankel International and Frankel Chemicals claimed to be importing active pharmaceutical ingredients (API) for use in the manufacture of generic medicines and sought investment in the business.
However, it is alleged that some documents shown to investors were forged. Aspen, Adcock Ingram and Sandoz told the Financial Mail that although they had conducted some business with Frankel the size of the deals was much smaller than shown on the documents.
Copies of the allegedly forged documents are available online, with one showing an R15.1m ($1.9m) contract with Adcock. The document is on Adcock letter headed paper and is signed but the company has questioned its validity, with Jonathan Louw CEO at Adcock, saying: "We don't even procure diphenhydramine for our critical care business."
These allegations were raised after Frankel failed to pay investors, who then ordered an audit of the company. SSG Forensic Consultants, a privately owned law enforcement agency, has been hired by the investors to investigate the case.
At the centre of the allegations is Barry Tannenbaum, founder of the investment fund and son of a founding shareholder of Adcock, whose lawyer has denied the claims.
Before flying to Australia to see Tannenbaum he told South African media: "I categorically deny that Barry Tannenbaum is involved in a fraudulent Ponzi scheme or has committed any fraud. I am unable to tell you whether he may have been an unwitting or unwilling participant.”
Dean Rees and Daryl Leigh, lawyers from Johannesburg, are also alleged to have been involved in the investment fund. Rees denies knowledge of fraudulent activity. Leigh has refused to comment “at this stage”.
The allegedly forged documents can be found here .