Firmanox unsuccessful in claiming legitimate deals with VBS Mutual Bank
Johannesburg - A Johannesburg-based company has unsuccessfully claimed that the millions of rand it received from VBS Mutual Bank were part of a number of legitimate deals with the financial institution and the Shembe Church.
Firmanox was fingered in the VBS Bank heist report for having received almost R18 million from the now defunct bank. The company has now been liquidated for failing to settle its debt of over R24m.
VBS liquidator Anoosh Rooplal successfully approached the South Gauteng High Court, stating that Firmanox benefited from the fraudulent scheme that saw VBS lose nearly R2 billion, as found by advocate Terry Motau SC in 2018. He also sought Firmanox’s final liquidation due to its indebtedness to VBS.
Rooplal told the court that Firmanox was indebted to VBS to the tune of more than R24.1m for an overdraft facility and vehicle finance for the purchase of six luxury vehicles in 2016. Firmanox has denied it had an overdraft facility with VBS and instead stated that it had legitimate agreements in which VBS was obliged to pay it over R14.3m.
The company blamed VBS staff and management for creating fictitious credit of R15.5m but it never played a role in the scheme.
It also denied being indebted to VBS by nearly R4.8m for the vehicles.
In its defence, Firmanox, which provides brand communication, advisory services and solutions, planning and buying of media spots for advertising and related activities, claimed it signed a deal with the eBuhleni faction of one of South Africa’s largest churches with over 6.7 million members and officially known as the Nazareth Baptist Church, to be its exclusive media, communications, marketing, sales and broadcasting agent.
One of the agreements saw Firmanox granted exclusive rights to broadcast a 24-hour channel, Shembe Unyazi TV, in South Africa and abroad.
Firmanox claimed it approached VBS to establish the Shembe Unyazi Bank of SA (Subsa), in which VBS would be a 60% shareholder, Firmanox and Black Label Telecoms would each have 10% while a NewCo and a strategic partner would own 20%.
In terms of the deal, VBS would allow Subsa to operate under its banking licence and provide operational skills, know-how, operating systems and competent personnel to run the bank.
VBS would also be responsible for membership system across the country and pay R5m in implementation costs as well as contribute R660 000 to Firmanox as sponsorship for the setting up of Shembe Unyazi TV, which was on direct broadcast satellite television service Open View HD.
There was also another deal to establish Shembe Unyazi Mobile, according to Firmanox.
However, Judge Piet Meyer found Firmanox’s defence was not reasonable, patently far-fetched and implausible, beset with contradictions and difficulties.
“Firmanox does not explain why, if there were no real finance agreements concluded, it made payments of the instalments due in terms of those agreements from May 2016 until February 2017,” reads Judge Meyer’s ruling on November 20.
“It also does not explain why regular monthly motor instalments stopped the month before the sizeable credit of R15.5m was made in its overdrawn account with VBS, which cleared the account’s debit balance and which the liquidator alleges was fictitious.”
Firmanox director Simon Ntshantshayi could not be reached for comment yesterday but in the recently published book VBS: A Dream Defrauded, by Dewald van Rensburg, he accuses VBS of hijacking his company’s plans.
He is quoted as saying he did not know about VBS and its existence until they called his business partner, Konanani Muleba.
The church’s spokesperson Lizwi Ncwane did not respond to questions about the nature of its relationship with Firmanox and whether it benefited from the VBS millions.