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Johannesburg - A Gauteng businessman who chairs a black business consortium is under investigation for massive fraud and money laundering that ended up costing Old Mutual close to R100 million.

And even though he has not been formally charged, he was served with a court order this week informing him that his assets, including his upmarket Waterkloof Ridge home, millions of rand in investments and a BMW 6 Series, had been attached by the Asset Forfeiture Unit (AFU).

Matthews Tuwani Mulaudzi is Luvhomba Group executive chairman. It conducts business in various industries, including mining, IT, consulting, the acquisition of businesses, ventures, service rendering and retail.

The group was voted in the top 30 companies in Africa in the 2010 Africa-Legatum Awards.

According to court papers filed by the AFU, the fraud investigation against him relates to a R33m Investment Frontiers policy he took out with Fairbairn Capital, underwritten by Old Mutual.

Priority Crimes investigator Carel Lourens said in an affidavit that in March 2011 Mulaudzi ceded the policy to Nedbank in return for R37.6m.

In 2012, he tried to buy back the cession from Nedbank, but the bank declined his offer, Lourens said.

In January this year Mulaudzi allegedly used the same policy to secure an overdraft facility at Absa bank and, later, to have the overdraft increased, Lourens said.

Five months later, in June, the policy matured and Mulaudzi again contacted Old Mutual to request that the full value of the investment – about R48m – be paid to him.

The money was paid into his Absa bank account on June 6 – the day before his 44th birthday. Lourens said the registration of the cession of the policy to Nedbank had not been effected on Old Mutual’s system, which meant staff didn’t realise that Mulaudzi was not entitled to the funds at maturity. Old Mutual only realised this more than a month later, when Nedbank Financial Planning requested that the proceeds of the investment be paid to it.

Lourens said Old Mutual was obliged to pay Nedbank the R48m, which it did last month – which means that it ended up paying R96m for the same investment policy.

Old Mutual asked Mulaudzi to repay the amount, but he refused, denying that a valid cession existed between himself and Nedbank, Lourens said.

In a separate affidavit, AFU regional head Gcobani Bam said Mulaudzi was also being investigated for money laundering after it emerged he had transferred the R48m through his FNB bank account to the MMI Group Ltd to buy investments, which he liquidated a week later. He then transferred the proceeds back to his FNB account and, from there, to other accounts.

“The sole purpose of these transactions, which make no commercial sense, was to conceal any link with the funds fraudulently obtained from, alternatively stolen from, Old Mutual,” Bam said.

In applying for a provisional restraint order so that the AFU could attach Mulaudzi’s assets to satisfy a later confiscation order, Bam submitted that Mulaudzi benefited to the tune of R48m.

He asked that the value of the provisional restraint order be capped at that amount.

The case returns to court in November, when Mulaudzi will have an opportunity to say why the provisional order should not be confirmed.

According to the papers, Pretoria police have also been investigating Mulaudzi in connection with separate criminal charges Nedbank laid against him for alleged fraud or theft of more than R8m.

Sunday Independent