Johannesburg - A bitter dispute over the estate of businessman and ANC benefactor Sandile Majali – who was found dead in a Sandton hotel in December 2010 – is set to rage on after his family lost a court bid to stop the sale of his shares for what they considered to be a pittance.
Nokhwezi and Mfaniseni Majali, the controversial businessman’s widow and son respectively, intend to appeal a recent ruling that permits the sale of Majali’s shares in his Siyanda Mining Company for about R70 million which will leave them with nothing from his estate.
Lawyers for the family this week confirmed to The Sunday Independent that the family intended to appeal the judgment, which would land the family in dire straits – and having to shoulder the burden of Majali’s other debts.
Majali’s death sparked a legal battle between his family and companies such as Absa and PetroSA, to which he owed millions of rand.
Majali hit the headlines in 2004 when it emerged that he had used money paid to his Imvume Management firm by PetroSA to make an R11m donation to the ANC before the 2004 general elections.
Majali was at the centre of the infamous Oilgate scandal, which implicated top ANC officials and powerful South African business personalities in sanctions-busting oil deals with former Iraqi leader Saddam Hussein’s regime.
Mfaniseni and Nokhwezi, both executors of Majali’s estate, sought to have a settlement agreement – between Absa and the liquidators of Majali’s companies, Imvume Resources and Tshozi Investments – declared unlawful and unenforceable.
According to the agreement, the liquidators would sell Majali’s shares for just over R70m, enough to settle the debt owed by Majali to Absa.
The agreement was signed last year, nearly three years after Majali’s death, but the family have sought to dispute its legality, based on the lapse of the 45-day period during which the sale had to be concluded.
Majali was the sole shareholder in both companies and used Tshozi’s ownership of 85 percent of shares in Imvume as security for a R45m loan from Absa.
Before his death, Majali had applied for voluntary liquidation for both firms, leading to widespread suggestions that the politically connected businessman had hit rough times.
Majali still owed Absa R45m, but the debt is now estimated at more than R60m due to interest accrued on the loan.
Should Majali’s shares be sold for the amount wanted by Absa and the liquidators, it appears the family will be left with considerable debt.
PetroSA, which has sought to claim the money that Majali donated to the ANC, is also listed as still being owed more than R8m by the estate.
Absa and the liquidators have dismissed the claims by the family, saying the family were only opposing the sale in order to benefit from money they were not entitled to.
They have also claimed in court papers that the family were fully aware that Majali’s shares were not worth anywhere near R130m.
“It is submitted that the conduct of the applicants is opportunistic and clearly designed on procuring for themselves a benefit to which they are not entitled.
“In addition, the applicants were quite prepared to participate in the sale of the shares for an amount of R74.95m provided the shares be split so that the applicants, via their Vesamafa Trust, were securing for themselves 20 percent of the purchase consideration.
“The applicants were fully prepared to conclude that agreement at a much-reduced valuation, provided they secured themselves the benefit via the trust.
“In so doing, the applicants demonstrate without doubt that the value of the shares are not R130m as contended for,” they said in court papers.
Majali’s family are relying on a clause in the agreement signed between Absa and the liquidators which stipulates that the sale of the shares had to be concluded within 45 days of the agreement, failing which the transaction would have to be dealt with in terms of the Insolvency Act.
“The terms of clause 17 are clear and in context it means, with respect, that the settlement agreement has no practical effect,” they argued in court papers.
The family have also disputed the contention that they could not interfere or stop the sale as they were not party to the agreement.
“We submit that the applicants do have a legal interest in addition to a financial interest in this matter.
“First they are the executors in the deceased estate of the late Majali who owned an 85 percent shareholding in SMC through Imvume.
“A court will bear in mind that Majali was the sole shareholder in both Imvume and Tshozi and, put differently, if the liquidators were to dispose of the 85 percent shareholding in SMC at a price obviously prejudicial to the estate, the courts will entertain an application by the applicants in their capacity as executors to prevent such disposal,” they argued.
The family’s lawyer, John Ngcebetsha, said they were most likely to appeal the judgment as soon as they had received a full written judgment on the matter.
Sunday Independent