EXCLUSIVE: Standard Bank manager accused of collusion in bitter liquidation dispute
Companies / 20 December 2018, 08:24am / Sizwe Dlamini
CAPE TOWN – Standard Bank business credit manager, Andrion Gouws, has been accused of colluding with ENS Africa’s liquidation department to achieve unfair financial gains in a liquidation matter involving Zonnekus Mansions owned by the Eagles Trust, represented by businessman Gary van der Merwe.
Van der Merwe, through attorney Tim Dunn, in emailed correspondence addressed to KPMG’s fraud department, stated that Gouws appeared to have abused his authority in a manner that was contrary to logic and arguably detrimental to the solvency of Standard Bank.
Dunn stated that Gouws’s actions showed that he was grossly incompetent and/or grossly negligent or constitute corruption.
ENS Africa has dismissed these statements as baseless, opportunistic and a distortion of the facts. (SEE BELOW)
Van der Merwe said that Zonnekus, which had outstanding bonds with Standard Bank and Absa, claims that his and the shareholder’s attempts to opt for business rescue, rather than liquidation, were outrightly blocked by Standard bank in spite of the fact that this option would have fully settled the bonds at no additional expense to the bank.
In December 2014 the liquidators of Zonnekus, represented by ENS Africa, brought an application for the extension of their powers wherein they made mention of the fact that Standard Bank was willing to advance R2 million for the administration of the estate of Zonnekus and for legal fees to be paid to ENS Africa.
The company stated that at least four applications for business rescue, which were all opposed by Standard Bank, would have settled the bonds in full but were opposed in favour of the liquidation option through ENS Africa.
In 2014 Standard Bank made an application to liquidate Zonnekus to the Cape Town High Court as a result of a preservation order by MacRobert Attorneys on behalf of the South African Revenue Authority (Sars) over the properties owned by the company falling behind on its instalments to Standard Bank and Absa.
While in terms of common law Standard Bank is in principle entitled to liquidate the company, “the bond documents have no such provision and instead provide for the properties to be sold in execution and any shortfall to be recovered from the sureties”.
Dunn stated that a simple sale in execution would have easily satisfied the amounts outstanding. “Indeed the properties have been sold and transferred, albeit in contempt of the preservation order, for a sum greater than the amount of R5 366 502.51 claimed by Standard Bank, even with the liquidator giving the purchaser a R1.5 million discount.”
In April 2015 the Eagles Trust, the 100 percent shareholder of Zonnekus, brought a business rescue application to remove the company from liquidation as it was envisaged that the banks’ bonds would be settled sooner rather than later in business rescue. Sars and Standard Bank opposed the business rescue application and it was dismissed.
In May 2016 a new application was brought by long-serving employees of Zonnekus on the basis that the shareholder had received an offer to purchase all the bonded properties for R9m. The offer to purchase was from a property developer named Ian Geoffrey Chait.
“It is important to bear in mind that Standard Bank was a creditor for R5.3m and Absa a creditor for about R2m, and this offer would have settled the creditors leaving a residue of R1.7m to be fought with Sars,” stated Dunn.
“It is inexplicable that instead of opting to settle the matter for R5.3m Standard Bank have opted to litigate for four years, pay ENS Africa R5.5m in legal fees, contribute R1m to the liquidated estate and sustain a shortfall of R2m, in other words, Gouws has cost Standard Bank R8.5m and 4 years with the matter still ongoing. Standard Bank was offered the money, but chose to take the box,” Van der Merwe said.
He said a number of attempts were made to get Standard Bank to take the money the bank “purported to want” but all these attempts were flatly rejected, with ENS Africa on behalf of Standard Bank insisting that the sale of the properties takes place in the liquidation.
Chait subsequently withdrew the offer to purchase due to the failure of the bank to accept the offers, and resultantly the business rescue application had to be withdrawn.
A third business rescue application was brought by the Eagles Trust and Van der Merwe, which was dismissed on the basis that the previous application was still alive when the third one was submitted.
This application – consequently known as the fourth application – was resubmitted on the basis of an offer to settle the bonds immediately in full by another company and Van der Merwe’s daughter Candice.
There was also another offer to purchase of R8.5m by a different property developer, who subsequently bought three of the properties. This offer would have also resulted in the full settlement of all the bonds and the removal of Standard Bank from the equation, according to Dunn.
He said despite the repeated offers to settle the bonds in full, Standard Bank opposed all business rescue applications at a huge cost to the bank. “They protested about the delays caused by the business rescue applications and said they had the right to oppose but carefully avoided the obvious point that had they accepted the offers to settle the bonds in full, they would have no involvement whatsoever.”
