Wool Over My Eyes

The Starfields, a well-respected family in Johannesburg, had a large shareholding in Woolworths thanks to Joan Starfield s father who founded the company. Family funds were invested in the yarn brokerage Texchange, created by Ken Rosenthal, a lifelong family acquaintance. The growth of Texchange was remarkable, profit rocketing by nearly 1000 per cent in ten years. But when refinancing was sought, the business was revealed as a massive fraud. The level of deception perpetrated by Rosenthal was staggering. Astoundingly, Texchange continued despite annual checks by auditors and banks. Rosenthal didn t use the money for anything other than for the trappings of a successful CEO. This is a cautionary tale of business fraud that turned on the same Ponzi principles later used by Bernie Madoff: using a good name and paying returns to investors with their own money! This story that should strike fear in the heart of every investor.