Saturday, January 14, 2017

Top terror bomber bust on his way to South Africa

Top terror bomber bust on his way to SA

Saad Kindeel, the Iraqi ambassador to South Africa.

Image: Moeletsi Mabe

A bomb maker working for the Islamic State terrorist group was arrested at a Turkish airport last month as he was about to board a flight to Johannesburg.

The suspect, an Iraqi named Abu Osama, was allegedly planning an attack in South Africa.

"Our intelligence officials believe Abu wasn't coming to South Africa to recruit for IS, but to identify a specific target that would later be attacked," Iraqi ambassador Saad Kindeel told the Sunday Times.

Osama's arrest took place shortly after immigration officials at OR Tambo flagged another suspected terrorist entering South Africa from Turkey. He was originally from the US.

The two incidents have sparked concern that South Africa might be facing an increased risk of terror attacks, specifically on US-based businesses and buildings.

Mosque desecrations like terrorism‚ says Muslim group
Speaking on behalf of acting police commissioner Khomotso Phahlane yesterday, Hangwani Mulaudzi said: "We are aware of the two incidents. One was dealt with by immigration officials at OR Tambo, where a person coming from the US via Turkey was flagged and sent back to Turkey."

Mulaudzi said the incident happened on December 16.

"We are also aware of the later incident in Turkey where a person was arrested as he was about to take a flight to South Africa. Interpol confirmed the incident and we are still waiting for their full briefing," Mulaudzi said.

The incident in Turkey was confirmed this week by Kindeel.

He said Iraq had more information on the planned attack in South Africa by Osama, but he could not share this with the South African government until it had signed a memorandum of understanding with Iraq in which both countries agreed to share security information.

"I am surprised the South African government is taking its time to sign this memorandum. We are providing the information for free, which can be used to protect its citizens," the ambassador said.

State Security Minister David Mahlobo confirmed the incident at OR Tambo airport and said Kindeel had notified him about the arrest in Turkey.

"I am not delaying the signing of this memorandum of understanding. We take any terror threat very seriously. I am in the process of setting up a task team that will deal with these terror threats and interrogate the information from the Iraqi ambassador."

Mahlobo said his men had always been on high alert.

He said the man who was identified at OR Tambo airport had flown in from a country in the Middle East.

"He wasn't arrested as he didn't commit any crime in South Africa and was not wanted for any criminal activities elsewhere."

I had orders to move to South Africa through Khartoum in Sudan. I was then arrested at Ataturk airport at the end of last year.
Mahlobo said extremist groups were recruiting people with clean records so they were not easily identified.

"They are clean with no dodgy past," he said.

IS is known for extreme brutality, including the beheadings and crucifixions of prisoners.

In an interview with Sunday Times this week, Kindeel said Osama had been arrested at Ataturk airport in Turkey as he was about to board a flight to South Africa. The arrest took place late last month and Osama is being held by Iraqi officials in Baghdad.

A source in the South African security services with direct access to anti-terror investigations said: "South Africa will not be the victim of any attack, but I believe there is a risk against foreign assets in South Africa."

He said there were many IS-linked foreigners receiving training in South Africa and recruiting here for the organisation.

US embassy spokeswoman Cynthia Harvey would not comment on whether the US was aware of the arrest in Turkey or on Osama's alleged plans to launch an attack in South Africa.

"As in all cases related to intelligence matters, we are not able to provide comment on this case," she said.

She confirmed that a terror alert regarding South Africa issued last year was still in force. She said it was based on information that terrorist groups were planning to carry out "near-term attacks against places where US citizens congregate in South Africa".

Turkey arrests soldiers for 'helping terror group'
Osama's arrest was widely reported in Middle Eastern newspapers, which quoted the Iraqi federal judiciary authority.

Kindeel said Iraqi intelligence officials had told him that during interrogation, Osama had confessed to planning an attack on the US air base at Incirlik in Turkey.

He had recruited a suicide bomber for the mission. He said his next target would be in South Africa.

The Incirlik air base is also used by Nato forces and the Turkish air force. Nato has used the base for airstrikes against IS.

