Ornate gates and a 24/7-manned guardhouse cauterise the wealthy residents of this exclusive stretch of Illovo’s 5th Avenue from the rest of the world. But closed gates could not protect Karen Brouze from the enemy within – her allegedly abusive and philandering maybe-billionaire husband David Brouze.
Despite his much-denied great wealth, businessman David keeps himself out of the public eye. But in private, the former head boy of King David High School, who turned 47 on February 6, leads a colourful lifestyle now that he’s departed from Karen and number 32 5th Avenue. He’s got his new R20-million bachelor pad in Joburg’s Hyde Park, a R30m Cape Town holiday apartment at Clifton, a Ferrari and – so his about-to-be ex-wife claims – a brand new 21-year-old squeeze. All essential accoutrements in the billionaire’s desperate pursuit of his long-lost youth.
David is a chartered accountant and non-executive director (and former chairman) of the JSE-listed Austro Group, a leading supplier of woodworking equipment and cutting tools to the construction sector.
He married Karen, now 41, in December 1993, out of community of property but – and this is crucial to our tale – subject to accrual of estates. They separated in July 2010 and have three children: two teenagers and a two-year-old.
David’s story
Our marriage has broken down irretrievably and there is no prospect of the restoration of a normal marriage relationship between us. Karen is psychologically unstable, she suffers from mood-swings, she’s been under the care of a psychiatrist and psychiatric medication has been prescribed for her.
She suffers from an eating disorder, is emotionally cold and has never encouraged me in my work endeavours. Throughout the marriage she bought clothing which she never used which remained in packets in her cupboards. She bought large quantities of food, a great deal of which was thrown away.
There was hardly ever a meal at the dining-room table; the food served was always cut up, plain with no sauces or flavouring; Karen did not sit down, and normally ate at the stove. Very few friends visited over the years.
After… [the youngest child] was born I noticed Karen repeated herself continuously. She was continually crying and going up and down the stairs; she was out of control. For the first eight months of the baby’s life Karen hardly touched her.
This period was extremely traumatic for all of us, especially for [the two teenage children]. Whenever Karen went near the teenage boy, he’d move away. and the teenage girl became more and more distressed, depressed and withdrawn.
As a result of the psychotic episodes Karen had – she contended that pizza boxes were flying around and that pictures were flying off pizza boxes – Weil [clinical psychologist Dorianne Weil] diagnosed her as psychotic. The following eight months were chaotic. Karen would be irrational. She would run down the driveway naked.
Karen’s story
David and I separated from one another during July 2010. He vacated the matrimonial home and encouraged the two older children to go and live with him in the home he purchased for approximately R20m. Despite us being married out of community with an accrual, he has persistently failed to account for the accrual of his estate…
(The accrual system works like this: Say that on marriage the wife’s estate consists of a house valued at R300, 000 and the husband’s estate totals R1m, when they divorce 10 years later, the wife’s house has increased in value to R500, 000 and her husband’s estate has increased to R20m. Her estate has accrued by R200, 000; his by R19m. The couple’s total accrual: R19.2m. Divide by 2 = R9.6m. To balance things up, deduct the R200, 000 of her accrual – and he has to give her R9.4m. If, as Karen Brouze believes, her husband’s estate has soared to as much as a billion rand during their marriage, she stands to win a fortune on accrual.)
…In this regard he seems to think that he is above the law, despite him having signed an antenuptial contract in which the accrual system was included.
If I ever suffered from mood-swings or was emotionally cold, it was as a direct result of his conduct towards me. The only reason why David has not instituted [divorce] action or allowed me to do so is that he wants to finalise the financial aspect without having to calculate the accrual and settle the matter before the action is instituted.
Whilst I concede that our marital relationship has broken down irretrievably, I deny each and every one of the grounds as set out by David for the breakdown of our marriage.
It is noteworthy that, despite the marriage relationship having broken down, David having taken a new 21-year-old girlfriend, and bought a R20m apartment for himself, he has not instituted divorce proceedings.
