13 April 2024 | 03:06 AM

No holds barred: Controversial businessman Zunaid Moti locked in a vicious legal battle with former cage-fighter

Key Takeaways

An irate investor who partnered with Zunaid Moti on a platinum venture has dragged the controversial businessman to court over allegations of fraud in connection with a platinum venture .

Frederick “Frikkie” Lutzkie, a Ballito-based coal tycoon and former cage-fighter who has courted his own share of controversy, claims he has realised “almost no value” from a R242-million investment that Moti convinced him to make in a company called Kilken Platinum.

He alleges that Moti and his business associates defrauded him using a series of “convoluted transactions” to divert money due to Kilken, depriving Lutzkie of his expected profits.

The legal clash offers glimpses into the corridors of Moti’s murky business empire and the Machiavellian, wheeler-dealing lives of two businessmen who have been linked to prominent underground figures.

If Lutzkie’s version is to be believed, then it also suggests that Moti has been able to remain afloat amid crippling debts to Investec bank and commodities giant Glencore by cheating Peter to pay Paul.

Moti denies this and effectively accuses Lutzkie of not understanding the transaction he entered into.

Moti is the flamboyant owner of the Sandton-based Moti Group, which lists mining, property development, security, logistics and aviation among its business interests. He has major investments in Zimbabwe, notably through a mining company called African Chrome Fields, and is known to be close to senior Zimbabwean politicians including President Emmerson Mnangagwa and his deputy Constantine Chiwenga.

The acrimonious legal battle has seen both sides trading allegations of intimidation involving well-known underworld figure Mark Lifman, while Lutzkie has accused Moti of lying about what he knew of the death of one of his business rivals, covering up sexual abuse in his group of companies, and running a criminal enterprise.

Moti and his associates accuse Lutzkie of having tried to force them to buy his shares back at an extortionate price, using a series of what they characterise as “abusive” court applications based on false claims intended to portray Moti in a bad light.

The case has its origins in a deal finalised in 2020, which would see Lutzkie pay R242-million for a 35% stake in Kilken.

The company, in a joint venture with its BEE partner Imbani Minerals, operates a plant that reprocesses tailings from Anglo-owned Rustenburg Platinum Mines (RPM) in the North West and sells back the concentrate produced from this to RPM.

Imbani owns 30% of the JV, while Kilken owns 70%.

In his urgent application to the High Court in Pretoria, Lutzkie asks the court to remove Kilken’s three directors – Salim Bobat, David Willoughby and Moti’s son Mikaeel – and, together with former director Ashruf Kaka, declare them delinquent directors.

He seeks an order that a new board be appointed in which the applicants – three of his companies – be given equal voting rights to Moti and his associates, and that the RPM payments he claims are being diverted from Kilken be paid instead into a third-party account approved by the new board or as determined by the court.

An arrest, a debt and a deal

In affidavits, Lutzkie alleges that Moti was “in desperate need of financial assistance” after spending months in prison in Germany.

Moti was arrested in Germany in 2018 after an Interpol notice was issued against him in a case allegedly stemming from a fallout with Russian businessman Alibek Issaev.

Issaev was a partner in Moti’s FerroChrome Furnaces smelter business.

The Issaev dispute also revolved around a rare R500-million pink diamond, which Moti and his associates accused Issaev of stealing from them.

Moti’s group was in turn accused by diamond dealer Sylla Moussa of stealing the diamond from him in 2013 (contrary to their claim he had given them the diamond in payment of a debt).

Moussa, who was still pursuing a case in Switzerland involving Moti, was gunned down in what appears to have been a hit in August this year.

Interpol later cancelled its notice against Moti and he returned to South Africa in January 2019, after what Moti’s lawyer said was a fabricated case.

Lutzkie claims that in 2019, having returned from his stint in prison in Germany, Moti was heavily exposed to Investec Bank, which FerroChrome Furnaces owed R1.8-billion.