"Our intelligence officials believe Abu wasn't coming to South Africa to recruit for IS, but to identify a specific target that would later be attacked," Kindeel said.

He said Osama, who is an engineer, had been planning to flee Turkey after being tipped off that his cover was blown.

According to Middle Eastern news sites quoting the Iraqi federal judiciary authority, Osama told his captors that he had attended Mosul University, graduating as a civil engineer and worked with a German company that built roads and bridges in the northern Iraqi city.

He moved to Germany for a short time to continue his studies.

Following his return to Mosul, he was unemployed for a year and a half.

"Most of the companies left Mosul because they were concerned that IS extremists would occupy the city," he reportedly said in his confession.

"After IS occupied Mosul, I heard that [IS leader] Abu Bakr al-Baghdadi had called for people with expertise to join the Islamic State and I decided to join the group in one of the famous mosques in Mosul. Then we were divided to different groups."

The Arabic news site quoted the federal judiciary authority as saying that Osama told officials: "I had orders to move to South Africa through Khartoum in Sudan.

"I was then arrested at Ataturk airport at the end of last year."

The concern is, do we have to have a terror attack before we realise how vulnerable South Africa is to a terror attack from IS?"
Security analyst Jasmine Opperman, a director of the Terrorism Research and Analysis Consortium who previously worked for the State Security Agency, said the threat of an IS attack in South Africa was real.

"The call is to stay wherever you are and use whatever means available to execute an attack where you are, and that this will be seen as equally important as going to the caliphate in terms of showing your loyalty," she said. "South Africa is entering this phase."

While she had no specific knowledge of Osama's alleged plot to attack South Africa, it "sounds definitely plausible".

Information from foreign intelligence agencies, including Iraq, about terror threats to South Africa "must always be verified for credibility and reliability", she cautioned.

"But this shouldn't make us complacent. The concern is, do we have to have a terror attack before we realise how vulnerable South Africa is to a terror attack from IS?"

The Muslim Judicial Council's Ihsaan Hendricks said he could not comment "on this particular incident", but added that South Africa could not be "naive".

"I believe it [an attack in South Africa] is highly possible," he said.

If proved that Osama was planning to come to South Africa to organise an attack "we can no longer live in denial".

Saturday, January 7, 2017


No Fear No Favour No BULLSHIT...............

