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Thread: Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery

  1. #21
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    Company Dclares Insolvency after losign CCMA

    Hi,

    I worked with a company who dismissed me unfairly. There were also a number of other illegal deductions made one of which was the non transfer of my pension fund to the fund. It took almost a year just to get paid my provident fund back. After I won the case at the CCMA and the appeals were dismissed, the company the applied for the labour court to review the case on 28 MARCH 2011. I opposed it and have labour lawyers looking into the process to speed it up. While trying to collect the illegal deductions the company gave a letter to the sheriff stating they had liquidated the company in APRIL 2011 and transferred assets to a new company and the sheriff had no right to collect any of the assets. In terms of the dismissal case the award is substantial and with interest is already in the region of R250K. While the case might be in review at the labour court, from your posts it appears that I should have been kept abreast of matters and that the transfer of assets is a ploy to avoid paying up. Unfortunately I have also since found out the company owes many other company vast sums of money.

    How do I go forward form here. Is there anyone in specific I can report the matter to?
    Can I have them investigated. Fortunately I am working and financially able to take the matter further. I would also like to know if I have to incur legal cost can it then be added to what they already owe me to pay back? I believe they are being criminal and it all looks very orchestrated and while I would love to see the owner safely behind bars where he can't destroy people lives anymore, I'd be happy just to collect the money and move on. Unfortunately the owner has quite a reputation already, I only found out too late. This may also not be the first time this has happened. The company ran under a different name before and went through similar problems, I don't know the detail.

  2. #22
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    Biggles - Insolvency Problem with company

    Biggles,

    It sounds to me vaguely as if the business has been resurrected specifically to circumvent insolvency and to accommodate assets and workflow during a liquidation or insolvency. This is called a Phoenix company. You have to prove it if you want to challenge it. The onus and burden of proof is on you - if you want to challenge it ok.

    If you do - collate ALL the information you have into a fully and neatly laid out affidavit with referenced attachments. If you cannot do it to accepted legal standard that's fine - do it to best possible standard. Just don't go and dump a lever arch file, a bundle or an A4 box of scraps and bits which are unexplained before a lawyer. He won't know a Mona Lisa from a car wash flyer ok.

    Then, if you are satisfied and have assembled your evidence - even if it is just reasoning and reasons - take it to a reputable lawyer - in this case the one I have in mind and who I have dealt with over years is Eric Levenstein - specifically because of his close ties with INSOL - I did send you a full PM with other - very important instructions as well.

    http://www.werksmans.co.za/people/28/Eric-Levenstein

    Present your case and ask him what next. It may be as simple as a formal complaint through INSOL, but it may also be a legal action which he can structure and advise you on....

    LD

    Quote Originally Posted by Biggles1212 View Post
    Hi,

    I worked with a company who dismissed me unfairly. There were also a number of other illegal deductions made one of which was the non transfer of my pension fund to the fund. It took almost a year just to get paid my provident fund back. After I won the case at the CCMA and the appeals were dismissed, the company the applied for the labour court to review the case on 28 MARCH 2011. I opposed it and have labour lawyers looking into the process to speed it up. While trying to collect the illegal deductions the company gave a letter to the sheriff stating they had liquidated the company in APRIL 2011 and transferred assets to a new company and the sheriff had no right to collect any of the assets. In terms of the dismissal case the award is substantial and with interest is already in the region of R250K. While the case might be in review at the labour court, from your posts it appears that I should have been kept abreast of matters and that the transfer of assets is a ploy to avoid paying up. Unfortunately I have also since found out the company owes many other company vast sums of money.

    How do I go forward form here. Is there anyone in specific I can report the matter to?
    Can I have them investigated. Fortunately I am working and financially able to take the matter further. I would also like to know if I have to incur legal cost can it then be added to what they already owe me to pay back? I believe they are being criminal and it all looks very orchestrated and while I would love to see the owner safely behind bars where he can't destroy people lives anymore, I'd be happy just to collect the money and move on. Unfortunately the owner has quite a reputation already, I only found out too late. This may also not be the first time this has happened. The company ran under a different name before and went through similar problems, I don't know the detail.
    Last edited by Lawyer Destroyer; 16-Sep-11 at 11:28 PM. Reason: sp

  3. #23
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    Biggles - Liquidations Issues

    Biggles,

    further to the above - this may well interest you:-

    [1] In the winding-up of companies liquidators occupy a position of trust, not only towards creditors but also the companies in liquidation whose assets vests in them. Liquidators are required to act in the best interests of creditors. A liquidator should be wholly independent, should regard equally the interests of all creditors, and should carry out his or her duties without fear, favour or prejudice. referenced here today:-
    http://www.google.co.za/url?sa=t&sou...LrHtIIPRWBDAeg