In February 2020, Investec threatened to call in security for the debt, which would have had disastrous implications for the Moti group and Moti personally.

Another group company also owed about $30-million (about R500-million) to Glencore, via a loan used to fund part of Moti’s Zimbabwean operation.

To secure the cash he needed, Moti agreed to sell Lutzkie a stake in Kilken.

Moti had given various personal guarantees to Investec and, says Lutzkie, “As such, Moti began a campaign of raising funds from various businessmen including myself…”

In January 2020, Moti and Lutzkie signed the first of a series of agreements that would eventually see Lutzkie part with R242-million in return for his 35% stake in Kilken held via different companies in his New Salt Rock City group (NSRC).

According to Lutzkie, he had agreed with Moti that the joint venture’s profits would be split according to shareholding. That meant 30% would go the BEE partner, Imbani Minerals.

The remaining 70% would be split between Lutzkie and Moti according to their ownership of Kilken. Lutzkie says he understood about half of Moti’s majority share of the profits would go to service Moti’s debt to Glencore, but he claims he was assured this would not affect his own profit flow.

The way the joint venture worked was that RPM effectively deducted an agreed operational cost from the money due to the JV partners for the recovered ore, so that money paid out to them had few other obvious overheads attached.

Lutzkie clearly believed most of this cash would flow to the partners as profit.

A bromance goes bad

Lutzkie has cited a hand-written note and WhatsApp messages from Moti to substantiate his version of the promised profit share.

They show that Moti buttered up Lutzkie and encouraged his belief that the profits would flow freely in proportion to his shareholding.

One message, apparently sent during hard lockdown in 2020, states, “Frikkie our agreement on the dividend issue was that we issue as much dividends if not all available money’s monthly. On fact you already received R10m+ my brother in a very short pace of time and in a time of doom and gloom.”

Another notes, “Frikkie bro. First R20m in. Sending you your first R6m. Another R10m to come in and I will on send you your R3m. Almost got R10m for you but I will try pull more money for us. Hope you happy with me as your partner bro. Never been happier to send a good man some money back.”

But after a few initial payments totalling around R13.5-million, Lutzkie says that the money stopped flowing.

He says he only later discovered that all of Kilken’s cashflow was ceded to a Glencore-linked company referred to as KCo, cutting him out as a shareholder.

This arrangement, Lutzkie argues, meant that what should have been Kilken revenue was being diverted to service Moti’s debt, which had nothing to do with Kilken.

In reply on behalf of the Moti Group respondents, Kilken acting chief executive officer David Willoughby maintains that the obligations to Glencore were fully and properly disclosed to Lutzkie.

This is something Lutzkie vehemently denies, arguing he would never have entered into the transaction had he been aware that the full income of Kilken was encumbered.

Stolen profits?

Annexed to Lutzkie’s court papers are documents he alleges were hidden from him and which he claims throw a different light on the “KCo obligation” that he was aware of.

One is a letter from July 2020 signed by Kilken director and former Moti confidante Ashruf Kaka and addressed to Imbani, the BEE partner in the joint venture.

The letter notes that RPM – the company whose tailings the joint venture processes – would continue to credit the joint venture directly for its operating costs, continue to pay the 30% balance to Imbani, but would redirect the 70% due to Kilken to Glencore’s KCo instead of to Kilken.

This was the culmination of protracted negotiations between the Moti Group and Glencore.

Willoughby’s affidavit sets out how the Moti Group was indebted to Glencore for funds loaned to one of its subsidiaries by KCo to finance the group’s chrome mining operation in Zimbabwe.

As part of that transaction, Glencore would have off-take rights to Moti’s African Chrome Fields and the money would be paid back from proceeds of the sale of chrome. But in 2019  Moti’s company was forced to suspend production.

Negotiations to restructure the loan then followed at the same time Moti was negotiating with Lutzkie over Kilken.