The Land Act of 1913 and its alternatives

This year is the centennial commemoration of what many now believe was the one Act that irrevocably put South Africa on the road to Apartheid. Few have been more outspoken about its impact than South Africa’s leader of the opposition, Helen Zille:
 The 1913 Land Act was apartheid’s ‘original sin’ because it reserved 87% of South Africa’s land exclusively for white ownership, as the basis of the ‘Bantustan’ policy. It not only dispossessed many black South Africans of the land they owned, but also sought to prohibit black people from ever acquiring land in so-called ‘white’ South Africa.
Unfortunately, history is never that simple. There is no doubt that most white South Africans, English and Afrikaners, at the start of the twentieth century believed that the majority of South Africa’s land – and perhaps even the lands of neighbouring countries – should be proclaimed as ‘white man’s land’. The demand for produce in the rapidly-expanding urban areas combined with low input costs, notably the low cost of black wages, made large-scale agriculture a lucrative enterprise. White farmers were also keen to expand and thus enter the traditional black areas with its highly fertile land. This steady expansion had only one consequence: that, eventually, all black land would have been claimed by white farmers. This didn’t happen though. Instead, a group of white officials in the Department of Native Affairs after unification noted the rapid decline in black land and realised that without statutory intervention blacks may soon own no land at all. The result: the Land Act of 1913. Here’s Hermann Giliomee in The Afrikaners (p. 326):
 They saw merit in the idea that a settlement, even if not equitable to blacks, would at least prevent further white encroachment in the reserves. In 1915 the Secretary for Native Affairs referred to a district where fewer than half of the farms formerly owned by ‘natives’ were still in their possession. As the liberal historian W.M. Macmillan pointed out at the time: ‘[Open] competition in land is fatal to the weaker race … Given free right of entry of white into native lands, the natives will presently be landless indeed.
Looking back from our current vintage point, it is easy to assume that the counterfactual to the Land Act of 1913 was a larger share of land for black South Africans; i.e. that instead of the 13%, black South Africans should have received 30%, or 50% or 80%. But what Giliomee suggests here is that that would be a wrong conclusion: instead, in the absence of the Land Act, the land that black South Africans were living on would have been systematically claimed by white settlers, leaving blacks destitute with few alternatives other than to provide their labour to the mines and as farmhands. The Land Act thus protected instead of pilfered land belonging to blacks.
SANNC delegation that went to England to convey African people's objections to the 1913 Land Act, 1914. L-R: Rev W. Rubusana, T. Mapike, Rev J. Dube, S. Plaatjie and S. Msane. Courtesy of South Africa History Online.
SANNC delegation that went to England to convey African people’s objections to the 1913 Land Act, 1914. L-R: Rev W. Rubusana, T. Mapike, Rev J. Dube, S. Plaatjie and S. Msane. Courtesy of South Africa History Online.
(So here’s a thought experiment: there was no Land Act in 1713 for the Khoi of the southwestern Cape. What if the Dutch East India Company had proclaimed 13% of the Western Cape as Khoi-land. Would Khoi-descendants living in these hypothetical areas today celebrate or abhor the 1713 Land Act? That is an open question. Instead, what happened in the absence of a Land Act was that many Khoi died in the smallpox epidemic of 1713 and those that remained had little choice but to work on settler farms, where many of their descendants still work today.)
The late Lawrence Schlemmer once said that he knows of no former colony – other than South Africa –  where the indigenous population continued to live on 30% of the region’s most fertile land after colonisation (I thank Hermann Giliomee for this reference). This is not to suggest that colonisation – or the Land Act – was morally just or defensible, or that it did not contribute to a highly unequal South African society. But before we denigrate the Land Act, we should think about the alternatives. Maybe missionary societies would have acquired some land for black farmers to till. Perhaps white farmers would not have infiltrated black areas to any great extent. But probably not. In all likelihood, black South Africans would have owned considerably less land than what the Land Act of 1913 sanctioned.
Johan Fourie's Blog

