Tuesday, October 25, 2016

NPA surprised by court challenge in Gordhan case

NPA surprised by court challenge in Gordhan case

Freedom Under Law and the Helen Suzman Foundation have gone to court to challenge the fraud charge against Minister Gordhan.

NPA Finance Minister Pravin Gordhan SARS

Stephen Grootes | about 6 hours ago 25/10/2016

JOHANNESBURG The National Prosecuting Authority(NPA) says it is surprised that Freedom Under Law and the Helen Suzman Foundation have gone to court to challenge the fraud charge against Finance Minister Pravin Gordhan.

It says the institution had already told the two organisations that NPA head advocate Shaun Abrahams has asked investigators to clarify some details, before making a final decision on whether the prosecution will go ahead.

The two groups have strongly criticised the NPAin their papers suggesting an ulterior motive could be behind its decision.

The NPA's Luvuyo Mfaku says that Abrahams received the submissions from former Sars commissioner Oupa Magashula and his former deputy Ivan Pillay last week.

He decided then to order that some outstanding issues be addressed related to the investigation, before he can make a decision on the matter.

Mfaku says this means that those submissions may result in the case not going ahead.

If this happens it could mean the challenge from the two groups is premature.

Meanwhile, chief executiveof Goldman Sachs Colin Coleman says it's important to support the Finance Minister at this time.

You know we have ratings agencies reviewing South Africas sovereign credit rating in the next couple of months. We have been working extremely hard on our economic growth which has been low. We hope we are starting to improve our democratic institutions which were trying to defend.

Eighty-one CEOs, including Coleman, have backed Gordhan ahead of his medium-term budget speech this week, saying theyre against politically motivated prosecutions.

The 81 CEOs who signed the pledge were:

Altron: No name provided

Anglo American: Mark Cutifani

AngloGold Ashanti Limited: Srinivasan Venkatakrishnan

Asisa: Leon Campher

Aspasa & Sarma: Nico Pienaar

Aveng: Kobus Verster

Bain & Company: Vittorio Massone

Barclays Africa: Maria Ramos

Bid Corporation: Brian Joffe

Blue Label Telecoms: Mark Levy

Business Unity South Africa: Khanyisile Kweyama

Business Leadership South Africa: Thero Setiloane (on behalf of member companies)

Black Business Council: Mohale Ralebitso

Bowman Gilfillan: Robert Legh (chairperson)

Capitec Bank: Gerrie Fourie

CEO Initiative: Jabu Mabuza (convenor)

Chamber of Mines: Roger Baxter

Credit Suisse South Africa: Rick Menell (chairperson)

Dimension Data Middle East & Africa: Grant Bodley

Discovery Limited: Adrian Gore

Distell Limited: Richard Rushton

ENSafrica: Michael Katz (chairperson)

Exxaro Resources Limited: Mxolisi Mgojo

FirstRand Bank: Johan Burger

Goldman Sachs: Colin Coleman

Growthpoint Properties Ltd: Norbert Sasse

Hollard Group: Nic Kohler

Imperial Holdings: Mark Lamberti

Independent: Michael Spicer

Investec Bank Limited & Investec: Stephen Koseff

Johannesburg Stock Exchange: Nicky Newton-King

Kagiso Tiso Holdings: Vuyisa Nkonyeni

KPMG Southern Africa: Trevor Hoole

Liberty Holdings Group: Thabo Dloti

Life Healthcare: Andr Meyer

Lion Pride Investment Holdings Ltd: Geoff Rothschild

Mediclinic SA: Danie Meintjes

Menston Holdings (Pty) Ltd: Stanley Subramoney

MMI Holdings: Nicolaas Kruger

Mondi Group: David Hathorn

Mr Price Group Ltd: Stuart Bird

MTN SA: Phuthuma Nhleko (chairperson) and Mteto Nyati (CEO)

Murray & Roberts Holdings Limited: Henry Laas

Nampak Ltd: Andr de Ruyter

Nando's: Geoff Whyte

Naspers: Bob van Dijk

Nedbank Group: Vassi Naidoo (chairperson)