    THE SUPREME COURT OF APPEAL
    REPUBLIC OF SOUTH AFRICA

    JUDGMENT

    Case no: 103/09


    THE STANDARD BANK OF SOUTH AFRICA Appellant

    and

    THE MASTER OF THE HIGH COURT First Respondent
    (EASTERN CAPE DIVISION)

    BASIL BRIAN NEL Second Respondent
    MICHAEL LEO DE VILLIERS Third Respondent
    __________________________________________________ ______________


    Neutral citation: Standard Bank v The Master of the High Court (103/09) [2010] ZASCA 4 (19 February 2010)

    CORAM: Navsa, Ponnan, Maya, Snyders JJA and Griesel AJA

    HEARD: 19 November 2009
    DELIVERED: 19 February 2010
    CORRECTED:

    SUMMARY: Liquidators occupying position of trust towards creditors and companies in liquidation ─ required to be independent and to regard equally the interest of all creditors ─ expected to carry out their duties without fear, favour or prejudice ─ standard not met ─ liquidators removed and fees reduced.

    but - it does take a bit of stamina and endurance ok.

    "There is no vulture or Jackal as ruthless or callous as an untrustworthy or dishonest liquidator in life..."

    - anonymous (although I have heard it said by a number of my learned friends). LD
    Last edited by Lawyer Destroyer; 18-Sep-11 at 10:25 AM. Reason: sp

  4. #24
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    Quote Originally Posted by Biggles1212 View Post
    the company gave a letter to the sheriff stating they had liquidated the company in APRIL 2011 and transferred assets to a new company and the sheriff had no right to collect any of the assets.
    That's the bit that needs a close look, particularly as (by my understanding) all transactions (particularly asset transfers) up to 6 months prior to application for liquidation can be reviewed and reversed if found to "questionable."

    Not sure I've put this very well, but if that transfer of assets you referred to was dodgy, there may be scope to pursue the matter.

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    Liquidations Problems

    Biggles,

    Strange as it may seem, if you have sufficient evidence of wrongdoing and you feel justified (just make sure and test your info carefully) even if a liquidator is involved, there is nothing that stops you filing an affidavit under section 34 of the PCCA and requesting the SAPS to investigate the matter provided you can justify the threshold limit of R100k. Read this very recent press release by Dave Loxton of Werksmans http://news.za.msn.com/white-collar-...ease-werksmans

    So, there is one avenue - if you need a draft affidavit - PM me. They are pretty standard and straight forward - just quote the act and consequences of not reporting as well as the evidential trail and then swear and submit. LD

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    Implementing A Fit & Proper Persons Policy for Directors and Business Owners and Head

    I am so fed up with bad directors, business heads, and key persons and the staggering amount of fraud taking place. RSA is fast declining in the world’s eyes and fast becoming a place to avoid doing any business with except on a strictly cash up front basis. SA businessmen, especially professionals, are fast earning an unwanted and sometimes unwarranted stigma of simple dishonesty. I recently attended a large seminar and every single person who attended commented how they were involved in investigating, examining or advising on mass dishonesty or fraud. A crying shame.
    Unique circumstances call for unique answers and one of the answers I feel needs closer examination and one that I am personally advocating and recommending is the Fit & Proper Persons Declaration by any business head or owner – especially Directors.
    The UK are now following this model successfully and Australia and New Zealand are close behind, the USA is already entrenched. Why not RSA ? the answer to me is simple, I just don’t deal with companies where the principals and directors do not have fully completed and verifiable Fit & Proper Persons Declarations – honest men and women have nothing to fear. This should be absolutely mandatory for any Director and even investors and shareholders should be authenticated properly (inserts a link break in the chain of the Blackmarket economy).

    For your information, the FSB uses this approach for its credit rating agencies and I firmly believe that in terms of holding a company and it’s Director/s responsible so should every honest businessman in RSA – after all –

    Fraud is just like aids in a lot of respects……………..the main one being you will get it from somebody you get into bed with ….

    You should know exactly who you are getting involved with especially in business – remember time spent on a reconnaissance is seldom wasted.

    Just my opinion, but if someone isn’t willing to have ready and provide the answers the following questions or can’t – walk away and thank your lucky stars. Listening to this will probably save you time money and heartache – so read it again.

    Every established company should at least make this requirement mandatory for new appointments or promotions.