Preface Aninka Claassens, Ben Cousins and Cherryl Walker THIS VOLUME encompasses an extraordinary collection of historical and contemporary photographs that singly and collectively speak to the power of land, not only in the turbulent history of this country but also as a significant material and symbolic resource in the day-to-day lives of individuals and communities. The curators and editors have drawn together a compelling set of images of people, land and place that spans more than 100 years in the history of this region, with a focus on the century since the passage of the notorious Natives Land Act in June 1913. The title of this book – Umhlaba (Land) – is direct yet open-ended, allowing for different entry points and multiple forms of engagement with the collection’s overall themes. The history reflected here is, inescapably, one of often brutal conflict and exclusion that has left the present generation with many daunting challenges in the political, economic, social and ecological spheres. However, threaded through this familiar overarching narrative in complex, even challenging ways, are other more affirming accounts of how people have related to or been present on the land. Solidarity, productivity, creativity, spirituality, a sense of place: these experiences of land and landscape that inform the larger history also find expression in the pages that follow. The material presented here comes from many different archives. The wide range of photographers and photographic genres is, in itself, an important achievement of the curators and the team that assisted them. One of the strengths of this collection is the different genres of photography it includes, for example posed studio portraits to commemorate significant milestones in life, alongside photographs taken by activist photographers during the era of forced removals. Not only do the photographs document key events and changes over a century, they do this through different ‘eyes’, some intimate, others seemingly dispassionate. The collection embodies the ever-present tension 10 Umhlaba 1913–2013 between time passing and the immediacy of images captured in the then-present. Many of the images are deeply moving in their powerful evocation of the personal significance of land in the lives of so many South Africans, past and present. The photographic exhibition on which this edited collection is based formed part of the programme of an inter-disciplinary conference, ‘Land Divided: Land and South African Society in 2013 in Comparative Perspective’, held at the University of Cape Town in March 2013 to commemorate the centenary of the passage of the Natives Land Act. This Act, passed by an all-white, all-male Parliament just three years after the Union of South African was established, is widely recognised as foundational for the system of spatial, political and economic marginalisation that was progressively forced on black South Africans after 1910 and which found its apogee under the apartheid regime. The March 2013 conference was a joint initiative of three centres of teaching and research on land and agrarian studies in the Western Cape: the Centre for Law and Society at the University of Cape Town, the Department of Sociology and Social Anthropology and the LESA research programme at Stellenbosch University, and the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape. The aim of the conference was to use the occasion of the centenary of the Natives Land Act to provide a platform for critical reflection on not only the uneven manifestations of its legacy across space and time, but also contemporary and future challenges around land and the environment, not all of which can be attributed to this legacy. The conference was, accordingly, organised around four themes: the legacy of the 1913 Natives Land Act; land reform and agrarian policy in southern Africa; the multiple meanings of land (identity, rights, belonging), and ecological challenges. It drew together some 300 delegates – academics, community leaders, policy-makers and officials – in four days of intense debate and discussion. Delegations of rural people attended and spoke at the conference, in addition to academics, public intellectuals, parliamentarians and the Minister of Rural Development and Land Reform. They spoke about their direct experiences of landlessness and their struggles for change. Many of the key challenges facing land reform emerged clearly within their testimonies, for example, Preface Umhlaba 1913–2013 11 the way in which the Traditional Courts Bill of 2012 re-entrenched the ‘Bantustan’ boundaries that are a particularly potent and intractable legacy of the Land Act, the state’s reluctance to transfer restitution land to elected Communal Property Associations, and the absence of effective postsettlement support. The photographic exhibition on which this book is based, which opened at the Iziko National Gallery in Cape Town on 25 March 2013, was a high point of the proceedings. It gave powerful visual expression to the conference themes while challenging viewers, then and in the months to follow in Cape Town and later in Johannesburg, with previously unseen archival material and the unexpected framing of issues and juxtapositioning of images. The exhibition managed, in a way that is more difficult for academic conferences, to convey its meanings directly and personally to a wide range of differently situated people. Photography can, perhaps, be a more direct and democratic medium than words, especially those deployed at academic conferences, with all their complications of language and separate disciplines and bodies of knowledge. We were proud, as members of the Conference Steering Committee, to have collaborated with the curators of the exhibition in this way. The centenary year of the Natives Land Act presented us with a major opportunity to reflect on the significance of land, historically and in contemporary society. The legacy of this Act is still etched in South Africa’s deeply divided countryside and racialised inequalities. Yet what is also becoming increasingly apparent at the start of the third decade of political democracy in this country is that the complex intersection of social, economic and environmental issues which shape relationships to land cry out for fresh analysis and revitalised understandings. This book makes a significant contribution to this task of reflection and review. Dr Aninka Claassens is chief researcher and director of the Rural Women’s Action Research Programme of the Centre for Law and Society at the University of Cape Town; Ben Cousins is Department of Science and Technology/National Research Foundation Chair in Poverty, Land and Agrarian Studies and senior professor at the Institute for Poverty, Land and Agrarian Studies (PLAAS) of the University of the Western Cape; Cherryl Walker is professor of sociolocy and social anthropology at Stellenbosch University. Aninka Claassens, Ben Cousins and Cherryl Walker 12 Umhlaba 1913–2013 PHOTOGRAPHER UNKNOWN: Sol Plaatje, far right, with other members of the South African Natives National Congress (SANNC) delegation which travelled to London in 1914 to convey their objections to the 1913 Natives Land Act to the British government. Others are, from left to right, Thomas Mapike, Reverend Walter Rubusana, Reverend John Dube and Saul Msane. Plaatjie remained in England to fight for their cause until 1917. Courtesy of Silas T Molema and Solomon T Plaatje Collection, Historical Papers Research Archive, The Library, University of the Witwatersrand.

