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A former politician and businessman has admitted that, after being sequestrated, he hid his considerable assets from creditors and, later from his wife during their divorce, by giving them to his younger brother.
Former Verulam deputy mayor and civic leader Sagadava “Manna” Naidoo has now lodged a court application, suing his brother to get back his share of land, farms, firms and properties.
He also admits that he lied repeatedly about the true ownership of the assets while under cross-examination in his insolvency inquiry and in an affidavit he had made during his divorce proceedings.
His conduct - and the possible involvement of his businessman brother Sivaraj Naidoo in his “fraudulent scheme” - has now been referred to the director of public prosecutions, the master of the high court and the trustees of his insolvent estate by Durban High Court acting Judge Nkosinathi Chili.
Details of the feud between the brothers over the family fortune - which includes a large tract of land near the King Shaka International Airport, transport and shipping container businesses, a litchi farm and several properties in Verulam - were exposed when Manna Naidoo lodged an urgent court application last month seeking to freeze the assets before a trial to finally determine who they belonged to.
Manna secured an interim order. When he went back to court to get it confirmed - and to try to get from his brother R1 million for legal fees and R50 000 a month for living expenses - his brother fought back, putting up “proof” of his ownership through transcripts of the insolvency inquiry and the divorce affidavit in which Manna denied he owned the assets.
Judge Chili, in a scathing judgment handed down this week, said Manna, in his affidavit, had said he was sequestrated “on the basis of a friendly request” in November 2000 and he arranged with his brother that all his assets be transferred to him on the understanding that once he was rehabilitated, they would be returned.
He was rehabilitated the following year and an agreement was drawn up regarding the division of assets, but never signed.
Sivaraj, in his affidavit, denied he was merely a nominee and said his brother had no legitimate claim to the assets.
He accused him of not disclosing “material facts” about his previous testimony and “repeated denials” about ownership of the assets when he applied for the interim order.
Manna, in response, said he had lied to creditors and to his wife and “with the benefit of hindsight I ought not to have… for which I apologise”.
Lawyers acting for Manna urged the judge to ignore his previous conduct, but he said he was not prepared to do that.
“It may well be there was an arrangement between them (the brothers) regarding the division of certain assets. However, the most unfortunate part is that the foundation (of it) is lies and deception. It seems to me that (Manna) was on a mission to defraud his creditors.”
The judge quoted from his affidavit in which he admitted to transferring the litchi farm to his brother in 1998 “to afford me a measure of protection against creditors and it also suited me at that stage because I was about to enter what I anticipated to be a full-time career in politics”.
The judge said it was common cause that this was contrary to his evidence in the sequestration inquiry and divorce which he had deliberately withheld when asking for the interim order.
This, the judge said, was enough to justify him overturning the order, but the other, overriding factor, was the enormous prejudice his fraudulent acts had caused his creditors, considering on his version, the assets were worth millions. With regards to the costs, he said Sivaraj’s lawyers had asked they be “punitive because of his (Manna’s) audacity to mislead the court”.
“I was tempted,” the judge said. “However it seems the possibility exists that the respondent (Sivaraj) was himself involved in the fraudulent scheme.”
A trial date has yet to be set to determine ownership. - The Mercury