Durban - The purchase of two helicopters and a catamaran and the “disappearance” of assets worth R38 million in four years are some of the issues that former Chemspec chief executive Strath Wood will have to answer to if he is finally sequestrated.
Wood, already under provisional sequestration, claims to be a man of straw, but the court-appointed trustee who has done a preliminary investigation into his affairs has now accused him of shielding millions in two “sham” trusts.
Wood is accused of fleeing South Africa, leaving behind a trail of debt.
He lives in Ohio and claims to own nothing, saying there is no point in a final order of sequestration being granted.
But trustee Kurt Knoop – appointed last November after a provisional sequestration order was granted in the Durban High Court, in an application brought by International Financial Advisors (IFA) – believes differently.
He has urged the court to grant the final order against Wood and his wife, Katherine, saying it would be to the benefit of creditors, which included Chemspec and a former director, David Randles.
Wood left South Africa in 2010, citing ill health as the reason for his resignation from Chemspec, but it coincided with a finding by a judge in the IFA matter – which involved his buying 25 million shares on its behalf in the Don Hotel Group, selling them and pocketing R3 million – that he had lied and fabricated evidence.
Lawyers acting for IFA have raised suspicions regarding assets of two trusts and how he is funding his lifestyle.
They allege that Wood stripped and abandoned his uMhlanga home, and its sale on auction only yielded R1m.
Creditors
Knoop, in his affidavit, said he had probed the Strath Wood Family Trust and the Raven Trust to establish the prospects of attacking their authenticity for the financial benefit of creditors.
He believed the “prospects were good”.
He had unearthed that when Chemspec listed on the stock exchange in November 2007, existing shareholders such as Wood, who at that time held about 17 000 shares, were entitled to receive proportionate shares in the listed company.
However, when the shares were issued, more than 32 million shares, valued at R1.10 each, were placed in the name of the Strath Family Trust, which had been in existence for only 19 months and its commencing capital comprising a R100 donation from Wood, its founder and trustee.
Knoop said nothing had come to light to suggest the trust was capable of buying that volume of shares at that price, or of any money being paid over.
“It is probably that the trust has never been anything other than Wood’s alter ego and is a sham, and the true ownership of these shares has always been vested, in reality, in him,” he said.
Knoop said it was unlikely these funds had been “frittered away completely”, although 225 000 shares had been sold or disposed of.
Further investigation was needed to see if any of these sales could be impeached.
The remaining shares were valued at R2m.
During 2009 Chemspec, under the helm of Wood, sold its “valuable business premises” from where it still trades and where sites are rented to other enterprises, to a company called Zevoli for R130m.
A quarter share in Zevoli is owned by Dream Weaver. A controlling 66-percent interest in Dream Weaver is held by the Raven Trust which, Knoop alleges, is controlled by Wood.
Knoop said the property was now valued at R170m and, while there was a bond, it was being paid off by rentals.
Knoop said Wood alleged that the Raven Trust shares in Dream Weaver had been distributed to his children in 2010, and yet documentation showed that Wood had only attempted to do a back-dated transfer in April last year, after the sequestration proceedings were launched.
Knoop said Wood, in a statement of assets and liabilities given to Nedbank in 2009, claimed to have assets worth R38m and yet, four years later, said he had nothing.
“This justifies a thorough investigation and there are prospects that hidden assets will be unearthed.”
He said there appeared to be links between Wood and other entities which had purchased two helicopters – one for R2m and another for R1.5m – and a 11m catamaran for R1.5m.
“Whatever the truth about his dealings and interests in the helicopters and yachts, I believe there are good reasons to believe that, at the very least, the R2m shares held by the Strath Wood Family Trust in Chemspec can be recovered and at least R1.25m can also be recovered from the Raven Trust,” he said.
The matter was adjourned yesterday to allow Wood to respond to Knoop’s allegations. - The Mercury