Wits  Umhlaba




Wednesday, December 14, 2016


No Fear No Favour No Death Threats..........

Former SABC editor Vuyo Mvoko says police have been alerted to death threats made to reporters after testifying at the inquiry.

Wednesday 14 December 2016 14:23 (SOUTH AFRICA).......

JOHANNESBURG/CAPE TOWN – Former South African Broadcasting Corporation (SABC) editor Vuyo Mvoko says the police have been alerted to death threats made to journalists after testifying at this week’s Parliamentary inquiry into the public broadcaster.
Mvoko testified on Monday alongside the so called SABC 8.
He revealed that the broadcaster’s money was used to build Gupta-owned TV channel, ANN7.
He says on Tuesday he received a death threat.
“Around 4pm or just before 5pm in the afternoon on Tuesday something saying; ‘Traitors. Protecting your white friends in parliament who started this, telling lies about your comrades – you are warned. We don’t kill blacks – but sit and watch the blood flow.’”
Members of Parliament (MPs) have expressed their outrage at death threats against journalists who this week testified before parliament’s inquiry.
When the hearings resumed on Wednesday, Chairperson Vincent Smith announced that he was informed of the threats late on Tuesday.
United Democratic Movement MP Nqabayomzi Kwankwa, read out to the committee the text message he said had been sent to him by one of the journalists.
MPs now want action to ensure members of the SABC 8 or other witnesses are not threatened further.
The African National Congress’s Makhosi Khoza says, “Anyone who is trying to intimidate our witnesses and people who are trying to assist this country to move forward (are) actually militating a total onslaught.”
While the Democratic Alliance’s Phumzile van Damme says, “It can’t be rocket science to find out where these threats are coming from – they can trace cellphone numbers…”
The committee chairperson did not say who among the group of journalists who gave evidence on Monday were threatened, or whether it was all four of them.
Smith says the threats are an assault against Parliament.

(Edited by Masechaba Sefularo)


The chairperson of the hearings has told MPs he was informed about the threats late on Tuesday.
FILE: The SABC (South African Broadcasting Corporation) headquarters in Johannesburg. Picture: AFP.
CAPE TOWN - Journalists who testified before Parliament’s inquiry into the South African Broadcasting Corporation (SABC) board's fitness for office on Monday have received death threats since testifying this week.
The chairperson of the hearings, Vincent Smith, has told Members of Parliament (MPs) he was informed about the threats late on Tuesday.
He says it is an assault on Parliament.
“Parliament must with one voice condemn any effort to subvert oversight and to subvert the deepening of democracy.”
United Democratic Movement MP Nqabayomzi Kwankwa read out one of the threatening text messages and condemned the act of intimidation.
“One of the journalists shared a text message with me. I’d like to read it to this meeting and the people of South Africa. It says, ‘Traitors protecting your white friends in Parliament has started this and telling lies about your comrades. You were warned. We don’t kill blacks, but will sit and watch the blood flow.’”
Kwankwa did not reveal which of the four journalists who testified on behalf of the so called SABC 8 received the message.
MPs have strongly condemned the threats and want an update from police on their investigation into previous acts of intimidation and harassment against members of the SABC 8.
To follow day six of the SABC board inquiry, click here.
(Edited by Shimoney Regter)
It is evident that South Africa has turned into a lawless state where friends of president Jacob Zuma will kill to protect his tarnished reputation.

Friday, December 9, 2016

Legal battles involving Sharemax far from over - BUSINESS WATCH

Legal battles involving Sharemax far from over BUSINESS WATCH
/ 13 April 2011, 09:03am

The legal minefields surrounding the collapse of property syndication company Sharemax Investments are growing. Sharemax’s attorneys, Weavind & Weavind, and Capicol, the developers of the Zambezi Retail Park and The Villa, have both launched independent defamation and damages cases.

A criminal case has been lodged against Weavind & Weavind related to the alleged illegal release of Sharemax investor funds from its trust account before the transfer of properties to the syndication vehicles.

A demand for repayment has been issued to Weavind & Weavind on behalf of 11 investors in terms of a section of the Companies Act that is normally a precursor to a liquidation application.