Nedbank Group: Mike Brown

Netcare: Richard Friedland

Northam Platinum: Paul Dunne

Old Mutual: Bruce Hemphill: Dave Macready and Ralph Mupita

PG Group: Charles Bromley

Pick n Pay Stores: Gareth Ackerman (chairperson)

Pioneer Foods Group Ltd: Phil Roux

Primedia: Roger Jardine

RCL Foods: Miles Dally

Remgro Finance Corporation: Jannie Durand

Reunert: Alan Dickson

Richards Bay Minerals: Mpho Mothoa

RMB Holdings and RMI Holdings: Herman Bosman

Rothschild: Martin Kingston

Safika Holdings: Moss Ngoasheng

Sanlam: Ian Kirk

Sappi Limited: Steve Binnie

Sasol Limited: Bongani Nqwababa & Stephen Cornell

SEIFSA: Kaizer Nyatsumba

Shell Downstream South Africa: Bonang Mohale

Sibanye Gold: Neal Froneman

South32 Limited: Michael Fraser

Spar: Graham O'Connor

Standard Bank Group Ltd: Ben Kruger & Sim Tshabalala

Sun International: Graeme Stephens

T-Systems South Africa: Gert Schoonbee

Telkom SA Limited: Sipho Maseko

TFG: Doug Murray

The Banking Association South Africa: Cas Coovadia

Tower Property Fund Ltd: Marc Edwards

Twinsaver Group: Garth Towell

Webber Wentzel: Christo Els (Senior partner)

Woolworths Group SA: Simon Susman

Woolworths Holdings (Australia): Ian Moir

Monday, October 17, 2016

Moneyweb closer to access Nova shareholder register- SHAREMAX.

Monday, 17 October 2016

Moneyweb closer to access Nova shareholder register

Ryk van Niekerk

Moneyweb is another step closer to accessing the shareholder registers of the three companies that today own and manage the erstwhile Sharemax Investment Properties, in which more than 33 000 people (mostly elderly) invested R4.5 billion.

The Constitutional Court denied the directors of the three companies leave to appeal against an earlier Supreme Court of Appeal (SCA) ruling and order them to pay Moneyweb’s legal costs. This ruling found that a company cannot refuse anyone access to its shareholder register after a proper application in terms of Section 26 of the Companies Act. The SCA further proclaimed that Section 26 gives the applicant an unqualified right to access the register and that the motive for seeking access is irrelevant.

Dominique Haese, CEO of Nova, argued in the application for leave to appeal that the Bill of Rights should allow a company to refuse access under certain circumstances, and that the motive for accessing the registers “may” be relevant if the information will be used unlawfully.

The Constitutional Court did not agree and dismissed the application as “it lacks prospects of success”.

Read the full Constitutional Court judgement here.

Read Haese’s affidavit here.

More than three years ago

This judgement follows Moneyweb journalist Julius Cobbett’s original application to access the shareholder registers of Nova Property Group Holdings, Frontier Asset Management and Centro Property Group in terms of Section 26 of the Companies Act in July 2013 – more than three years ago.

The directors of these companies vehemently denied Moneyweb access alleging that Cobbett and Moneyweb waged a vendetta against the directors and that the information will be used unlawfully to defame them.

There is immense public interest in this case as the registers will reveal who the shareholders of the companies that now own and manage the ex-Sharemax properties are. The investors in the Sharemax scheme were actually shareholders in the properties they invested in, but after the scheme failed, the properties were consolidated into Nova with the overwhelming number of investors becoming debenture holders in Nova.

Frontier and Centro provide management and support services to these properties.

Cobbett and Moneyweb’s application should reveal who now owns these properties.

With the announcement of the scheme of arrangement in 2011, the executive directors of the Sharemax group, Haese, Rudi Badenhorst and Dirk Koekemoer held 43.2% of Nova’s issued shares. Haese, Badenhorst and Koekemoer are now directors of Nova. Connie Myburgh is the fourth Nova director.