The business rescue was ultimately refused by the court, but not on the basis that the offers were bad or invalid. “The main reasoning appeared to be the fact that the Sars claims had not been set aside.”
Trite law on liquidation
The costs of the business rescue applications have been added to one of the bonds, contrary to the court orders that make no order in respect of costs against the liquidated company, as well as the trite law on liquidation.
Once the fourth business rescue application was dismissed the liquidator accepted the R8.5m offer, “but seemingly inexplicably gave a R1.5m discount to the buyer”.
The complaint is that despite the offer settling the Standard Bank and Absa bonds in full, ENS Africa claimed that Standard Bank expected a shortfall of about R1.8m. “This makes sense only if the R2m was advanced by Standard Bank to the liquidation, the vast majority of which would have been spent on the legal fees that were entirely preventable had the business rescue been accepted.
“Gouws either took shockingly bad advice from ENS Africa, contrary to the interest of his employer or is intentionally prejudicing the company in liquidation for the benefit of another entity other than Standard Bank,” said Dunn.
Dunn said despite the complaint having been submitted and acknowledged in April 2018 with the promise of a response being offered by KPMG within two weeks, to date no response has been received.
Van der Merwe's claims are baseless, opportunistic and a distortion of the facts – ENS
ENS Africa has said the statements made by businessman Gary van der Merwe and his attorney, Tim Dunn, to Business Report are baseless, opportunistic, a distortion of the facts.
This after Van der Merwe accused Standard Bank business credit manager, Andrion Gouws of colluding with ENS Africa’s liquidation department to achieve unfair financial gains in a liquidation matter involving Zonnekus Mansions.
Director at ENS Africa Andre Symington told Business report that Standard Bank had at all times acted in the best interests of its shareholders and other stakeholders and had run the collection process against Zonnekus in a courteous and professional manner.
Symington said: “The company was placed into liquidation in 2014 after a failed opposition thereto was raised by Gary van der Merwe, its corporate controller.
ENS Africa Statement:
ENS has represented Standard Bank over the past four years in the protracted winding-up proceedings of Zonnekus Mansion (Pty) Limited. At all times, Standard Bank has acted in the best interests of its shareholders and other stakeholders and has run the collection process against Zonnekus in a courteous and professional manner. The company was placed into liquidation in 2014 after a failed opposition thereto was raised by Gary van der Merwe, its corporate controller. Van der Merwe has, since 2014, embarked on a sustained campaign against the liquidators, SARS, Standard Bank and the attorneys representing them in an attempt to frustrate the liquidation process and to discredit all those involved in it in an attempt to retain control of the remaining asset owned by the company, being a residential property in Milnerton – termed as the “jewel in the crown” .
The statements made by van der Merwe and his attorney, Tim Dunn, to Business Report are baseless, opportunistic, a distortion of the facts and have been raised repeatedly before a number of courts in no less than seven applications brought by van der Merwe during the course of the winding-up. Four of these applications were business rescue applications all of which were dismissed in the Western Cape High Court. In particular the final application was found to be abusive, vexatious and brought with an ulterior purpose. The Constitutional Court found no merit in any of the four applications. So scathing was the judgment in the fourth such application that an order was granted prohibiting any further applications from being brought without the express consent of the senior duty Judge.
An application for leave to appeal the failed contempt of court application is currently serving before the Supreme Court of Appeal, the merits of which are poor. The winding-up process is all but complete save for the pending application for the eviction of the occupiers from the Milnerton property which will serve before the Western Cape High Court in February 2019. Van der Merwe and Tim Dunn (his “in-house” attorney – as coined by Judge Gamble in the final business rescue application) are amongst the occupiers whom the liquidators seek to evict in order for the property to be sold in satisfaction of the claims of Zonnekus’ creditors.
Out of respect for the court process, which is currently still underway, ENS and Standard Bank do not deem it appropriate to comment in detail in regard to the allegations raised by Dunn and van der Merwe at this stage and their rights in this regard are reserved. The judgments which have been handed down in the various failed applications brought by van der Merwe and Dunn are public record, place the allegations raised in proper context and are available to anyone who wishes to have reference to them. Of particular relevance is, however, the blatant misrepresentation by Dunn of the fact that offers have been received which would have “settled” the claims of Standard Bank. This statement is, at best, fanciful. Standard Bank has sustained a substantial shortfall on its claim and has been left with a number of hollow costs orders against van der Merwe and his fronts.