There may be a ray of hope on the horizon for the investors who were duped into investing more than R1 billion in alleged ponzi scheme Carmol Distributors.
One investor, Themba Madlala, who poured over R1 million into Carmol’s coffers, made a high court application to have the company committed to business rescue.
With Carmol in financial straits and liquidation looming, he suggested in court documents that investors are likely to receive up to four times more money back under business rescue than if Carmol were to be liquidated.
In his statement, Madlala said, “If investors accept the proposed business rescue plan, it would result in creditors receiving 86.5 cents in the rand (R500m divided by R578m).
In November 2014, Carmol was suspended and placed under investigation by the SA Reserve Bank, which concluded that Carmol Distributors contravened the Banks Act, by conducting the business of a bank - accepting deposits from the public - without being registered as a bank.
The company claimed it was financing the sale of petroleum products. It offered investors a high return of 6 percent to 8 percent a month.
Following the investigation, the directors, Yunus Moolla and his wife, Fathima Carawan, were instructed by the Reserve Bank to pay back investors and auditing firm KPMG was appointed to administer the process.
“Carmol, Moolla and Cara-wan have not complied with this directive and the Reserve Bank has initiated legal processes for the liquidation of the company and sequestrations of Moolla and Carawan.”
A High Court order was granted on October 1, placing Carmol under provisional liquidation.
Carmol is opposing the bank’s application and the matter has been postponed for hearing this week.
The Reserve Bank said it did not know where Moolla and Carawan are and the sequestration applications had not been formally served.
“I don’t know what to do any more,” said distressed Durban investor, Sam Naidoo. “I invested my life savings and trusted those agents because they were my friends.”
Another investor, who did not want to be named, said he invested hoping to make enough money to put his daughter through university. “I had no idea what I was getting myself into. A friend of mine is on the brink of suicide after losing all his money.”
Attempts to contact Moolla were unsuccessful.
Investors can contact KPMG at 0800 555 836 for assistance.
Sunday Tribune