I have always encouraged him to succeed. He, however, is not prepared to share the details of such success with me, but I do know that he has made large amounts: in the region of R300m when he sold a share of Busby to Ethos; R50m when he listed Austro Engineering and approximately R200m when he sold his shares in Sentula.
A major contributing factor to the breakdown of our marriage was David’s serial philandering tendency. He has conducted adulterous affairs. I do not suffer from any eating disorder and have never received any treatment for any eating disorder. David has attempted to vilify me and illustrate that I suffer from various obsessions and psychological, psychiatric and psychotic disorders. Most, if not all of these attributes, pertain to him. The only treatment that I ever received was for post partem depression after the birth of our youngest child. It was of short duration and does not impact in any manner upon my ability to be a good mother.
David is a manipulative liar. He sees no wrong in anything he does and believes that he can rule the world. In his own little world he thinks that he has already accomplished this. This has had a financial advantage in that he is extremely wealthy. Yet in private he acts in a very infantile manner, still sucking his thumb and insisting on spending breakfasts with his mother for extended periods of time. He is furthermore absolutely obsessed with his physique, always trying to look younger so that he can impress younger women and physically pushing himself to the limit. David further suffers from a gambling disorder. I have numerous receipts for large amounts cashed at Monte Casino and other local casinos.
He contends that [one of the older children] is in grave danger as a result of my reckless and irresponsible behaviour. I question what position he considers [the two teenagers] to be in [they live with David in his R20m Hyde Park bachelor pad] when he is in an intoxicated state and initiates drunken brawls or remains out until 3am with his young girlfriends.
David has attempted to alienate my older children from me by playing psychological games with them. He has ridiculed, belittled and assaulted me in front of the children. He then attempts to buy their love by over-indulging them with money and other gifts. In their presence, he has poured a goldfish bowl – with fish inside it – over my head, thrown plates at me and violently and viciously assaulted me.
The background
The foregoing comments and allegations about each other are extracted from affidavits filed by David and Karen Brouze in the South Gauteng (Johannesburg) High Court in December, when David brought an urgent application for access to his youngest child over the Christmas holidays.
The application signified an end to a “ceasefire” during which members of both families had sought to negotiate a David-inspired, mediated “overall settlement”. Foremost in these negotiations was Karen’s brother-in-law Monty Seligman and David’s brother Keith Brouze (chief executive of leather goods group The House of Busby).
Last July David reported “significant strides” in resolving the matrimonial issues on a mediated basis in a two-day meeting with Karen’s then-attorney, Alick Costa of Werksmans. Towards the end of September, a settlement proposal including financial terms agreed between David’s brother and Karen’s brother-in-law, was produced. David signed it, after making “certain changes”.
“Foremost in my mind was the deleterious effect opposed litigation would have on the family,” says the billionaire in court papers.
However, in Karen’s view the proposed settlement was a cynical attempt by her husband to avoid the accrual factor becoming an (expensive) issue for him in their pending divorce. On November 16, she refused to sign and settlement discussions were terminated. Within 48 hours she had fired her attorney at Werksmans, Alick Costa (His bill came to more than R1.3m, excluding VAT).
Karen now had a new attorney, Sandton corporate lawyer Ian Levitt. And this new team set to work attempting to discover the extent of David’s assets (see box).
Despite their conclusion that the man is a billionaire, Karen observes in her affidavit that “David has on occasions tried to assure me and my advisors that he is insolvent”.
After she refused to sign the settlement, relations between Karen and her two older children deteriorated.
“David alienated them from me because I did not sign the agreement,” says Karen in her affidavit. She accuses her husband in court papers of being behind an SMS she received from her eldest on November 16, demanding her to reconsider the “peaceful” settlement way and telling her to stop communicating with him unless she did so.
Just days before Karen refused to sign, psychologist Dorianne Weil who had been acting as mediator in the settlement talks urged her in an email: “Do not allow yourself to get into a fight. I cannot tell you more strongly that I believe you are making a huge mistake if you decide to go that route. I fear greatly that even if you come out with added zeros, you will compromise your relationship with your children in the process.”
