Directors Duties and Liabilities in RSA

[Asterix]

Hi all.

I worked in RSA for many years in middle and upper management before working overseas and progressing to Directorship (several). A friend of mine has just advised me that a small Finance company director in Gauteng recently closed a string of businesses of which he was a Director, with his wife by voluntary liquidation through CIPRO and mysteriously declared all the accounts, records and assets (including the entire Debtors book) - along with R30 million of investors funds missing.

Now, I am not sure how things work in RSA these days, but as far as I know The Companies Act and Crown Law still apply. The company was called Dr DS Grieve Bridging Solutions and most of the "victims" are former patients, elderly, sick and retired pensioners. This can be confirmed by a simple Google search on Dr DS Grieve or Dr David Stephen Grieve which will also lead you to The Green Gazette as well as a large number of reports, photographs and even a CIPRO extract. Not surprisingly, these all follow one train of thought - and where there is smoke, there is generally fire....

Thoughts are that the only reason for this must be to cover for massive fraud and embezzlement. Any thoughts on this most welcome - I am inquiring on behalf of one of the elderly stuck now in poverty in RSA, old, infirm and in trouble....

Would be very very interested in any perspective on this especially from any other Directors around....especially any finance company or business Directors....

[Lawyer Destroyer]

Well first thing Asterix, I stumbled on to this quite by chance but felt compelled to add my 5c worth as this has taken my interest and is a subject I know a lot about (liquidations and lawyers - not this case). After trawling around the internet a bit, surprisingly enough, a lot of information surfaced, not lastly from The Green Gazette. Now, interestingly enough, the lawyer concerned here is Mr Willem Storm from Pretoria with whom I have crossed swords before. Mr Willem Storms reputation always precedes him and it is astonishing to me how several liquidations that he has done all follow this same modus operandi with him - unique to him. I am surprised Ben Nell (Master of The High Court) and the others have not taken picked up on or taken notice of this yet. (I will probably flick him this to read).Also involved in this particular episode is LVK Trust CC - who also have a reputation...

Fact - LVK Trust cc and Willem Storm are old old buddies (Willem ? Truta? Dewald ?) and part of the Pretoria BinneKring, which is kind of like an old guard of the old glory days....Their history together goes back many many years and to many many social events too.. I feel I can substantiate this and can post proof if required.

My first impressions - Asterix - your friend is in trouble. The Grieve saga is all over the show - and you know what they say - where there is smoke there is fire.....and I can smell something from here already.......
A quick search through a few official data bases I have access to show Grieve has what is termed "history". This is not his first venture onto or into the dark side. In fact he and his wife are referred to interestingly as a pair of Veloceraptors. Now, I don't know if you saw Jurassic Park, but these are animals without conscience, they scheme, work together to trap and deceive throughout their hunting cycle. And show no mercy.....an interesting phenomena for a medical doctor....mmmmmhhhhhh

Grieve and his consorts would have planned and produced this end game over time, doing a little bit each day, working their way towards an end goal. No doubt they hiked all their fixed asset mortgages to the hilt, scooped their credit cards to the max and fell behind in any and every payment due up until their closure. No doubt they would have maximised on all available revenue streams capable of being drained - and drained them to the max. Grieves proposals would probably have worked, but I would bet 10cents to a bar of gold that he was simply not capable of effectively managing a concern that required strong reigning. My guess, he saw this as a maximization opportunity and took it. I will look a bit closer at the his and hers situation and see if I can gleam anything out of the ordinary for you later. Generally a debtor like this tends to take the easy trusted route and put everything into his wife's name, but washing it through a series of trusts and other accounts first. Its all smoke mirrors and bulldust - follow the money - its easy - there's a rainbow - don't try and climb it - just head towards the pot of gold at the end. Sooner or later - you will find the end of the rainbow. Don't try and find everything just enough to get the criminal actions stimulated - that's when the big boys step in and take over - and that's the point of no return for the criminals. The law is hard to start and real hard to stop once its moving.....

My advice - get your friend to a good firm of Insolvency Lawyers (Gauteng has a number). This will result in a series of actions, but most importantly will be to get the Veloceraptors cornered and then caged. Now it may be expensive, but in the long run you will agree worth it. If let alone, your friend will be lucky to get 7 - 10 c in the rand. However if he persists, and is aggressive enough - he will get these people into a corner and then "the waste will hit the air conditioning". He will probably go to jail - they don't assume anyone will ever take them on for less than say (what is it these days R20 million). What has happened is nothing new.....these liquidators and lawyers do this everyday - they dance and skirt around the real issues putting all the relevant material into the "too hard basket", the irrelevant material gets glossed over and the money gets put in the bank (mainly theirs and the directors).