A second document revealed by Lutzkie is a “strictly private and confidential” memorandum of understanding between Moti Group companies and KCo from 9 January 2020 – a week before the initial agreement with Lutzkie was signed.

It outlines a new arrangement that Willoughby says was the basis for the loan’s restructuring. Kilken would now effectively assume the debt, and pay KCo a minimum of $135 000 and a maximum of $350 000 per month until the balance of $30-million was paid off.

The memo also commits to ceding to KCo all Kilken’s rights to receive payments from RPM as security for repayment of the debt.

The memo was later formalised in a set of agreements between Kilken and KCo, which effectively allowed KCo to deduct the loan repayments directly from the RPM income and only pay on to Kilken any amount above the monthly repayment that was due.

The memorandum notes that “If Moti Group disposes of a part or their entire interest in the Kilken JV and does not settle the balance due to KCo… then arrangements in terms of this document will remain in place”.

If the arrangement was in place after Lutzkie bought his stake in Kilken, without adjustments to cater for his share of income, then he would stand to lose out on income he says was due to him.

Lutzkie claims in his affidavit that he was kept in the dark about the arrangement with KCo and Glencore and that he never had sight of the relevant documents until recently.

Moti’s version

Moti and his associates have hit back at this claim.

In his affidavit, Willoughby alleges that Lutzkie was kept fully appraised of obligations to KCo and Glencore.

Willoughby claims that Lutzkie and his advisors have “known about the various transactions and matters now complained of, in some respects for nearly three years, yet now demand that the court decide this application urgently”.

He argues strongly that Lutzkie has abused the court process by seeking urgent relief for a matter that was not inherently urgent.

He claims the loan arrangement with KCo is above board, and that “It is common business practice in large groups for one entity to provide security for the performance of another entity’s obligation within the group. There is nothing sinister or unusual in such arrangements.”

The restructured loan, says Willoughby, “has no impact on determining the revenue or profitability of the Kilken-lmbani JV or Kilken as these arrangements relate only to how cashflows are allocated”.

He claims that the KCo debt is not disclosed in Kilken’s financials because it is a debt of Moti Group companies, not Kilken.

But he seemingly cannot point to anywhere in the most recent audited accounts where the benefit flowing to Moti in the form of debt repayments assumed by Kilken is disclosed and accounted for.

In response, Lutzkie says that the characterisation of this as a cashflow allocation “does not render it lawful or regular”, and that “The facts speak for themselves: the income of the [Kilken] is being paid, in full, directly to Glencore, instead of to the [Kilken]. This is not disputed and the prejudice is clear.”

Lutzkie says Kilken “had no causal link to the debts”.

“The allegation by Moti that it would be considered ‘normal’ to pay such a debt from a company not owned exclusively by him is outlandish and, quite simply, a frivolous excuse for behaviour which is unacceptable and, quite frankly, criminal.”

Lutzkie denies Willoughby’s claim that the memorandum was given to him and his advisors at a meeting at Zimbali as early as the second week of January 2020.

He claims the contracts used to implement the arrangement were also kept from him.

The disclosures about the KCo obligation that were indeed made, such as in the shareholder agreement signed with Ludzkie, appear to offer reassurances.

They noted the debt to Glencore but stated that repayments would be made from the Moti Group’s interest in Kilken and that the purchaser, Lutzkie, “will not be required to make any contribution towards the obligations”.

“The dividends and distributions payable to the purchaser from the purchaser’s direct and indirect shareholding in the company will be calculated exclusive of any obligations by the company to Glencore.”

In essence, Lutzkie argues that these parts of the deal were not honoured. He claims profits he was entitled to did not flow to him because they were used to settle Moti’s unrelated debt.

Holding no punches

The two warring businessmen have used every opportunity available in the court papers to question the other’s character.

In his papers, Lutzkie brings up the killing of diamond dealer Sylla Moussa, insinuating that his murder was convenient for Moti as Moussa had brought criminal proceedings in Switzerland against him that were yet to be concluded.

