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STATUS CAPITAL ‘DEFRAUDED’ E100M

By KWANELE DHLADHLA | 2023-12-03

Status Capital Building Society (SCBS) has a strong conviction that Dave Van Niekerk and his associates, intentionally and fraudulently siphoned E100 million that had been invested by Emaswati without neither approval nor active involvement of the society’s management.

These allegations were contained in an affidavit deposed by SCBS Compliance and Legal Officer Sanele Kunene in a court application filed before the High Court of South Africa (Gauteng), where Status Capital seeks an order for liquidation of Status Asset Management (SAM), an asset manager which invests funds on behalf of investors, such as the applicant.

Status Capital, whose Chairman is Wandile Mtshali, invites members of the public to invest their hard-earned earnings and retirement savings in exchange for earning relatively high-interest rates on their investments.

The society offers high rates of return on safe and secure investments at minimum risk.
The applicant generates its income from lending the invested funds to other members of the public at more favourable interest rates. Its profit is the difference between the investment and lending interest rates.

Kunene explained that Status Capital had appointed SAM to manage its funds and to protect the funds against the devaluation of African currencies and subject thereto that a minimum of 50 per cent of the applicant's investment capital had to be invested in Eswatini.

He mentioned that once Status Capital’s online business lending business in Eswatini picked up, the applicant would be entitled to withdraw the funds invested through SAM and grow a portfolio directly in Eswatini.

However, Kunene claimed that to date, the money that had been invested in Status Capital has not been forthcoming from SAM despite several demands.

From 2019 until May 2021, Kunene claimed Viljoen- one of the role players involved in managing affairs of Van Niekerk’s companies at the time- was involved in disbursement of funds from Status Capital’s bank account, and it was common cause that the funds were disbursed to various companies linked to Van Niekerk.

Kunene went on to allege that the modus operandi of Van Niekerk and his associates and the companies linked to them, which include, but not limited to; Aluma Capital, Claymore Procurement Solutions, Fintegrate, Swaziland Debt Factoring Firm and Status Management Services, was basically to set up enterprises in African countries, to use the local enterprises to solicit funds from members of the public and then to get the local enterprises to re-invest again in enterprises they control.

“Using the re- investment enterprises, funds invested by innocent members of the public are channelled out of the local country and hidden away through a series of further transactions.
“Using the different companies and inter-company loans or inter-loans or securities are not repaid,” alleged Kunene.

Kunene submitted that it would be just and equitable to liquidate SAM because it was established for a fraudulent purpose and operated unlawfully and illegally.
“SAM forms part of a fraudulent scheme Van Niekerk and his associates established,” Kunene emphasised.

When it comes to the just and equitable grounds of liquidation, Kunene said it was also important for the SA High court to bear in mind that the investments made by the applicant with SAM were unlawful and illegal. He insisted that SAM and the role players involved knew this.

“Despite the aforesaid knowledge, SAM refuses to repay the applicant's capital and interest.
“This reveals that the only way the funds can be recouped and those responsible can be held accountable is by using the insolvency mechanisms,” Kunene alleged.

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Kunene stated that it was also important to draw the court's attention to the notion that although SAM allegedly put up the property known as the Fintech Campus as security for repayment of Status Capital investments, yet SAM was not the owner of the property and security offered by SAM was claimed to also be fraudulent.

“The property put up as security by SAM is in fact owned, through complex legal structures by Van Niekerk. This fraudulent conduct of Van Niekerk and his associates is another reason why it would be just and equitable to liquidate the SAM,” said Kunene.

Kunene informed the court that it would also be to the advantage of creditors if SAM was placed under liquidation and liquidators were appointed to investigate its affairs and realise its assets to the benefit of creditors.

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