17 June 2024 | 10:24 AM

Client accuses Investec of fraud

Key Takeaways

Allegations of dirty dealings have been levelled at banking group Investec by property developer Andrew Botha.

Botha was co-director of the MKB property group, which went into liquidation in 2009 after Investec pulled the plug on its loans to the group.

The bank then went after Botha personally for R103-million in terms of sureties he allegedly signed in his personal capacity.

Now Botha claims in court documents submitted in June that Investec allegedly relied on forged signatures on the surety documents to obtain a debt judgment against him.

He has filed a rescission application in the South Gauteng High Court to have the 2009 debt judgment against him revoked.

At issue are two matters Botha claims he has discovered since 2009 that could make the judgment against him null and void. First is the claim that Investec relied on forged signatures and second is the allegation that Investec itself was responsible for the company’s financial woes and ultimate liquidation early 2009.

Sureties

The allegation regarding the sureties is based on six signatures signed on deeds of surety in 2007 and 2008. This formed the basis for the judgment against Botha brought by Investec at the start of 2009. By signing these, Botha would have bound himself in his personal capacity to the bank if MKB could not repay the loans taken out with the bank.

But the former MKB director states in his court application that the signatures were forged.

Annexed to the court application is a report by former policeman and forgery expert Hannes Hattingh, who compared the signatures on the six documents to Botha’s.

Hattingh states in his report compiled in May that: “The construction of the questioned signatures on the disputed documents differs from the specimen signatures in that movements are completely omitted in some cases. The signatures of A Botha on the disputed documents are forgeries of the person who signed the specimen signatures.”

Defaults and loans

Botha claims that Investec itself precipitated the crisis that led to the liquidation of MKB and that, at the time Investec launched the application to wind up MKB, the company was not in default of any provision of the loan agreements.

From 2006, MKB started receiving finance from Investec through various loan agreements for property-related developments in Gauteng.

Botha states that Investec “refused” to make payments to MKB “in accordance with MKB’s drawdown requests for works completed on its construction sites from September 2008 to November 2008”.

Botha states that a former employee of Investec, Glenda Thomas, has confirmed that during 2008, on instruction from Investec, she reviewed documentation relating to MKB and found that MKB was not in breach of any of its loan agreements at that time.

Thomas also confirms that during the course of her examination, she found that many documents, including sureties, were missing or signed incorrectly or had not been signed at all and was concerned that Investec should not have made advances to MKB in such circumstances. An advocate’s report commissioned by Investec subsequently confirmed her findings.

Thomas, who is also the main complainant in a human rights abuse case against Investec, which is being investigated by the Human Rights Commission (HRC), worked for Investec as a recoveries consultant in the Johannesburg branch from 2006 to October 2009.

Thomas resigned but took Investec to the Commission for Conciliation, Mediation and Arbitration (CCMA) for constructive dismissal based on allegations that the bank had made her last month of employment intolerable.

Thomas and Investec agreed on a confidential settlement at the time but shortly after her CCMA case, Thomas submitted a complaint to the HRC for human rights abuses, saying Investec tapped her phone calls and monitored her bank accounts.

She was apparently suspected of leaking information to the media about Investec client Zunaid Moti and the bank’s restructuring of his R1.5-billion debt.

In a 2010 affidavit submitted as part of Botha’s current application, Thomas states that she became aware of an investigation into MKB and its directors at the end of 2009.

“The legal documentation team and the risk team were in the process of an internal audit involving, inter alia, all lending contracts and correspondence related to MKB and its principles.”

Thomas states: “During my inquiry, I noticed that documentation pertaining to sureties was missing: no signatures affixed to documentation or [they were] signed incorrectly.”

She states that she then “escalated” her findings to her boss at Investec. She says an external audit of her findings was carried out by a lawyer on behalf of Investec.