This Constitutional Court judgement is not only a victory for the 33 000 investors, but also for the media as Section 26 is aimed at allowing journalists to quickly and easily gain access to companies’ shareholder registers.

The three companies will have to pay Moneyweb's legal costs for both the SCA and the application for leave to appeal to the Constitutional Court.

Haese and Myburgh did not respond to emailed questions prior to publication.

( Moneyweb )

Daily Maverick sent questions to the Hawks and the NPA with regard to the following cases:

On Wednesday September 21, Daily Maverick sent questions to the Hawks and the NPA with regard to the following cases:

the Denel tender fraud (R3-billion),

Prasa tender fraud (involving about R4-billion),

Mbombela stadium tender fraud (R1.2-billion),

Nelson Mandela funeral fraud (at least R5.9-million)

SAA Fraud (R246-million),

the Tannenbaum Ponzi fraud (R12.5-billion),

the Sharemax fraud (R4.5-billion),

Transnet tender fraud (R50-billion),

Eskom tender fraud (R4-billion)

SAPS 2010 accommodation case (at least R47-million),

Mpumalanga security tender (R7-billion) ,

the Durban Municipality tender fraud (R1.3-billion),

the Bossasa Correctional Services fraud (R378-million), and
the State Security slush fund (around R1-billion)

Klopper, Orthotouch appeal to SCA a delaying tactic

Monday, 17 October 2016

Klopper, Orthotouch appeal to SCA a delaying tactic

Ryk van Niekerk

The application for leave to appeal to the Supreme Court of Appeal (SCA) by the business rescue practitioner of the failed Highveld Syndication (HS) companies, Hans Klopper, is not in the interest of historic HS investors. The application, as well as a similar application by Orthotouch itself, is only aimed to delay and frustrate investors who are bringing a class action against property tycoon Nic Georgiou.

Klopper is also less than truthful in his answers to several Moneyweb questions regarding his application to the SCA, as they do not mirror the arguments he set out under oath in his affidavit in support of the application.

These are the views of attorney Jacques Theron, head of the legal team acting for the management committee of the Highveld Syndication Action Group (HSAG), the group that wants to have the scheme of arrangement approved in 2014 set aside and to institute the class action to recover their investments from Orthotouch and Georgiou.

The HSAG is in the process of challenging the legality of the controversial scheme of arrangement and instituting a class action suit against Georgiou and Orthotouch. They will also be defending the applications of Orthotouch and Klopper.

Klopper said over the weekend that there seems to be "a misconception" that his role as the business rescue practitioner is to protect only the interests of investors in the various companies and more particularly those who support the so-called class action. "I am of the view that this perception is incorrect as a business rescue practitioner’s duty is to balance the interests of all relevant stakeholders, which include the company itself, employees, organised labour, creditors and shareholders."

Klopper added that "whilst we have been told that there are many investors who support the class action and who identify themselves with the Highveld Syndication Action Group, there are also thousands of investors who do not support the class action and whose interests I need to acknowledge as equally important. I therefore repeat that as my duty remains to balance all of these groups of interests it need not be specifically spelled out in an affidavit. l was in (any) event advised at the time that the issue of the protection of investors’ information was already contained in Mr Kleovoulou’s affidavit."

Klopper refers to an affidavit of Panagiotis Kleovoulou, a director of Orthotouch, which forms part of Orhtotouch's SCA application for leave to appeal.

Read Klopper’s affidavit in support of the application to the SCA.

Read the affidavit of Panagiotis Kleovoulou, a director of Ortotouch.

Theron was also unhappy with Klopper's answer to a previous Moneyweb question as to why he brought the application. Klopper said to Moneyweb he launched the application to, in essence, protect the private information of investors.

Theron said this is “absolute nonsense”. “Protection of private information was never an issue, and still is not an issue - even in his current (16-page) affidavit to the SCA.”

In reaction , Klopper said he did not deal with this issue in his affidavit, as Kleovoulou referred to this in his affidavit. "There was therefore no need for me to also deal in my affidavit with my obvious duty to balance the interest of affected persons as opposed to only act in the interest of one group".

