Nedbank vs. Motala (2)
Barry Sergeant
Posted: Mon, 07 Mar 2005 09:13 | © Moneyweb Holdings Limited, 1997-2005
The recent liquidation of Rossair Contracts has once again pitted Nedbank, a subsidiary of financial services group Nedcor, against Enver Motala, a liquidator.
Rossair Contracts, a civil aviation company operating out of Lanseria, north of Johannesburg, filed for bankruptcy on February 2. Motala was not among the names of liquidators appointed to the Rossair Contracts estate on February 9.
Motala then launched an unsuccessful campaign against the Masters Office, which appoints liquidators. The Distributive, Catering, Hotels and Allied Workers Union (Dichawu) had originally nominated Motala as its representative for members affected by the Rossair Contracts bankruptcy.
On March 1, Dichawu launched an urgent application in the Pretoria High Court; in the result, the court ordered that Motala be appointed as an additional liquidator to Rossair Contracts. One Welcome Dolphus Mbalo, apparently secretary-general of Dichawu, signed the main affidavit filed with the court.
Within the Rossair Group, Rossair Contracts was by far the most attractive target for a liquidator, since its estate is worth an estimated R93-m, against a mere R5-m value for Rossair Aero Workshops. In his affidavit signed February 25, Mbalo stated unashamedly and falsely that Dichawu represents “34 employees” of Rossair Contracts.
Dichawu sued 10 respondents, including the Masters Office, and the duly appointed liquidators to Rossair Contracts. Nedbank, major creditor to Rossair Contracts, was not sued and did not put in an appearance at the hearing. Willem Kruger, Nedcor head of legal services, explains that “we have been made aware that Enver Motala was appointed by the court as a liquidator in at least one entity in the Rossair Group as a result of this application.
“As a major creditor we are concerned about the process and circumstances surrounding this appointment and we are considering addressing the Master of the High Court on this issue.”
To those familiar with the Rossair Contracts case, Nedcor’s apparent hesitancy in becoming more directly involved has come as some kind of a surprise. During January 2004, Nedbank laid a multi-tiered complaint against Motala with the Masters Office in Pretoria.
The complaint dealt with numerous prima facie irregularities in respect of the liquidation of Kort Beleggings CC, a closed corporation in which Motala was sole member. Kort owned three adjacent properties in downtown Middleburg, Mpumalanga, where Motala lived for a number of years in the 1990s.
Motala operated a number of businesses in and around the town; most went successively bust. The Middleburg properties continued to dog Motala and he placed Kort in voluntary liquidation on September 11, 2003. This information only reached Nedbank, Kort’s only secured creditor, on or about December 12, 2003.
Nedbank’s first serious complaint was that the Kort file was never referred to the Master’s panel for an appointment. Nedbank was also unable to locate the name of Kort on the so-called 48-hour list, which informs all liquidators, in a public manner, of a new liquidation. This list is the bread-and-butter of all liquidators.
Instead, it was clear from papers that the Master’s Office in Pretoria appointed one Norman Simon as sole provisional liquidator of Kort, before expiration of the 48 hours. Nedbank, however, was unable to find any record on the Master’s Office computer that any appointment of a liquidator was ever made to Kort.
Nedbank’s most serious problem was that Simon, like Motala, was a shareholder in, and director of, SBT Trust, based in Rosebank, Johannesburg. Simon lodged a mandatory certificate of “non-interest” in respect of his appointment as liquidator of Kort.
Nedbank complained that the certificate, dated September 12, 2003, was “worrisome” and was “patently in error” because first, both men had a common interest in SBT. Second, Motala was surety (on the Kort property) to Nedbank; he should have settled as far as possible any claims made by Nedbank against Kort. Third, Motala was party to the voluntary liquidation of Kort.
According to other filings in the Kort case, Nedcor Bank, the parent of Nedbank, was creditor to Kort in an amount of R3,9-m. Despite standing as surety for Kort, Motala was claiming R2,6-m from Kort. Nowhere was it clear how Kort’s alleged liability to Motala arose.
Nedbank was patently aggrieved that Simon approached it for support (liquidators require a nomination from at least one creditor to stand in line for a possible nomination as a liquidator), which Nedbank agreed to in good faith. When Nedbank discovered the fuller set of facts on December 12, 2003, it “withdrew all support due to the patent clash of interest.”
Nedbank tried without success to obtain the files to the Kort liquidation. It met with no success until January 16, 2004, until which date the file had been “sequestered.” As to creditors’ meetings, the first one on November 21 was attended no one, as nobody had been informed of the meeting. The second creditors’ meeting, on December 18, was also not attended by anyone. The law provides that it is an offence if the liquidator (evidently, Simon) or member (Motala) does not attend such meetings.
The outcome of the Kort case is yet to be made public. The outcome of the Rossair Contracts case remains a moveable feast.