Claims have been submitted to the fidelity fund of the Law Society of the Northern Provinces and Attorneys Insurance Indemnity Fund, both also related to the release of funds by Weavind & Weavind.

Lurking behind the scenes is the finding by an investigation conducted for the registrar of banks that Sharemax’s funding model contravened the Banks Act. Surely at some stage someone is going to be prosecuted for this contravention?

The new board of the Sharemax group of companies also plans to seek permission from the high court for an offer of compromise in terms of the Companies Act to creditors in schemes promoted and marketed by the company.

However, it has been claimed that this planned offer was seeking to legalise an illegal act and was prejudicial to the rights of “prospective investors”.

In fact, doubts have been expressed about whether the Zambezi Retail Park or The Villa schemes had any investors or shareholders because a suspensive condition had not been fulfilled: the transfer of the properties into the syndication vehicle mentioned in the prospectuses for both of these schemes.

But can such a scheme of arrangement be applicable to investors and shareholders in the company or only creditors?

In terms of a government notice on property syndications, the money deposited by prospective investors into the trust account of Weavind & Weavind must be repaid if the syndication does not proceed.

Weavind & Weavind maintains the government prohibition on the release of investor funds for a property syndication prior to the transfer of the property is not applicable to the firm and various clauses in the prospectuses made it “abundantly clear” it was not the intention that investors funds would only be paid out of trust once the property had been transferred. However, the prospectuses also specifically state that investors funds will not be released from its trust account prior to the transfer of the property.

What then gives Weavind & Weavind the right to ignore or disregard a mandatory government notice related to property syndications?

The share and debenture certificates issued by Sharemax to prospective investors also specifically state that their “investment” would be deposited into Weavind & Weavind’s trust account and “kept there until the investment amount is processed and the property is transferred”.

Finally, an arbitration last year concluded Sharemax must pay R64 million, excluding damages, to Capicol.

This amount was due for payment by no later than March 7, but the Sharemax board has admitted it is unable to pay it. Does this not mean Sharemax is insolvent?

If so, does the rescue plan being hatched by the new Sharemax board mean the company is still trading and the directors of the company could be held liable for reckless trading?

It is obvious this saga, involving about 40 000 shareholders who have invested about R4.5 billion in property syndications promoted and marketed by Sharemax, will probably take years to resolve. page 20


The gain in employment that is evident from data releases in the past few quarters is welcome.

The modest uptick means there is still a long way to go before the hundreds of thousands of jobs that were lost during the recession are recovered, but it is nevertheless an encouraging start to what is hopefully a sustainable trend. Every bit of good news builds confidence.

Since the release of Statistics SA’s Quarterly Labour Force Survey, which showed the unemployment rate in the fourth quarter of last year had fallen to 24 percent from 25.3 percent, and the Quarterly Employment Statistics, which showed 101 000 jobs were created in the formal sector in the fourth quarter following the addition of 23 000 jobs in the third quarter and 46 000 in the second, other data have also reflected gains in employment.

The Adcorp employment index for March showed a 5.6 percent gain in employment, and there were gains in all sectors and occupations.

But it is disheartening that official statistics show the number of discouraged work-seekers is still rising, by 117 000 people in the fourth quarter, compared with the previous quarter, and by 440 000 compared with a year earlier.

There are now well over 2 million discouraged work-seekers, over and above the more than 4 million unemployed. The expanded unemployment rate remains devastatingly high at 35.8 percent.

After companies enhanced productivity, cut costs and right-sized to cope with the recession, they will now be cautious in expanding their staff complement.

Especially as there are perpetual concerns about the rand, new labour laws and electricity supply constraints, among other things. But even without these concerns greater mechanisation introduced during the recession may mean companies will not need significantly more staff even if the economy starts to really pick up.

This of course means that many people, especially those without skills, will remain in desperate circumstances.

Edited by Peter DeIonno. With contributions from Roy Cokayne and Samantha Enslin-Payne.

