The National Director of Public Prosecutions will turn to court next week to obtain an urgent order against Absa Bank, which it said had committed a criminal offence by contravening the Prevention of Organised Crime Act as it paid about R100 million over to the provisional liquidators of Tariomix – this in spite of an earlier preservation order of the funds.
The preservation order was obtained in 2021 by the National Prosecuting Authority (NPA) in which R100m in bank accounts linked to diamond dealer Louis Liebenberg was frozen following allegations of money laundering and that he was running a Ponzi scheme.
The preservation order was later overturned by the Gauteng High Court, Pretoria, following an application by Liebenberg.
The NPA is subsequently appealing this before the Supreme Court of Appeal (SCA) and is still awaiting a date for the hearing.
In papers filed in its urgent bid against Absa Bank and the liquidators, the NPA said the preservation order is still very much in place, as the pending appeal has placed the dismissal of the order on ice.
It said Absa had no right to pay the preserved funds over to the liquidators under these circumstances and that this has been done in contravention of the preservation order.
The prosecuting authority will ask for an urgent order that the funds be returned from the liquidators to Absa, where it is to be held pending the outcome of the appeal proceedings and possible forfeiture proceedings in terms of the Prevention of Organised Crime Act (POCA).
Nicole Peters, attached to the NPA’s Assets Forfeiture Unit, said in an affidavit that the matter was urgent, as she feared that the liquidators may dispose of the money.
Tariomix was provisionally liquidated last year after it was alleged that the company’s business model was a Ponzi scheme which involved investors buying into diamond parcels.
It is said that Tariomix promised to resell at high profits, but many investors did not receive their returns. Many lost vast amounts. It is said that Tariomix collected around R4 billion from investors, which it cannot repay.
Peters said Absa Bank is in possession of the preservation order and is aware of its obligations in terms of the order. “By dispensing the funds, the first respondent (Absa) or their responsible employees, contravened Section 75(2) of POCA, which is a criminal offence,” Peters said.
She said this was not the first time that the bank had disposed of the funds in contravention of POCA. It earlier paid over the money to the South African Revenue Service, but Sars paid the money back after the prosecuting authority intervened.
At the moment the money is with the liquidators, while it should have been kept safely with Absa, Peters said. She stressed that the preservation order is still very much in place, pending the outcome of the SCA proceedings.
She stated that in October last year the law firm acting for the liquidators wrote a letter to Absa, requesting that the money be paid over to the insolvent estate of Tariomix within 48 hours.
She said instead of informing the lawyers that the funds were held under a preservation order and that they could not be released, the bank exceeded the request and released the funds.
“In other words, the first respondent (Absa) gave the letter preference above a court order and breached a court order in doing so.”
Peters further stated that an Absa employee told Melissa Muller, a senior official in the bank’s legal department, that the money was on hold because of the preservation order, but that Muller chose to ignore this and that she insisted that the money be released and paid to the liquidators.
“The second respondent (Muller) was at pains to give preference to the letter (from the law firm) instead of abiding by a high court order,” Peters said.
She added that Muller’s behaviour was “puzzling” since she should have known by virtue of her position as senior legal counsel that there was a hold in terms of the preservation order and that the money could not be released.
She mandated the payment of the money, without notifying the NPA.
When the NPA enquired about the release of the funds, Muller said that the bank would not have the funds returned, as the preservation order had “automatically lapsed” as the appeal was out of time.
Peters said it appeared to be a mere afterthought on the part of Muller and the bank to explain why the funds were transferred in spite of the preservation order.
She said the bank failed in its duty to preserve the funds in their accounts and this situation must be rectified urgently.
Absa is still due to file its opposing papers.
Absa meanwhile responded by saying: “It is Absa’s position that the preservation order was not in force at the time of releasing the funds to the liquidator and it still has not been resurrected by the NPA. Furthermore, the funds are secured by the liquidator in terms of the Insolvency Act and is therefore not at risk of dissipation.”
Pretoria News