    QUESTIONNAIRE TO BE COMPLETED IN RESPECT OF DIRECTORS, SENIOR
    MANAGERS AND KEY EMPLOYEES

    1. Personal details of the director, senior manager or key employee in respect of which
    this questionnaire is being completed:
    1.1. Surname and title:
    1.2. Full first name(s):
    1.3. Any previous surname(s) or first name(s):
    1.4. Indicate the proposed position to be held, e.g. director or managing director:
    1.5. Effective date of appointment (where applicable):
    1.6. Residential address and telephone number:
    1.7. Postal address:
    1.8. Previous residential address(es) during the previous 5 years:
    1.9. Nationality
    Date of birth:
    Place of birth:
    RSA Identity Document number (attach a certified
    copy):
    Passport number:
    Expiry date:
    Country of issue:
    1.10. Nationality and indicate how it was acquired (e.g. birth, naturalisation or
    marriage):
    1.11. Professional qualification(s), the year(s) when, and the institution(s) at which,
    this was acquired (may be provided in separate sheet):
    1.12. Attach completed Personal Credential Verification Forms for purposes of the
    background screening of each director, senior manager or key employee. The
    said forms are obtainable from the Financial Services Board.
    1.13. Attach detailed curriculum vitae.
    2. General details in respect of the individual proposing to become a director, senior
    manager or key employee:
    2.1. State in what capacity you are completing this document, i.e. as a current or
    prospective director (executive or non-executive), senior manager or key
    employee. State full job title and describe the particular duties and
    responsibilities:
    2.2. Significant shareholding history (including indirect holdings) over at least the
    last five years (including only those holdings which provided you a significant
    influence over the operations and affairs of the entity)
    3. Specific test to assess fitness and probity
    If any answers to any of these questions is ‘yes’ please provide details on
    separate pages or in the space provided with proper referencing
    3.1 Have you ever been subject to any proceedings of a disciplinary or criminal
    nature, or have been notified of any impending proceedings or of any
    investigation, which might lead to such proceedings?
    3.2 Have you, or any business in which you have had controlling interest or have
    exercised influence, been investigated, disciplined, suspended or criticized by a
    regulatory or professional body, a court or tribunal, whether publicly or privately?
    3.3Have you ever been associated, in ownership or management capacity, with a
    company, partnership or other business association that has been refused
    registration, authorization, membership or a license to conduct trade, business or
    profession, or has had that registration, authorization, membership or license
    revoked, withdrawn or terminated?
    3.4 As a result of the removal of the relevant license, registration or other
    authority mentioned in question 3 above, have you ever been refused the right to
    carry on a trade, business or profession requiring a license, registration or other
    authorization?
    3.5 Have you ever been subject of any justified complaint relating to regulated
    activities?
    3.6 Have you ever been charged or convicted of any criminal offence, particularly
    an offence relating to dishonesty, fraud, forgery, uttering a forged document,
    perjury any financial crime or other criminal acts or been involved in acts of
    serious financial or other misconduct?
    3.7 Have you ever contravened any of the requirements and standards of a
    regulatory body, professional body, government or its agencies?
    3.8 Have you ever been a director, partner, or otherwise involved in the
    management of a business that has gone into curatorship, insolvency or
    liquidation while you have been connected with that business or within one year
    after that connection?
    3.9 Have you ever been dismissed, asked to resign or resigned, from
    employment or from a position of trust, fiduciary appointment or similar because
    of questions about your honesty and integrity?
    3.10 Have you ever been disqualified, under the Companies Act, 2008 or its
    predecessor or any other financial services legislation or regulation the object of
    which is the protection of the public against financial loss from acting as a
    director or serving in a managerial capacity?
    3.11 Have you ever been diagnosed as being mentally ill or unstable?
    3.12 Have you ever been disciplined by a professional, trade or regulatory body,
    or dismissed or requested to resign from any position or office for negligence,
    incompetence or mismanagement?
    3.13 Have you ever been the subject of any adverse judgment or award, in South
    Africa or elsewhere that remains outstanding or was not satisfied within a
    reasonable period?
    3.14 Have you ever made any arrangements or composition with your creditors,
    filed for bankruptcy, been adjudged bankrupt, had your assets sequestrated, or
    been involved in proceedings relating to any of these?
    3.15 Have you ever been a senior officer of a company or a shareholder in a
    position to exercise influence in the company that:
    (a) Has been the subject of any adverse judgment or award, in South Africa or
    elsewhere, which remains outstanding or was not satisfied within a reasonable
    period?
    (b) Has, in South Africa or elsewhere, made any arrangements or composition
    with its creditors, filed for bankruptcy, been adjudged bankrupt, had assets
    sequestrated, or been involved in proceedings relating to any of the foregoing?

    3.16 Do you have reasons to believe that any of your close relatives or business
    associates, if subject to the above tests, would have responded by a ‘Yes’ to any
    of these questions?

    These questions courtesy of the FSB –

    http://www.pmg.org.za/files/policy/1...quirements.pdf

    Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.
    Samuel Johnson
    English author, critic, & lexicographer (1709 - 1784)
    Last edited by Lawyer Destroyer; 10-Dec-11 at 04:37 AM. Reason: sp

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