The runaway Ponzi scheme 'mastermind' hiding on the Gold Coast

The runaway Ponzi scheme 'mastermind' hiding on the Gold Coast
Why is a South African national accused of accruing billions of rand through a Ponzi scheme living in the Queensland suburb of Runaway Bay? South African-Australian journalist Larry Schlesinger examines the case.

In 1972, work begun to turn 182 hectares of tidal Gold Coast wetlands north of the Southport Broadwater Parklands into a canal-lined residential subdivision. Real estate developer Neil McCowan and advertising agent John Garnsey christened the new suburb “Runaway Bay”, promoting the area as a tranquil escape.

Take a stroll along the Runaway Bay marina today with its views of the Surfers Paradise Manhattan-esque skyline and bobbing yachts at berth and you might pass Barry Deon Tannenbaum, now a resident of the palm tree-lined suburb and the alleged operator of South Africa’s biggest Ponzi scheme.

When Tannebaum’s name last appeared in the Australian press more than three years ago he was a resident of Runaway Bay, having fled the South African Jewish enclave of St Ives in Sydney when news of the scheme broke. Wikipedia lists, as Runaway Bay’s only notable resident: “Alleged Ponzi scheme mastermind Barry Tannenbaum”.

In June 2009 The Sydney Morning Herald ran the front-page story: “Exposed: the Sydney man accused of a $1.5 billion scam“. But in the last three years, hardly a word about Tannenbaum has made it into the mainstream Australian media, despite new damning revelations in South Africa.

A failed attempt by the South African trustees of Tannenbaum’s bankrupt estate to take control of his Australian assets in the Queensland Federal Court in August last year also passed without mention, despite the judge noting that “substantial funds sourced from South Africa were transferred to Australian entities controlled by [Tannenbaum] and his wife”. These funds allegedly were stolen from hundreds of investors (some lost all their savings) and squandered by Tannebaum before he fled South Africa.

The moniker “mastermind” (which Tannenbaum denies) is given by none other than the South African Revenue Service in recently leaked documents published on finance website MoneyWeb. The documents reveal he owes nearly $80 million in taxes, interest and penalties as part of undeclared income earned when he allegedly perpetrated one of the biggest corporate frauds in South African history.

According to SARS, Tannenbaum under-declared his income between 2004 and 2009 by 444 million rand ($47 million) and now owes 747 million rand ($79 million) in tax, penalties and interest. By investigating Tannebaum’s 26 bank accounts, SARS discovered inflows of 3.91 billion rand ($415 million), of which 3.05 billion rand ($324 million) was paid out to “investors” and “agents” in the scheme. Over this five-year period Tannenbaum paid tax of just 142,000 rand ($15,000).

The money in these bank accounts is only a fraction of a purported 15 billion rand ($1.5 billion) accrued through an alleged Ponzi scheme that drew in 378 investors in the close-knit South African Jewish community by encouraging them to invest in Frankel International (of which Tannenbaum was the sole trustee), which traded under the name Eurochemicals.

Investors were enticed with offers of very high returns by allegedly forged purchase orders to supply the active ingredients for anti-retroviral drugs (used in the treatment of HIV and AIDS) to drug company Aspen Pharmacare — this in a country with one of the highest HIV infection rates in the world. One purchase order was said to be for 700 million rand ($74 million) — denied outright by Aspen.

Adding credibility to the scheme were two things: firstly, the Tannenbaums were a well-known, wealthy and respected Jewish family in South Africa; secondly, they have a deep connection to the local pharmaceutical industry — Barry Tannenbaum’s grandfather Hyme was the founder of South Africa’s largest over-the-counter pharmaceutical company, Adcock Ingram, now owned by Tiger Brands. The Tannenbaums sold their stake in the business in 1978. Frankel Chemicals was subsequently founded in 1983 as an intermediary in the supply chain of drug compounds.

Between 2004 and 2009, Barry Tannenbaum, as director of Frankel, is said to have engaged the services of a number of high-profile businessmen in South Africa as “agents” — the original investors in the scheme and at the top of the pyramid — to sell the idea to other investors that they could more than double their money by making short-term (eight to 12 weeks) advances for the purpose of enabling the purchase and importation into South Africa of pharmaceutical ingredients.