After the settlement talks were terminated, the following exchange took place during a taped phone call:
Karen “David has manipulated my children. They are actually intimidated by him and he’s done the same to you, the same to me, the same to my legal team. I actually will not be bullied by him anymore, honestly, and he’s used my children as soldiers in his war.”
Weil “If you think he’s used them as soldiers now, you ain’t seen nothing yet.”
First round in the resumption of hostilities was fired by David. On December 8 he brought an urgent application in the South Gauteng High Court, seeking extended access to their two-year-old over the imminent Christmas holiday.
On November 25, Karen’s attorney Ian Levitt wrote to David’s attorney Graeme Greenstein informing him that Karen intended spending 27 days at Plettenberg Bay — at the Beacon Island/Riverclub hotel — at a cost of R72,313. The plan was that the two teenagers would join them for a week (at an additional R17,000 for their room), and Karen would need an additional holiday allowance of R1,500 a day (total R40,500) for “entertainment, etc.”. With flights (R9,804) her expenses would total R139,617. Levitt requested an undertaking that David would pay for this.
Greenstein replied on December 2, saying David did not agree to the Plettenberg Bay holiday, but that he would arrange for suitable accommodation for Karen and their youngest child to spend the holiday in Cape Town, so that the child could visit him for two periods of four nights over the three-week stretch. If this was not acceptable, an urgent court application would be launched. The attorney added that Karen’s actions in ceasing the mediation and negotiated-settlement route were perceived by her husband as “reckless”.
On December 6, attorney Levitt responded: “We remain unaware of the extent to which your client’s estate has accrued, which is required to enable us to determine whether or not any settlement negotiations conducted thus far have been bona fide or fair. The utilisation of the children as pawns in the process indicates that such negotiations were not bona fide. You are requested to refrain from utilising the children in the negotiations pertaining to the accrual of your client’s estate, and the amount to which our client is entitled.”
Karen, however, was now prepared to divide her Christmas holiday between Hermanus and Cape Town. In Hermanus, accommodation at the Sheraton Arabella would be acceptable; the Radisson, in Cape Town. David should pay all accommodation and flight costs in advance, plus R12,000 a week for Karen. She rejected David’s requested two four-night access periods to their youngest child.
The following day Greenstein replied with David’s final demand for access periods. Should Karen not agree, the urgent court application would proceed.
It was an impasse and David duly issued his urgent application the following day, December 8.
In his replying affidavit David declares that his wife’s “volumes of pages on my financial affairs and a schedule of my alleged assets and liabilities” are “completely irrelevant”. Karen was “more interested in financial aspects than the best interests of the children”. David maintains: “The fact remains that we are married out of community of property. Whether our marriage is governed by the accrual system is not relevant to this application.” Allegations regarding a 21-year-old girlfriend (which are not admitted) were also “not relevant”.
David denies ever assaulting his wife. He admits he takes care of his appearance but that “this does not amount to an obsession” and “there is no crime in having breakfast with my mother occasionally”. The billionaire concedes he goes to casinos from time to time, but denies he has “a gambling disorder”.
When the matter came before Judge Majake Mabisela in the South Gauteng High Court on December 14, he dismissed the application, saying it was not urgent and that David Brouze had had ample time to negotiate his youngest child’s holiday arrangements over the preceding months.
Although he lost the court battle, David did get an opportunity to see his youngest child over Christmas. Outside the court Karen’s counsel Laurence Hodes SC, gracious in victory, approached David’s counsel Ross Rosenberg SC and suggested that Karen would agree to reasonable visiting rights over the holidays. That evening the matter was resolved: the toddler could visit David in Clifton for three periods of two nights each.
By then, however, the couple had spilled the details of their torrid marriage and the accrual battle in open court for the public record — allowing all the plebs of the world a rare glimpse at just how care-free marriage can be when you’re really rich.
- Court testimony regarding the Brouzes’ children has been excluded from this report.
JUST HOW RICH IS DAVID BROUZE?
