R12m windfall for alleged fraudsterComment on this story
The insolvent estate of Ponzi scheme-accused Mervyn Dennis, who is facing more than 2 500 counts of fraud, received a R12 million windfall when a Durban High Court judge ruled in his favour in a long-standing legal battle with a Durban businesswoman.
Dennis, of Malvern, Durban, and his sister, Mary Ann Peter, were charged with more than 2 500 counts of fraud and one count of contravening the Banks Act in connection with allegations that through his “investment club”, Global Investments, R139m was taken from people.
It is alleged that only about R5m was invested on the stock market, R61m was used to repay investors and the rest was spent by Dennis on gambling, jewellery and cars.
He was sequestrated in 2005 and the trustees of his insolvent estate took legal action to recover the R12m loan to pay back investors.
In a judgment handed down on Tuesday, Judge Kate Pillay ordered businesswoman Zarina Sukan to pay back the R12m plus interest, dating from 2004. Dennis claimed that he lent Sukan the R12m, which was from investor funds, in 2003, and in terms of a signed agreement, she had undertaken to repay it at a rate of R1m a month from January 2004.
He claimed she had not paid back any of the money.
Sukan admitted signing the acknowledgement of debt, but said Dennis had not handed over the money to her. She said she had wanted it to set up a business importing goods and clothing from the Far East.
Judge Pillay found that Sukan, who had “a penchant for gambling”, could not provide financial records to prove that she had not received the money. She said the fact that Sukan made several overseas trips to buy stock, her gambling and other factors favoured the probability that she had received the money.
She also found that Dennis had been persuaded by Sukan’s reputation. “However… the manner in which he dealt with large sums of money belonging to third parties does not speak well of his own business acumen,” she said.
The criminal case against Dennis and his sister is yet to go to trial. The charges, withdrawn in 2006, were reinstated in 2010. In 2012, they applied for a permanent stay of prosecution, but this was refused by the Durban Regional Court.
On Tuesday, the National Prosecuting Authority said the case was set for June pending a decision in a review application. - The Mercury