In a Ponzi scheme the early investors are paid dividends from investments made by later investors, rather than from any actual profit earned by the company. I know of friends in South Africa induced to invest who lost all their savings. The sense of Tannenbaum’s betrayal of their trust remains palpable since the story was broken by South Africa’s Financial Mail in July 2009.

The SARS investigation, which drew in all the major South African government institutions and auditors at KPMG, came to the conclusion that: “Tannenbaum was indeed the mastermind and operator of this illegal multiplication scheme.”

Following the article in the SMH and other Fairfax papers in June 2009 as well as the ABC, Tannenbaum professed his innocence, claiming in a letter to the press that “categorically” he was not “sitting with millions”. “I have not amassed some fortune that I have spirited away, and in due course an audit will bear out this statement, if people are still interested in hearing the truth,” he said before all but disappearing from the public eye. No audit has ever been carried out to clear his name.

In January 2010, the last mention of Barry Tannenbaum in the Australian press appeared when Fairfax ran a story about him fleeing St Ives for Runaway Bay. It was reported soon after an arrest warrant had been issued for Tannenbaum by the South African police. The short piece said he had fled “a stuffy little office above a strip of shops around the corner from his St Ives home” only to “pop up in the Surfers Paradise suburb of Runaway Bay”.

As an Australian resident since mid-2007, Tannenbaum has received the full legal protection of the Australian judiciary system. In August last year, the Queensland division of the Federal Court declined an application by the South African trustees of Tannenbaum’s bankrupt estate to administer and realise any assets he had accrued in Australia. The ruling was made on the basis that South Africa was not the “centre of the debtor’s main interests”, as he had “severed all ties” with the country of his birth.

The Australian court documents confirm what is known in the SARS investigation — that Tannenbaum raised $390 million between 2004 and 2009. Of this vast sum, just 0.05% was on-loaned by Tannenbaum for the purpose of purchasing pharmaceutical ingredients. According to the court documents, 44.8 million rand ($4.78 million) was used by Tannenbaum for personal transactions, “with a substantial portion being spent on gambling”.

He transferred US$31.7 million into an account held by Bartan Group Pty Ltd (Bartan — shortening of “Barry + Tannenbaum”), an Australian incorporated company, with an ANZ bank account, now in liquidation. Of this money, US$14 million was transferred into other entities controlled by Tannenbaum or to persons associated with him. The sole shareholder of Bartan is another Australian incorporated company, Bardeb Nominees Pty Ltd, with shares held solely by Tannenbaum and his wife, Deborah. Bartan was wound up by an order of the Supreme Court of New South Wales on March 9, 2010.

The Federal Court court documents note that a report issued about Bartan’s affairs in April 2010 was “noteworthy for its paucity of information concerning the affairs of that company” but does include assets of $586,523 (made up of $150 in cash with the balance being investments in two other entities) and contingent assets of some $21 million.

During the court case, Tannenbaum claimed he had assets of less than $8000 and just $1700 in the bank while his liabilities where $90,000 on his credit card, an $85,000 loan from “friends” and a $185,000 vehicle finance lease. Judge Logan remarked:

“It may very well be that his decision to quit South Africa was inherently bound up with a desire not in the future to be dealt with under the law of that country in respect of his involvement in the scheme described and a related desire to enjoy the benefits of proceeds repatriated to Australia. It is not necessary in this proceeding conclusively to determine whether or not or to what extent he has enjoyed the proceeds but there is no doubt on the evidence that substantial funds sourced from South Africa were transferred to Australian entities controlled by he and his wife.”

Tannenbaum declined to reveal his Queensland address, claiming he did not have a permanent home, directing the court to a Sydney solicitor. According to SARS, the money Tannenbaum earned was paid into various companies of which Tannenbaum was either a director or member — nine registered in South Africa and five in Australia, including the Bartan Group and Frankel International.

*This article was first published at Larry Schlesinger’s blog Freshly Worded

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