Cape Town - The bank accounts of the online forex trader JP Markets remain in limbo and now the liquidators appointed by the court to wind up the business also don’t have access to the company funds.
JP Markets was founded by businessman Justin Paulsen and licensed by the Financial Service Conduct Authority (FSCA) to provide advisory services online for derivative instruments and deposits for online forex traders. The company’s Financial Service Provider (FSP) licence was provisionally suspended on 19 June 2020 and the company was liquidated on September 7, 2020 by order of the South Gauteng High Court.
One of the first things the FSCA did in July was to apply for the company’s bank accounts to be frozen and the court ordered that pending the outcome of legal proceedings it was the correct thing to do. According to court documents the FSCA has filed in the South Gauteng High Court, JP Markets had several bank accounts that total nearly R280 million.
Paulsen’s legal team have now argued that their appeal of the liquidation order is yet to be granted or heard and that the liquidators should not have access to any of the companies money or bank accounts.
Paulsen’s attorney, Darren Hanekom has contacted all the banks where JP Markets had business accounts and argued that the liquidators should not be allowed access to funds. In one letter sent to FNB, Hanekom writes: “By denying our client access to its bank accounts you are perpetuating the unlawful conduct and causing our client to suffer damage.
"There exists no legal basis on which you can deny our client access to its bank accounts held with your respective institutions.”
He concludes: “We therefore request, as a matter of urgency, that you immediately grant our client the necessary access. We also request that you cease all communication with and access granted to the said bank accounts to the purported liquidators immediately.”
The liquidators claim that they have not as a matter of urgency, tried to access the JP Markets bank accounts. Corne Van Den Heever, Tegogo Malatjie and Edwin Buys-Du Plessis were appointed by the South Gauteng as joint liquidators of JP Markets. In response to a media query the joint liquidators said: “That order was granted by the FSCA on 21 July and that order says please freeze the bank accounts until these proceedings are finalised. If he (Paulsen) appeals it and it opens the case again then the banks should stick to that...no one is forcing the banks to pay the money into an Estate Account but they have agreed to honour the request to freeze the accounts.”
One of the liquidators who did not want to be named said that it has not been confirmed whether JP Markets was solvent or insolvent but that going forward things don’t look good: “If they have traded illegally from June 2019 and I open the claim process and all these traders that think that they’ve been trading legally have got damages claims against JP Markets, you will never be solvent.”
This delays the claims process even further for anyone who was a JP Markets client and wants to be reimbursed or lodge a damages claim as a result of improper trading.
Paulsen’s application for leave to appeal the final liquidation of JP Markets will be heard in the South Gauteng Court on Thursday (October 22).