Willoughby dismisses the claim as “ridiculous”, saying that Moti was only a witness in the criminal matter, not an accused.

Moussa was killed in an apparent hit on 20 August this year when his car was ambushed by gunmen near Carletonville.

Willoughby’s affidavit claims that Moti only found out about Moussa’s death from media reports. However, as far as is known no media had reported the killing by the time the affidavit was signed on 14 November.

TimesLive only broke the story on 17 November.

“In fact, Moti lied under oath again,” says Lutzkie. “Moti knew of Moussa’s death approximately 3 hours after Moussa was pronounced dead and, in fact, he communicated this knowledge to his own management team on WhatsApp”.

A screenshot of a Whatsapp conversation appended to court papers shows that Moti messaged his management team at 7:12 in the morning on Sunday, 21 August, informing them of Moussa’s death. Moti writes: “Pls inform our attorneys in Switzerland. End of this chapter I guess”.

Moussa had died only hours earlier, having been shot the previous evening.

“It is certainly not the conduct of an innocent person to blatantly lie about where they learnt information if they have nothing to hide,” says Lutzkie.

Lutzkie himself has a colourful past. He survived a dramatic attempt on his life in 2010 and has long been suspected of having one foot in the underworld.

Lutzkie was named in connection with the 2011 disappearance of Ralph Haynes, the “godfather of the West Rand” who was once part of a gang that included apartheid hitman Ferdi Barnard.

Haynes’ confidante Dawie Lotter said he last saw Haynes getting into Lutzkie’s helicopter at an airfield outside Pretoria.

Media reported that Lutzkie was questioned after his Ford Bantum bakkie, which he had lent Haynes, was found abandoned near Bronkhorspruit at the time of the disappearance.

He denied any wrongdoing and told media that he had witnesses who saw Haynes driving away from Lutzkie’s home in the bakkie.

Threats and ‘sex abuse’

Moti meanwhile has lobbed a grenade in Lutzkie’s direction, accusing him of having got underworld figure Mark Lifman to intimidate Moti into buying back Lutzkie’s shares at his asking price.Willoughby’s affidavit reads: “Lifman advised Moti that Lutzkie wished him to convey to Moti that he wanted approximately R1-billion for its minority shareholding in Kilken failing which Moti would be ‘sorted out’ and ‘terminated’.”

It is a claim Lutzkie has tried to throw back at Moti.

“The irony of this is that Moti selected Mark Litman, one of his best friends, and known associates, as the alleged ‘knee-breaker’ that was supposedly acting on my behalf,” says Lutzkie in his affidavit, who cites a 2014 debt agreement in terms of which a Moti company would loan Lifman R560 000 for what Lutzkie claims were the latter’s “massive tax debts”.

“Moti has been shown to have known about a rival’s death before their family and is a close associate of Lifman. Perhaps I should be the one afraid for my life,” says Lutzkie.

The legal battle has also brought to the surface allegations of sexual abuse and a coverup at the Moti Group, with Lutzkie setting his sights on a former senior employee.

Lutzkie alleges that former employee’s exit was styled as retirement, but in fact he “had his employment terminated as a result of severe sexual misconduct”.

This, says Lutzkie, is “evidence that criminal behaviour within the Moti Group is deliberately and intentionally hidden”.

Willoughby’s response is that “allegations as to misconduct are irrelevant, vexatious and again inserted maliciously”.

In his replying papers, Lutzkie hammers home his point, attaching settlement agreements that the group signed with three separate women who accused the former employee of sexual abuse.

Lutzkie says that he was unaware of these issues, and that “the authorisation of shareholders should have been obtained before paying a sexual predator and his victims to silence his offences committed in the course and scope of his employment”.

“This further shows the misconduct of the delinquent board of directors who all fall to be dismissed from their offices and barred from acting in such capacity in future.”

The Kilken case is expected to be  argued early next year.

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Micah Reddy and Sam Sole

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