Friday, January 28, 2011

Cowan fraud battle hots up

Cowan fraud battle hots up
January 25 2011 at 11:58am
By Tania Broughton


Colin Cowan

Businessman Naren Pattundeen has launched a vigorous counter-attack against Garlicke and Bousfield after the law firm obtained an interdict against him two weeks ago.

Pattundeen, who claims R5-million he placed in trust with Garlicke and Bousfield through disgraced attorney Colin Cowan was “misappropriated”, now accuses some of the firm’s directors of authorising the transfer of his money out of the trust fund.

And, he claims in his counter-application to set aside the interdict, some of the directors must have been aware of Cowan’s bridging finance scheme because they signed letters of undertaking which were given to investors.

But the directors insist they were also Cowan’s victims and he misled them into believing they were signing authority for legitimate commercial transactions.

The matter was adjourned in the Pietermaritzburg High Court yesterday by acting Judge Philip Nkosi. It will now be argued in early March and, before then, both sides are expected to file more papers.

Details of the Cowan’s crimes were exposed late last year when he shot himself, admitting in a suicide note that he had stolen money - believed to be in the region of R190-million - from clients.

The firm’s directors, in a paid-for advertisement last year, said “apart from the Cowan transactions”, its trust account had been given a clean bill of health by auditors.

They distanced themselves from Cowan’s actions, saying he was not authorised by the firm to give undertakings to people investing in his own scheme and that they were completely unaware of his “illegal activities”.

Pattundeen, who owns Palm Stationary Manufacturers, in a letter of demand to the firm, said his R5-million was not an investment, but was to be held in trust as a guarantee for the purchase and development of three pieces of land.

He learnt after Cowan’s death that the day after he deposited the money into the firm’s trust account, it was “illegally” transferred to another account in the name of Espro Capital, a company owned by (former Italk Cellular owner) Bebinchand Seevnarayan.

When Pattundeen threatened to attempt to wind up the firm, the directors secured an interim interdict to stop him, insisting the firm was not liable because the money was “part of Cowan’s investment scheme”.

The firm said any winding-up application, even if unsuccessful, would cause it irreparable damage.

Pattundeen now wants the “drastic and draconian” interdict set aside and in his affidavit before the court, he accuses the firm of not disclosing all the facts including that directors Brian Jennings and Craig Jones signed the authorisation for the transfer to Espro.

Roy Eckstein, former owner of Reebok and now director of Topspec Investments, and Shoayb Joosub, of Anglorand Derivatives, have put up supporting affidavits and documents which, Pattundeen says, show the firm’s directors “were aware and actively participated in Cowan’s separate investment business”.

Eckstein says he entered into short-term bridging finance transactions with the firm which gave him letters of undertaking signed by Cowan and “various directors such as BS Jennings, SL Collier and JC Jones”.

Joosub said Cowan had said the investments were “no-risk property related transactions” and the money would be retained unencumbered in the firm’s trust account.

In an affidavit filed yesterday, Garlicke and Bousfield director Yvonne Boden says Jennings and Jones both believed the payment to Espro was legitimate.

“None of the directors (of the firm) was involved in Cowan’s investment business. They believed that the transactions they sanctioned were legitimate.

“All that the affidavits of Ekstein and Joosub illustrate is that certain directors were misled by Cowan into believing that the undertakings which they were being asked to sign related to legitimate commercial transactions. They had no knowledge that the undertakings related to his unauthorised investment scheme.”

Boden said Pattundeen’s claim that he was not aware of Espro Capital was “hardly credible” because Seevnarayan was his former business partner and was related to him by marriage.

She said Seevnarayn had also submitted an affidavit for Pattundeen but had withdrawn it and Ekstein had also attempted to withdraw his.

She said documentation would show that Pattundeen had previously given Cowan money to invest and that he intended to earn interest on the R5-million, which would not be possible if it sat in the trust account.

Both sides are expected to file further papers before the matter is argued in early March. - The Mercury


  1. No remorse....!
    You can see that this MF is a con artist!

  2. These directors should be held personally responsible and stripped of all their own property & assets under the Anti Corruption Act.
    What about a charge of laundering money as well.
    How much of this stolen money has been transferred to off shore accounts?

  3. Investors are after Sharemax’s legal firm
    22 Oct 2010

    The attorney acting for Sharemax’s investors, Kobus Schabort has sent a letter of demand to Weavind & Weavind demanding that it repays R1,55-million to 11 investors who deposited money into the firm’s trust account.

    The deposits were paid to be part of The Villa property syndication but construction of this centre has been halted after Sharemax stopped paying funds to the project developer, Capicol.

    Weavind & Weavind has 21 days to respond to the letter of demand and Schabort says that should he not get a response then he would initiate legal proceedings to liquidate the legal firm.

    He says that the investors first had to execute a claim against Weavind & Weavind before making any claims against the fidelity fund of the Law Society of the Northern Provinces.

    Sharemax has apparently raised billions of rands for development of the 30 property syndications it has been involved in over the past 13 years but last month the Registrar of Banks stepped in and appointed statutory managers to manage the repayment of funds to investors from its syndications after the Sharemax funding model was found to contravene the Banks Act.

    Weavind & Weavind has been identified as the attorneys acting for the property syndication scheme in the prospectuses issued for The Villa and Zambezi Retailer Park. However, these properties have apparently not been transferred to the syndication vehicle. The withdrawal of funds from an attorney’s trust account is prohibited unless the properties have been transferred.

  4. sue these MF at the law firm they signed the documentation and were negligent! You cant trust anyone even if they are lawyers !!!! Question everything ....

  5. This law firm sounds very unprofessional would not surprise me if the directors and associates start leaving this firm in their droves .... mud sticks !!!