Sloan Financial Group of Durham, N.C. has filed a lawsuit against a former employee charging him with breach of contract, committing fraud and conspiracy, and embezzling funds while he managed The New Africa Opportunity Fund, a $120 million private equity fund that was introduced in 1997.

The suit was filed Feb. 26 in the County of Durham State Superior Court and named as defendants Justin Beckett, former executive vice president of Sloan, as well as Beckett's wife Dorika Mamboleo and several other key employees.

The lawsuit alleges that Beckett, who was the CEO of New Africa Advisers, one of Sloan's wholly-owned subsidiaries created in 1993, conceived of and received government approval to form the New Africa Opportunity Fund. Beckett also was president and CEO of New Africa Management, a separate unit set up specifically to manage the fund, the suit said.

The private equity fund initially amassed $40 million from among several limited partners including Citicorp of New York, SunAmerica of Los Angeles, and Northwestern Mutual Life Insurance Company of Milwaukee, the suit said.

In the course of managing the private fund, Beckett and his associates abused their positions by making secret deals with or extorting money from the small, often start-up African companies the fund invested in, the suit said. They lavishly spent the fund's management fees on office furnishings and excessive salaries and bonuses and even created a secret company based in Mauritius which took over the day-to-day operation of one company in the portfolio, the suit said.

When Sloan discovered the misdeeds last year, the limited partners were notified and a replacement management team was put in charge of the equity fund, the suit said. Beckett was forced to resign and his business associates were terminated, the suit said.

Sloan alleges that the illegal acts by Beckett and his employees resulted in New Africa Advisers suffering financial losses in excess of $1.5 million, and a tarnished reputation which resulted in the firm's loss of a commitment to manage a second private African equity fund which would have brought the company $7 million in future management fees.

Sloan, which was founded in 1986 by Maceo Sloan, along with its two investment management company subsidiaries, also sub-advise mutual funds. None of the fund companies for whom it is a sub-adviser are implicated in the suit.

Calvert-Sloan Advisers, a 50/50 partnership between Sloan Holdings, a Sloan affiliate, and Calvert Group of Bethesda, Md., was the investment adviser to the $4.1 million Calvert New Africa Fund. The fund, created in April 1995, was the first to invest in countries across Africa. New Africa Advisers, the wholly-owned subsidiary of Sloan Financial, was one of two sub-advisers of the Calvert fund.

But the fund may soon cease to exist. The Calvert New Africa Fund is likely to

be merged into another fund if shareholders give their approval later this month. In December, the Calvert fund's board voted to merge the fund into a newly-registered fund, the Calvert South Africa Fund, which will have a narrower investment mandate but still be invested according to Calvert's usual socially-responsible screens.

Calvert will be the adviser to the new Calvert South Africa Fund. The new fund will be sub-advised by Reinvest South Africa of Philadelphia as well as by African Harvest Asset Manager Ltd. of Newlands, South Africa.

NCM Capital Management, another of Sloan's investment management subsidiaries, sub-advises the $1.2 billion Dreyfus Premier Third Century Fund and the $1 billion Dreyfus Socially Responsible Growth Fund, according to Patrice Kozlowski, a Dreyfus spokesperson.

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