South Africa is in a state business wise. You can compare RSA business to a free for all on the roads. The drivers (directors) aren't qualified in many cases, driving vehicles, too big, too fast and out of control. There's a lot of drunk driving taking place, unlicensed driving and buying and selling of stolen "vehicles" and parts that would blow your mind. If the RSA Government wants to do one thing to fix the economy, just one thing, it would be to tighten up its business Highways. License drivers (directors) effectively, train them proficiently - but most of all, punish them firmly, just like we do on the roads. What would we say if the highways were actually a free for all and there was pandemonium on the roads....bystanders getting hurt and killed, passengers, drivers and the public getting slaughtered...? well its actually happening on our business highways - and its appalling! No wonder no one wants to invest in our small to medium businesses, no wonder they call it Rip Off RSA, no wonder we are known as being scammers, second only to Nigeria - our business roads are in absolute chaos and very little is being done (I know 3 Kings is coming - too little too late...). A special task force is needed and most of all - efficient policing and jurisdictional enforcement. The commercial branch of the SAPS (sorry guys) is undermanned and overwhelmed and the situation is not getting any better. The burden of financial criminal proof now lies mainly with the individual affected now to prove the case before the police will prosecute. So, Asterix, my advice is go see a big firm, get a negotiated agreement. Take on these business bandits (that's what they are...) and get cracking ok.

PM me for more info - happy to try and assist.

[Asterix]

Hi - thanks for that. Lots of information and too much for me as an outsider to digest. Have passed it on and I am sure your advice will be taken. I still want to get opinion on how a Director/s can get away with this and would like to invite comment from anyone connected with CIPRO - any lawyers who may have the answer - or even a member of the SAPS who could comment (even off the record...). Like that description about RSA's businesses and directors being likened to a free for all on the roads - pretty effective and visually disturbing....have pm'd you my friends details and would appreciate if you can have a few words with him.

[Lawyer Destroyer]

Asterix - had a look at this as an overview for you. The whole micro finance proposal of this company http://www.slideshare.net/DrDSGrieve...s-presentation and the latest one - http://www.slideshare.net/DrDSGrieve...tors-defraudedis probably - I say only possibly - viable under correct diligent - rigid management - but its flawed all over, especially the early one (and from that - both of the Directors are already in serious breach of any protection from the Companies Act... One of the mechanical traps if you would will be to determine from the company bank records a simple fundamental:-

Firstly was it a Ponzi scheme ? The definition in a simple form:-
Ponzi schemes: Guaranteed to collapse, money from new investors is used to provide a return to previous investors. The scheme fails when money owed to previous investors is greater than the money that can be raised from new ones. or
A fraud disguised as an investment opportunity, in which initial investors and the perpetrators of the fraud are paid out of funds raised from later investors, and the later investors lose all funds invested.

So - in order to prove this all your friend has to do is determine wether or not a direct investment (must be specific) credit from an investor was used to pay interest to an existing investor - at any time prior to or during the lead up to collapse/liquidation in what is known as "the specified period". If the answer is yes - that director/ is going to probably go to jail. It is not only fraud, but then escalates the legal situation to fraud with criminal intent. Normally one finds that along with payments of interest to investors to keep them happy there is also diversification to alternate accounts, family, friends, wives and even girlfriends -not to mention payments to other companies, credit and finance providers and of course the old credit cards......this is simple embezzlement and first degree fraud - if you can find any proof of it coming direct from an investors payment - no doubt.

The recent Krion case is a bench mark and satisfactory outcome....(I provided assistance and determination on this as well)

http://www.iol.co.za/news/crime-cour...ailed-1.686422One of the key statements made was this " “The fact that she knew in taking each investment that she could not pay the investor back, did not stop her. It in fact it fired her up to take more investments so she could keep her previous investors happy so that they could in turn refer new investors to her".

Sounds like it could be a similar saga but on a smaller basis - but the legal findings and ultimate consequences should not be too dissimilar of the case is proven.

Until I saw your initial post I had not taken an interest in this case - but as it has now caught several eyes - we will be watching it closely. Your friend should not roll over and die. He has to fight for his (her ?) cause now like never before...

PM me more details if you want to...

[Lawyer Destroyer]

Directors Duties and Liabilities in RSA vav Dr DS Grieve Liquidation by LVK Trust cc with Willem Storm of Storm Attorneys (Pretoria).

Asterix - and others. I have received a number of PM's on this subject, as well as a flurry of emails which have become daunting. Therefore I will stop most PM's and emails and write up on the board. I have started a background check and done some research into the primary business mentioned - The current status of affairs is such:-

1. An absolutely absurd and badly compiled application was made in December 2009 to liquidate a large number of Grieve's businesses - this was what we call a quick and dirty application, which but for a sharp eyed judge, may just have sneaked in....Yes - these things happen. This application (which I have a copy of and will probably publish later) was declined by the court - the application and supporting documentation and evidence was nonsensical and bungled. This was then repeated via CIPRO (a backdoor "voluntary" liquidation) in January 2010.