Theron also said that Klopper only offers technical or procedural reasons as to why the order should not have been granted. “Nowhere does he deal with the merits of the granting of the order. He does not even try to give one reason why this order is not in the interest of the investors, or even not in his own interest. Klopper is clearly out to delay matters and to frustrate the investors who are bringing the class action.”

Friday, October 7, 2016

Docufile called to court to answer questions over fire that destroyed thousands of bank documents

No Fear No Favour No more CORRUPTION.........

Posted 04 October 2016

Category Securitisation

Document storage company Docufile is being summonsed to court to explain what happened in the fire of 2009 when possibly hundreds of thousands of documents, many of them mortgage bonds, were destroyed. Docufile's parent company, Iron Mountain, has had its own share of bad luck with fires, raising suspicions at least some of these were deliberate. 

Thousands of South Africans whose mortgage bond documents were destroyed in the Docufile fire of 2009 will at last get some answers to the questions they have been asking of Absa and other banks.

Executives from Docufile are being subpoenaed in a trial in the South Gauteng High Court next month to answer questions about how a fire could have happened in what is considered one of the most fire-proof facilities in the country. Docufile, it turns out, is owned by US-based company Iron Mountain, which has a curious history of fires in its facilities (read below).

When Kevin Radford of Germiston, Johannesburg, was summonsed by Absa in 2012 for defaulting on a home loan, he asked the bank for a copy of his mortgage bond.

The bank replied that the document had been destroyed in the famous Docufile fire of 2009, along with possibly hundreds of thousands of other such documents. Docufile runs a document storage facility in Midrand (where the fire took place) which is used by Absa and other banks to store vital documents. Nedbank and other banks are also known to have lost documents in this fire.

Since then, in possibly thousands of cases, Absa has been relying on recreated, unsigned mortgage bonds which it presents to the courts as similar to the original. There is no way to test the truth of this, since the originals – by Absa’s version of events – were destroyed in the fire.

This argument was smacked down two years ago in the Joburg High Court when Absa was seeking summary judgment against two clients, James Grobbelaar and Kevin Jenzen. Justice Roland Sutherland ruled against the bank, arguing that Rule 18(6) of the court rules requires a plaintiff to produce the relevant documents when seeking to press their case. Absa had not done so. “There is no doubt that a failure to annex the loan agreement constitutes non-compliance with this rule,” said Sutherland.

Radford thought this fire a bit suspicious – and a tad too convenient for Absa, should anyone in the bank want to conceal evidence of its securitisation activities. Radford’s case is going to trial in the South Gauteng High Court on 2nd November 2016, and Docufile’s CEO Dave Hughes will be subpoenaed to give evidence.

Others to be subpoenaed include the JSE, Strate, the Reserve Bank, Absa, the Registrar of Deeds and other document warehousing companies. This is going to be an interesting trial which may – at last – answer questions about the securitisation practices of SA banks. Securitisation is the practice of bundling loans of similar type together and selling them on to investors. This has the advantage for the banks of freeing up capital to make further loans, so they can repeat the process.

The CEO of Docufile has refused to cooperate with Advocate Douglas Shaw, who is representing Radford, pleading client confidentiality. But that protection will fall away in the witness box. Docufile has so far ignored questions put to it by Acts Online (and we’ll come back to that in a minute). When asked what information Joburg Emergency Services had on the fire, Nana Radebe of Joburg City Council replied she “could not get information on the incident”.

Docufile claims on its website to have robust systems in place to detect fire well before it spreads. Shaw will no doubt want to find out how these systems failed in the fire of 2009. He will also want to know whether Radford’s mortgage bond was among the documents destroyed, and how many other Absa clients had their documents destroyed and what has happened to the electronic copies the bank is required by law to maintain.