Just how rich is David Brouze? Here, from court papers filed by his wife Karen, is her best estimate of Brouze’s assets at July 15, 2004:
Listed shares:
House of Busby Ltd: R21.4m
Local equities: R5m
Business stakes:
Austro Group – Equity: R30m
Austro Group – Loan a/c: R15m
Vered Estates: R12.5m
Digital Planet (13.3%): R1.5m
Brixton & Eland Furn (25%): R10m
Savannah Dancer, 50%: R0.5m
Property:
32, 5th Avenue, Illovo: R5m
Brofam Properties: R3m.
Total: R103.9m. Liabilities nil.
(House of Busby and Brixton & Eland Furnishers are listed as trust assets but even if assets of the David Brouze Family Trust are excluded from the accrual of David Brouze’s estate (in terms of clause 5 of their antenuptial contract), David Brouze’s net worth back in 2004 was R72.5m.)
In her affidavit, Karen Brouze states:
“It’s highly unlikely that his net estate will have decreased during the last six years, unless he has elected not to acquire assets in his own name but rather in the name of the David Brouze Trust or the other trusts.”
On top of the old R103.9m list, Karen Brouze and her legal team have dug up more of David Brouze’s past and present assets. These, she claims, include:
More assets:
- Brouze’s new bachelor pad at Unit 8, 89 Upfil Road, Hyde Park: R20m;
- Stanlib Wealth Management Classic Investment Plan: R100m;
Direct and/or indirect shareholdings in and claims against:
- Classic International Impex Holdings (Pty) Ltd (which holds or held an investment in Investec International Money Market Fund) – value approximately R60m;
- Findon Investments Shareblock (Pty)Ltd (registered owner of the Clifton holiday home) – value approximately R30m;
- 107,408,695 shares in Austro Group Ltd valued at approx R51.5m;
- 1,038,351 Kaydav Group shares valued at approx R31m, through:
Peregrine Equities – 81,984,696 shares, - Classic International Impex – 2,237,000 shares,
- Katzgold — 19,613,458 shares;
- Claim on loan account against Amrod (Pty) Ltd: R30m;
- Various bank accounts and trading accounts of which David Brouze is the beneficial owner/has access to and/or controls at Investec Private Bank Johannesburg, Peregrine Securities Ltd Johannesburg, Standard Bank of SA Johannesburg, Insinger London, Goldman Sachs London and Barclays Bank London.
- 1/11th share in Hillside Lodge, Madikwe;
- A fractional ownership in Pezula, Knysna;
- An (unknown) amount owing by Jonny Novick;
- Transfer of R16m from Ideal Holdings (Pty) Ltd to David Brouze’s Standard Bank account;
- An investment David Brouze has or had in his name with the Israel General Bank Ltd, Tel Aviv;
- In May 2004, R11.5m was paid into Brouze’s Investec bank account – proceeds of his repurchase from Global Opportunity Income Fund Class B;
- The same month a further R15.5m went into the same Investec account – proceeds of Brouze’s repurchase from Global’s Income Fund Class A;
- US dollar transactions: $9.1m as at October, 2004;
- An unknown interest in an entity known only as Elemental, situated in Australia;
- 25% of certain funds held in Berwich International Investments;
- Around November 1999, David Brouze led a consortium that acquired a large number of shares in Frame Group Holdings – Brouze alone held 7.5% of Frame’s issued share capital, says his wife. This resulted in a change of control and a change of Frame’s name to Furnex Capital Ltd. Brouze subsequently sold his Furnex shares, states Karen Brouze, for “a substantial sum”;
- Brouze was the beneficial owner of Busby Ltd quoted shares. When the company delisted from the JSE some 18 months ago, claims Karen Brouze, her husband benefited by more than R300m;
- Sale of Sentula shares: R200m.
The full list clocks up to more than R1,000,000,000 – not counting the several unknown amounts – making David Brouze, at least on paper and by his wife’s calculations, an extremely comfortable billionaire.
Concludes Karen Brouze in her affidavit: My husband has, during the marriage, built an empire of assets, both in his own name and in the name of trusts. He has created a vast, intricate, complex web of companies in his name and trusts within South Africa and in foreign countries.