Thomas states that she had access to the forensic report, which she claims confirmed her original belief that “IBL [Investec Bank Limited] had not followed good business practice and due diligence in obtaining and ensuring signatures from MKB and its principles on lending agreements and surety agreements”.

Botha alleges that the judgment on the basis of the sureties should be overturned and the validity of the suretyships must be referred for oral evidence. He says there was never any reason to doubt that the signatures on the sureties were not his own until the alleged forgery was drawn to his attention.

Investec responds

  • The surety issue: In a written statement, Investec said: “A provisional sequestration order against Mr Botha has been granted. Mr Botha is opposing the final sequestration and seeking to rescind Investec’s money judgment against him. Investec’s affidavit dealing with his allegations is in the process of being finalised and will be filed during the course of next week.”

The company said it would deal with all Botha’s allegations in its affidavit. But it said: “Investec strongly denies the allegations made by Mr Botha and we believe that we will entirely refute these allegations in our affidavits. Investec will never condone nor facilitate any illegal activity whatsoever.”

 

 

  • The HRC: Investec acknowledged receipt of a letter from the HRC that a complaint had been laid against it by Thomas. It said in the statement that Thomas was the wife of Chad Thomas, who was assisting Botha with his defence.

 

The statement read: “As requested, Investec submitted a full written response to the allegations made on January 12 2010.

“It suffices to state that Investec denied the allegations made and particularly denied having violated Glenda Thomas’s rights as alleged or at all. As no further correspondence has been received from the HRC, we can only conclude that the matter is closed.”

 

 

  • Final comment: The bank said it was not its policy to spy on clients and it did not condone any activities that violated the constitutional rights of individuals. Any investigative work required by Investec from time to time was done in accordance with the law.

 

“The allegations are calculated, in our assessment, primarily to damage Investec’s reputation ahead of the various pending court cases and to serve the personal vendettas and agenda of disaffected and delinquent third parties.”

HRC investigates illegal monitoring of information

The HRC has relaunched an investigation into Investec’s illegal monitoring and accessing of individuals’ information without their consent, which is a possible contravention of human rights.

Danaline Franzman, head of legal services for the HRC confirmed that the complaint has been forwarded to the Gauteng office for further investigation.

The main complaint in the HRC case appears to be based on allegations by former Investec employee Glenda Thomas.

Thomas claims she was aware that Investec, using the services of private investigations firm Specialised Services Group (SSG), not only monitored her phone calls but also those of former Investec clients.

At least seven affidavits by witnesses and alleged victims confirm this and form part of the HRC investigation.

She claims former directors of property development group MKB, Jonathan Molyneux-Killik and Andrew Botha, were investigated on behalf of Investec.

In her affidavit Thomas claims she became aware of an investigation into MKB and its directors during 2009, conducted by SSG as part of their services to Investec.

Thomas states she saw material in the possession of Investec relating to the international mobile equipment identity numbers of cellphones used by Botha and Molyneux-Killik. This, she says, “is not available legally — without a warrant”.

Botha and Molyneux-Killik claim in court documents that Investec, through SSG, monitored their calls and hacked into their email server before the bank had brought any criminal and legal action against them.

SSG’s chief executive, Warren Goldblatt, said he was not aware of the HRC investigation into SSG and Investec, although he had “heard the rumblings”.

He said after information was leaked to the media by an Investec employee in 2009 his company helped investigate for the bank.

But, he says, “all we did was polygraphs. We are happy to answer everyone’s allegations.”

Goldblatt confirmed that his company was employed by Investec to investigate MKB.

“We investigated the company MKB and all the irregularities, which were various. We worked with information gathered from the liquidators and the computers the liquidators had in their custody. Criminal charges were filed against them.”

Goldblatt denies that SSG did anything “unlawful”.

He said all the information obtained on MKB and its former directors was obtained with police warrants. “We absolutely deny any of the allegations of illegality. In time the truth will be revealed. We regret it when the media is being used to elicit a settlement.”

The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.

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amaBhungane

Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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