The Registrar of Deeds can at last explain how, when an estimated 30% of all mortgage bonds in SA are securitised, less than 1% of these appear to have been endorsed to the new owners. Shaw and a team of investigators conducted a search of more than 600 mortgage bonds, expecting about 30% of these to reflect the new owners at the Deeds office, as is required in terms of law. They found just one out of the 600 reflecting an owner different than the bank, suggesting the banks are indeed securitising loans, but not reflecting the change in ownership (which is what they are required to do when securitising).

Shaw says a reasonable conclusion from this is that many of the securitised assets trading on the JSE are “empty shells” with no or fraudulently reported assets. Executives from the JSE, the Reserve Bank and Strate will be called to the witness box to explain whether these assets are real and, if so, how they know this. Until now, ratings agencies that provide credit ratings for these securitised instruments say their brief does not include looking at the authenticity of the underlying assets, ie. the mortgage bonds.

There is widespread suspicion that the fire of 2009 was deliberate. One of the questions put to Docufile (and which remains unanswered) is whether there was evidence of arson. Whether deliberate or not, the fire would have been immensely convenient for the banks attempting to foreclose on homeowners, particularly where the loans have been securitised. It has allowed them to fudge the issue of locus standi, pretending they remain the legal owners of the mortgage bonds when these in fact would now be owned by someone else. Shaw argues that this is potentially the biggest fraud in SA banking history.

When challenged on securitisation, the banks have been arguing in court that even if the mortgage bonds had been securitised, this involves a simple cession. But the Reserve Bank rules state otherwise: securitisation is an outright sale of an asset. In any event, cessions must also be registered in the Deeds Registry according to Section 16 of the Deeds Registries Act.

A global epidemic of document storage fires

Earlier this year a company called Iron Mountain out of the US acquired 75% of Docufile. Iron Mountain, one of the world’s major documents storage companies with 1,100 facilities in 37 countries, has itself an unfortunate history of fires.

Last year Argentinian news outlet Tele Sur reported that Argentine authorities are investigating a possibly deliberate fire in which documents from major financial institutions were lost – documents that contain information about economic fraud committed in the country. 

One of the big losers in this case was banking outfit HSBC which, it turns out, was one of Iron Mountain’s biggest clients globally. HSBC Argentina has been accused of tax fraud, tax evasion and money-laundering in a scheme that includes thousands of Argentine citizens transferring funds of up to US$3 billion to HSBC’s Geneva branch.

Iron Mountain itself has also been under investigation for money-laundering activities, according to the Buenos Aires Herald.

Tele Sur goes on: “After a police analysis determined that the fire that burnt down two warehouses belonging to the Iron Mountain company in Buenos Aires in February 2014 was intentional, several questions about the links between the company and its clients and also with the Buenos Aires City government have been raised.

“The Financial Information Unit of Argentina is investigating a conspiracy between Iron Mountain and its major clients - international financial companies such as banks HSBC, BNP Paribas and JP Morgan - to destroy documentation involving economic crimes, by causing a fire in the company’s warehouses.

“According to José Sbatella, the head of the Unit, ‘They have come to justify the lack of documentation by saying they lost it in the fire. However, this does not explain why these companies have not filed any lawsuits against Iron Mountain for this.’" 

The Buenos Aires Herald reported last year that the fire was deemed to be arson following a forensic review. 

According to Associated Press, in 1997, Iron Mountain's document warehouse in New Jersey was damaged by fire. In 2006, the company's London warehouse was totally destroyed by fire. According to an Iron Mountain spokesman, the cause of the fire was never discovered. However the London Fire Brigade blamed arson.

Also in 2006, a fire damaged part of Iron Mountain's Ottawa, Canada storage facility. And, in 2011, Iron Mountain's document warehouse in Aprilia, Italy suffered a fire.

These, bear in mind, are considered among the most fire-proof facilities in the world.

Which of course fuels suspicions that these fires are deliberate and are intended to destroy documentary evidence of banking fraud.


Radford has put out a call for whistleblowers with knowledge of the fire, or of securitisation malpractice or fraud, to come forward. Whistleblowers are protected by the Protected Disclosures Act. Anyone with knowledge of the 2009 fire is urged to contact crushbankdebt@gmail.com.