Former Chemspec chief executive officer Strath Wood, accused of “fleeing the country to avoid his debts” two years ago, is facing sequestration.
Wood returned to Durban from the US this week, apparently to sort out his financial affairs, and was served with a Durban High Court application lodged by International Financial Advisors (IFA) and Kuwait Investment Company, who are owed more than R3 million.
The companies want a trustee to be appointed to probe the true state of Wood’s financial affairs and how it was that he and his wife, Kathleen, emigrated to Medina, Ohio.
They also want him sequestrated “to ensure he is disqualified from acting as a director of companies in this country”, the companies’ attorney, Greg Larson, says in an affidavit filed with the court.
The matter was placed on the roll earlier this week, but was removed. Wood’s attorney, Gary Rademeyer, confirmed the application was being opposed.
Wood did not respond to an e-mail from The Mercury. In June 2011, The Mercury reported that Wood, who had resigned as head of the JSE-listed company, had left South Africa and, allegedly, a trail of debt.
His former colleague, attorney David Randles had sued him for 10 million Chemspec shares, which he said Wood had promised him as an incentive to join Chemspec. This matter is to be heard later this year.
Wood’s attorneys at the time, Shepstone and Wylie, launched court proceedings to recover fees. The Mercury understands that this claim has been settled.
Wood also owed R3m, as well as interest and legal costs, awarded to IFA in a judgment by Pietermaritzburg High Court Acting Judge Julian King, who said Wood had “lied and fabricated evidence” in the case in which IFA accused him of buying 25 million shares on its behalf, selling them and pocketing the money.
A few days later Wood, citing ill health, resigned as Chemspec’s chief executive.
Larson, in his affidavit, said that in April 2011 the sheriff tried to serve a writ of execution at Wood’s known residence in uMhlanga, but the house had been “abandoned”, stripped of everything, including light fittings, skirtings and mouldings. Only a fridge, without its doors, and a microwave were left. This was “a classic case of a debtor fleeing the country to avoid his debts”.
A second writ was then served on Wood personally at his attorney’s offices, but he did not pay anything.
When the uMhlanga property was auction-ed, it yielded only about R1m because of an outstanding bond. IFA is claiming the balance, and interest at 15 percent a year, backdated to 2005, and R1.4m for legal costs.
Larson said Wood had made an offer in June 2011 to pay IFA half of what he owed “in full and final settlement”. This attempt to “compromise the capital debt” amounted to an act of insolvency, as did Wood’s removal of assets to another jurisdiction.
He said he did not know Wood’s full financial position “as this is not a friendly sequestration”, but Wood’s financial affairs needed to be investigated to find out what had become of IFA’s money and how he was running his family trust, which remained a shareholder of Chemspec.
Larson said he had discovered that Wood was a serving director or had resigned as a director of about 29 companies and close corporations and, through “convoluted holdings”, had substantial property interests, including the Chemspec land valued at about R141m.