Durban - Investors who said they ploughed up to R70 million into a “cure for Aids” nutrition business came face to face in the Durban High Court with the two wealthy “high-flyers” they accused of ripping them off.
There was an uncomfortable stand-off and angry mutterings between the shareholders sitting in the public gallery and Edge to Edge Global Investments directors John Ellis of Durban and Jan Louw of Pretoria, who quickly moved away to the front of the court and sat in seats reserved for the legal teams.
The application before Judge Dhaya Pillay on Thursday was for a final liquidation order against Edge to Edge which, the investors said, would uncover what they alleged to be fraud, and that the two men spent the money on themselves and not on developing the “Aids cure” nutrition pack.
Last year, the shareholders, led by Durban businessman Anthony Pinfold, secured an order – the first to have been granted under the new Companies Act – giving them permission to initiate liquidation proceedings against a public company on the grounds of allegations of fraud.
The company was then placed under provisional liquidation.
Ellis and Louw have continued to oppose all court action, insisting they have a patent on a nutritional pack and that the investors’ money has been spent legitimately.
But Greg Harpur, SC, for the shareholders, argued on Thursday that between R60m and R70m had been taken from investors and “not a single product produced”.
“The company is no longer trading. It has no offices and last time we looked it had R7 000 in the bank account,” Harpur said.
“No financials have been produced for two years and the only way forward is for the directors to persuade other unsuspecting members of the public to put money into this worthless company.
“The directors have been delinquent. And yet they want this court to return control of this company to them.
“Their opposition (to liquidation) is driven by a desire to ward off an interrogation.
“We say they used the money on extravagances, such as (Ellis’s daughter’s) wedding, which cost R2.4 million, the expensive house Mr Ellis lives in, driving the best motor vehicles, and staying in the best hotels. All paid for with other people’s money.”
Harpur said in documentation Ellis and Louw were described in “glowing terms” and no reference was made to Ellis’s previous conviction for fraud and a R200m civil judgment against Louw.
Advocate Farouk Moosa, for Edge to Edge, got a grilling from the judge, first about his written argument, which spoke of a “miracle in religious history when the water looked at the Prophet and blushed”. The judge said: “I am not sure what this is meant to tell me.”
Later during argument, Moosa brandished a document that he alleged was the patent for the “cure for Aids”, but he could not say where this document appeared in the 2 500 pages before court.
“You are saying that you have a cure for Aids and it is ready to market. And the rest of the world is not aware of it. I am personally close to Aids research and this is the first time I am hearing about it,” the judge said.
Moosa said the product was not on the market because the company had been placed under provisional liquidation. Financial statements had not been produced because the provisional liquidator was refusing access to the records.
Louw and Ellis had formed the company and allotted shares at no value to themselves, which they had then sold at different prices to different people, Moosa said.
Asked by the judge to whom the shares had been sold, when and for how much, he said he could not answer “because it is not an issue which arises on these papers”.
At one stage, Louw attempted to speak to the judge directly, but he was shooed down by his advocate and reprimanded by the judge.
Judge Pillay indicated that she would give judgment soon.