2. A leading law firm in Sandton has challenged the voluntary liquidation application and had it converted into a compulsory liquidation. This opens a whole new set of legal curtains and changes the playing fields significantly for the application makers. It also changes the situation dramatically for those who applied for the voluntary liquidation.

3. The companies of Dr D Grieve, specifically Dr DS Grieve Bridging Solutions a Pty Ltd entity has been made the Special Inquiry subject of a small group of creditors. Many debtors underestimate the seriousness of their situation when this happens and the resulting consequences can, if fault is found or discovered in the form of fraud, reckless or negligent trading, malfeasance or any other of a host of business "sins", be fast and ruthless against the directors.

That in a nutshell is the current state. So - Asterix - I cannot deal with your friend directly, for professional reasons, although you have provided me with details - so I will post a bit here and continue this thread for awhile as things progress and materialise - and I am watching this saga unfold carefully along with a number of colleagues for many different reasons.

However - in the interests of the broader spectrum of forum readers and visitors I intend to start a new thread entitled - Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery Of Fraud/Malfeasance. in it I will provide some discovery about specific instances, particular liquidators and certain lawyers as well as how they circumvent their legal duties and responsibilities and then the tricks they play, the role of the "friendly liquidator", the illusions they create and the methods they use to create a massive profit for some from the carnage of others - legally - its scandalous - but they do it, and even orchestrate it. This is probably going to upset a number of lawyers and liquidators....but it is all fact and truth - the two things they cannot escape from....

But keep watching this thread ok Asterix - I am going to post a lot more as I go through the process of monitoring this - and you should tell your friend to read my posts carefully.

[Asterix]

LD - very good. I told my friend to watch and he has advised the people involved to watch as well. Your advice is good - thanks. We will keep watching this thread for your posts. You have not answered my other PM's ? did you get them. My friend has asked you for some details but has not heard from you by PM either.....but thanks a lot for what you have told us.

back to the grindstone - or should I say drawing board! I'm working for a big firm of architects now

We look forwards to your comments and thanks for the help ok.

[Lawyer Destroyer]

OK – Back from Cape Town and catching up. I asked around a bit on this saga and got a colleague who has some specialist access to have a quick glance and do some research for me as well. Asterix (and friend/s – fellow Gauls?) – You must push this particular issue into criminal charges, there are several reasons, some which I cannot share with you right now, but which will become clear later. There is an old maxim “seek and ye shall find…�. You may not have the tools or the access at the moment, but there are those that do and they are already briefed and waiting in the wings – waiting and watching…..

This situation is going from Gray to Black very quickly. You need to determine initially if it is a Ponzi scheme or not. Once that is determined the way forward becomes very very clear – quickly. As I wrote earlier and presented a definition, you need to match this up to available information and facts – once established, the fun and games begin. From what I can see and from what I have gathered……it smells like a Ponzi scheme, it sounds like a Ponzi scheme, and it clearly resembles a Ponzi scheme. This is a serious situation and needs to be treated seriously ok. People who commit these are always con artists with silver tongues, credible people who present well, convincing individuals who have support from their own family members and relatives, their own “infrastructure� – “vra my broer Jack, hy lieg net so hard soos ek….�who for the large part have been compartmentalised and only have parts of the truth….. If your friend has not spent the money on a private investigator yet – now is an ideal time….there are a number of really good ones and alongside a good reputable law firm are an arsenal and formidable force – . Next he/she must team up with the group who are already contesting/investigating the business collapse (unity is strength). Lastly – go in and see a member of the SAPS who deals with this type of action. Just ask at your local police station – they will point you in the right direction. This will prepare you for what you have to do next. Finally and I have PM’d you both a specific checklist. This is a dirty situation and you need to ensure that you stay and play by the rules all the time. There will be many opportunities to slide bases – take no shortcuts, just do this one step at a time, one day at a time. Remember if you sit by the river of life long enough the bodies of your enemies will eventually float by you…..

In the greater scheme of things this is a small fry liquidation, but a very good example to be set especially from what I have seen and can gather. So, persist in your efforts and remember the words of Winston Churchill – Never, never,never,never, never, never give up.

I have asked a number of friends and colleagues to follow this particular case and we will send you a PM link to a separate location where we will give you the benefit of specialist advice (not professional mind you) as well as otherwise unobtainable information that your friend/s will find invaluable. We will not mention names or anything else – don’t want the bad guys in this story knowing any more than they do ok.

As things develop I will let you know, but in the meantime, I want to rather focus on the other thread http://www.theforumsa.co.za/forums/s...s-Or-Discovery to the benefit of the broader business community. It is a very sensitive subject and I am going to try and play it out as an educational process in steps. Please follow that one too….it is important and will also reference several areas and information you and your friend may find applicable and useful.

