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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 6676/2017

Not reportable

Not of interest to other judges

Revised.

13 November 2017

In the matter between:

REGISTRAR OF BANKS                                                                                        Applicant

and

SAMBO, SIKHETO SHADRACK                                                                       Respondent

(Identity Number: […], born […] February 1974, an adult male, married out of community of property to Mankoko Agnes Sambo with identity number […], born […] September 1973)

 

JUDGMENT

 

MODIBA, J:

[1] This is an opposed application by the Registrar of Banks ("the Registrar”), for the provisional sequestration of the estate of Sikheto Shadrack Sambo (Samba) in terms of section 83(3)(b)[1] and section 84(1A)(c)[2] of the Banks Act 94 of 1990. Unless otherwise indicated, all references to statutory provisions are to this Act.

[2] Sambo filed opposing papers. However, his counsel failed to file heads of argument and a practice note as required by Chapter 9.8 of the Practice Directive. On 17 October 2017, I addressed a directive to his attorney of record drawing their attention to this occurrence and affording them until 23 October 2017 to remedy it. They failed to comply with the directive. They briefed counsel to appear at the hearing to request that the matter be postponed. I refused to entertain this application for several reasons. No formal postponement application was filed. Sambo's counsel sought to move the application from the bar on unattested averments. He was not properly briefed in that he did not have papers filed in this matter. This led to him making submissions contrary to the state of affairs as reflected in the papers. The Registrar's attorneys received no prior communication from Sambo's attorneys regarding the proposed postponement.

[3] Given that Samba's counsel was only briefed to ask for a postponement, after I refused to entertain that request, he withdrew from the matter. I proceeded to deal with the matter as an opposed application given that despite there being no appearance on his behalf. Sambo had filed opposing papers.

[4] The facts underpinning the application are largely common cause. Samba participated both as a participant and solicitor of deposits from the public in the conduct of a scheme, known as the Travel Venture International Scheme ("the scheme”). The scheme was conducted internationally and in South Africa. In South Africa participants have invested approximately R1.6 billion in the scheme. As part of his role in the scheme, Sambo collected about R27, 755, 083 from investors. These monies were deposited into various bank accounts.

[5] The Registrar alleges that Samba's participation in the scheme contravenes section 11[3] read with section 17[4] of the Act in that the scheme is part of a deposit-taking pyramid scheme. On 14 October 2011, the Registrar issued a written direction in terms of section 83(1)[5] calling on Sambo to repay all monies that he obtained as part of the scheme.

[6] The Registrar also relies on section 84(1A) (c). In terms of this section, where the repayment administrator forms the opinion that the person subject to a repayment direction is insolvent, the Registrar is empowered, notwithstanding anything contrary contained in any law relating to insolvency, to apply for the sequestration of that person's estate.

[7] Subsequent to the Registrar issuing the repayment direction, repayment administrators were appointed to manage and control the repayment of the money Samba obtained as part of the scheme. During March 2014 the repayment administrators issued a report concluding that Samba was insolvent. On 2 February 2016, the repayment administrators issued a follow up report confirming that Sambo was both factually and commercially insolvent due to a significant shortfall between his identified assets and liabilities.

[8] Sambo does not dispute any of the above. He disputes his liability to repay the money. He contends that that scheme is not unlawful. Samba's disputation of the unlawfulness of the scheme constitutes a bare denial. He has failed to substantiate it in his answering affidavit. There is no basis for this court to consider his contention that the scheme is not unlawful. I therefore find that the scheme is unlawful on the basis alleged by the Registrar. It follows that Samba is liable to repay the money to investors in line with the Registrar's payment directive.

[9] Samba's second ground of opposition is that he intends reviewing the Registrar's decision to issue the repayment direction. There are no prospects that the Registrar's decision to issue the repayment direction will be set aside on review. The Registrar's decision to issue the repayment direction was made in October 2011. Samba unsuccessfully instituted an internal review to the board of review. The decision of the review board was communicated to Sambo's attorneys on 19 September 2012. The 180-day period in which he ought to bring a judicial review application in terms of section 7(1) of the Promotion of Administrative Justice Act 2000 ("PAJA") expired in March 2013. To date he has not instituted that application. He has not set out the basis on which the court would allow him in terms of section 9 of PAJA to bring the judicial review application five years after the internal review was finalised. He has also not set out the basis on which the repayment direction is liable to be set aside on review.

[10] None of the grounds of opposition advanced by Samba are legally sustainable. They stand to be rejected.

[11] Samba's refusal to repay the money as well the repayment administrators' opinion that he is insolvent locates him within the ambit of section 83(3)(b) and section 84(1A)(c) of the Act. Therefore the Registrar is entitled, notwithstanding anything to the contrary contained in any law, to bring this application.

[12] There is a huge disparity between Samba's identified assets and the money he is found to have obtained as part of the scheme. A substantial portion of this money remains unaccounted for. People who invested this money are yet to be repaid as per the Registrar's repayment directive. His provisional sequestration will allow an investigation on the stream of -this money with a view to satisfying investors' claims.

[13] In the premises, I am satisfied that the Registrar has made out a case for the provisional sequestration of Samba's estate in terms of both sections 83(3) (b} and section 84(1A} (c) of the Banks Act.

[14] I therefore make the following order:

 

ORDER

1. The respondent's estate is placed under provisional sequestration in the hands of the Master of the High Court, Johannesburg;

2. A rule nisi is issued calling upon the respondent and all other interested persons to appear at 10 am on 4 December 2017 or soon thereafter as the matter may be heard to show cause why:

2.1 an order should not be granted finally sequestrating the estate of the respondent in the hands of the Master of the High Court, Johannesburg;

2.2 the costs of the application should not be costs in the sequestration.

3. The respondent is directed to keep the investigation report and the solvency report annexed to the applicant's founding affidavit as "FA7'' and "FA8" confidential and not to disclose it to any person other than

 

____________________

MS.L. T. MODIBA

JUDGE OF THE HIGH COURT

GAUTENG LOCAL DIVISION, JOHANNESBURG

 

APPEARENCES:

Applicant's Counsel: B.M Gilbert with Ms Phalane

Instructed by: Baker Mckenzie

Respondent's Counsel: E. Sithole (only for the postponement application)

Instructed by: T. Ngcobo Attorneys

Date heard: 30 October 2017

Date delivered: 13 November 2017

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