* Says found himself in financial predicament
* Says time will show had defrauded no-one
* Lawyers target South African assets (Adds Aspen CEO, FNB comments)
By Marius Bosch
JOHANNESBURG, June 12 (Reuters) - South African businessman Barry Tannenbaum, accused of defrauding hundreds of investors in what may be the country's biggest corporate fraud, denied any wrongdoing and blamed his company's woes on the economic crisis.
"As has happened with other companies that have from time to time found themselves in a financial predicament, particularly in the present climate, I have found myself in such a situation," he said in an e-mailed statement on Friday.
Tannenbaum, who lives in Australia, said he had defrauded no-one and described accusations against him as wild allegations, speculation and conjecture.
"In short, the hype at this stage is such that whatever I say, will be disbelieved. Time will demonstrate that I have defrauded no-one," Tannenbaum said.
But Ian Levitt, representing investors who had put around 400 million rand ($50.01 million) into Tannenbaum's operation, said he had secured a temporary court order a week ago for the sequestration of the businessman's assets in South Africa.
"He is in all essence a sequestrated person, the estate has been sequestrated. We are in the process of gathering as many investors as possible so that we can get an urgent appointment of a liquidator who can then take charge of (the) assets," Levitt said.
Tannenbaum was said to have lured investors with the promise of 200 percent annual returns linked to pharmaceutical imports and was accused of forging AIDS drug orders to give reassurance when money started to dry up.
HUNDREDS AFFECTED
Lawyers and investigators have said hundreds of investors, including top businessmen from South Africa, the United States, Germany and Australia, were affected.
The case would rank as South Africa's biggest corporate fraud and has shocked the country's business community. Investigators say up to 10 billion rand may be involved, dwarfing previous financial fraud cases in the country.
Levitt said criminal charges will be laid and legal action will also be taken in Australia to freeze Tannenbaum's assets in that country.
In documents lodged in court for the sequestration application, one investor said he was shown a list of investors including "numerous well-known and astute businessmen", some of whom had invested over 30 million rand with Tannenbaum.
Levitt said action was also planned against Tannenbaum's agent in South Africa, Dean Rees, a lawyer who now lives in Switzerland. Rees did not return calls to his Swiss and South African mobile phones.
Tannenbaum operated through his Frankel International and Frankel Chemical Corp companies and says in brochures his father was a founder of South Africa's No. 2 pharmaceuticals firm, Adcock Ingram. Adcock said it was his grandfather who helped found the company.
Documents posted on the Internet by Investigator Specialised Services Group, a private law enforcement agency hired by investors to look into Tannenbaum, include what it said are forged purchase orders from Africa's biggest generic drugmaker, Aspen, which Tannenbaum allegedly used to show investors funds were coming soon.
Both Adcock and Aspen confirmed they had bought small amounts of supplies from Frankel, but said the purchase documents, including some involving life-prolonging anti-retroviral AIDS drugs, were fake.
"Aspen has transacted with Frankel and Frankel International, but has not undertaken business with Eurochemicals Pty Ltd -- Frankel SA, Frankel Enterprises and Frankel Asset Management," Stephen Saad, Aspen's CEO said in a statement late on Friday.
"Aspen will co-operate, without restriction, with all statutory investigating authorities and comply with all legal requirements relating to this matter," Saad said.
Tannenbaum's bank RMB, a unit of FirstRand Ltd, told Reuters it was working with authorities on an investigation and would not comment further.
(Additional reporting by Gugulakhe Lourie and Serena Chaudhry, Editing by David Holmes)
($1=7.998 Rand)