[Lawyer Destroyer]

Asterix and others – In continuation with this thread and the research carried out so far:-

Let us first test the situation:-

What is a Ponzi Scheme ?

According to the US SEC (reference http://www.sec.gov/answers/ponzi.htm)
What is a Ponzi scheme?
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
What are some Ponzi scheme “red flags�?
Many Ponzi schemes share common characteristics. Look for these warning signs:

• High investment returns with little or no risk.
• Overly consistent returns.
• Unregistered investments.
• Unlicensed sellers.
• Secretive and/or complex strategies.
• Issues with paperwork.
• Difficulty receiving payments.

Now, I don’t want to guess what this DS Grieve Bridging Solutions (Pty) Ltd was and I don’t want to try and outguess any Judge who may end up ruling on this but the old saying….If it looks like a duck, walks like a duck and quacks like a duck…..may just be applicable.

[Asterix]

LD - Thanks for the info - and for all the information. That is unbelievable. You must be a wizard to have such unbelievable knowledge. I also enjoyed reading the other posting on the liquidations thread - thanks.

[Ruiter In Swart]

Ek kan Engels lees maar swak skryf...so. Ek ken die ou hoor. Toe ek die storie lees was ek glad nie verbaas nie. Die selfde Dr Grieve het n’ Ponzi skema in omtrent 2000 – 2001/2 ek dink dit was, gehardloop toe hy nog dokter was in Clubview. Die ou kon so goed lieg – en hy het sy naam as dokter gebruik en misbruik – jong! Hy was nie skaam nie. Hy het toe al sy beleggers se geld verloor. Hy is n’ blik emmer hoor. Die Skerpioene het hom toe al ondersoek en sy prokureur het gepleit dat hy alles sou reg maak en hy het die beleggers toe uit sy eie sak blykbaar terug betaal – dus was daar nie kriminele klagtes teen hom gele nie. Die ou het sy eerste vrou ook lelik verneuk en al haar families se gelde blykbaar gevat. Hy kan glad nie vertrou word nie. Hy het heen en weer probeer om my en ander te oorreed dat hy n’ regte finansies maatskappy gehad het April maand laas jaar en weer in Julie maand, maar ons het geweet hy is net skelm en hom vermy. Hy kon nie eers sy balans staat vir ons wys nie - net prente op papier om te wys wat verdien hy.....maar borrelgom, niks feite nie - daar was geen feite nie. Hy het gehardloop toe ons se ons sal die boeke laat oudit eers.....toe was dit een rede na die ander.....Hy het so gelieg. Ek het vir almal vertel – moet niks met die ou te doen hê nie, jy gaan jou geld verloor. Hy het n’ groot verhouding met n’ meisie kelner by sy restaurant Cynthia’s gehad en dit was agter sy vrou se rug en het vir n’ lang tyd aangegaan. Hy kon homself net nie inhou nie. Sy het haarself na ure sat gedrink aanhoudend en verniet op die restaurant se onkoste en het ons soms verniet drank gegee agter sy rug. Sy was verseker nie mooi mens nie – n’ regte madam van Welkom af wat haar oog altyd op die geld, net die geld, altyd gehad het. Moes altyd almal wys hoe beter sy was en hoeveel sy kon spandeer… . As ek enige iemand nou raad kan gee – loop direk SAPS toe ssm en kla hom aan. Sy besigheid was nog nooit n’ ordentlike besigheid nie en hy het net mense se geld ingetrek om te vat. Soos ek gesê het – ek ken die ou en hy is oneerlik en skelm – n’ regte egte slegte persoon. Julle moenie sy k – a – k vat nie. Hy lieg en swaai soos n’ blaar in die wind. En sy tweede vrou, die kelner, ek dink haar naam was Sanet – wat n treinwraak, die meisie was slegte nuus jong. Maar hy, wat so geleerde man is, dat hy sulke nonsens aanjaag, ja nee. Die enigste tyd wat sy lippe nie beweeg nie is wanneer hy die waarheid praat …..Die volgende eerlike verklaring wat hy maak – sal sy eerste een wees. Ek weet – hy het sy leuens by my ook aangebring. Aanhoudend. Maar ek het geweet, hy is niks werd nie en net n’ slegte luiperd wat rondsluip en soek vir prooi . Ek hoop hy swaai – hy het baie mense se lewens verwoes – eintlik albei van hulle. Ek kan nou nog nie glo hoe sleg mens die ou geword het nie. Hulle het Geld voor God gesit – die bewys is daar. Aai slegte mense. Wie ook al die fotos van hulle Facebook profiele gevat het en die woorde “bedrog� ens by gesit het – mooi so. Dis n’ goeie waarskuwing aan almal. Lui die klokkie – laat mense weet, hier kom n’ paar skelms – steek julle geld weg.