Untangling the financial web woven by arch-fraudster Jurgen Harksen has taken the best part of a decade, but the trustees of his insolvent estate feel the end is in sight.
One of them, Michael Lane, said in Cape Town this week that there was still ”quite a lot” of litigation in process, with eight cases pending. However the tempo of the litigation — over assets that the trustees are seeking to reclaim — had reduced dramatically since Harsken left town, he said.
”Once these court cases are finalised, we’ll be able to put the matter to bed.”
And recently they managed to make their first payout, to 67 of Harksen’s creditors.
The high-flying Harksen was declared insolvent in 1995, and was extradited to his native Germany last year after a spectacular final performance before the Desai Commission.
He had fought a nine-year battle against being sent home to face multiple charges of fraud and tax evasion. In April this year a Hamburg court sentenced him to six years and nine months in jail. He still faces fraud charges in South Africa, but it remains to be seen whether he will ever return.
Harksen told the Hamburg judge that gullible investors had placed over R400-million in his hands, and continued giving him cash even after warnings he was a crook.
”When they get greedy, it makes them blind. Greed obstructs all reason,” he said.
However a lawyer for the South African trustees estimated last year that he had stolen close to R800-million in Germany, fraudulently obtained another R50-million there, and had stolen another R100-million since his arrival in South Africa in 1993. According to Lane, the Master of the High Court in Cape Town has so far approved four liquidation and distribution accounts — sets of figures detailing particular assets and how they are to be disposed of.
With the previous three accounts, the trustees had been in the throes of very expensive litigation, and were not able to make a distribution to creditors until they had assured themselves they had enough cash to fund the lawsuits.
”Now we’ve really dealt with the main litigation, and we’ve set aside R1-million to finalise these last matters,” he said.
The total payout from the fourth account was about R3,6-million, which he said might seem like a lot until one realised that the creditors’ total claims were R2,7-billion.
”But nevertheless it’s still money,” he said. ”And it’s always a pleasure to give a return to creditors.”
Lane said the largest single creditor was a German-based investor who was claiming R758-million, a figure which included the profits promised by Harksen, who offered some investors returns of 1 300%.
The liquidation of the estate was a ”horrendously expensive” operation.
”But at the end of the day we’re at least cash-positive,” he said.
So far, it had involved some 120 High Court cases, a figure which excluded the many actions in the magistrates courts, protracted insolvency hearings, and search and sieze applications.
”This is unprecedented litigation in one insolvency case. I don’t think that record will ever be broken,” he said.
The trustees have already recovered some R36-million, some of it through the sales of luxury vehicles, watches and jewellery, and anticipate collecting another R7-million.
One of the Harksens’ luxury Constantia homes was siezed and auctioned off in 1999, and another was forcibly sold for R5-million in October last year, though in that case the bank that had granted a R7-million bond took precedence over the trustees.
In the same month the state agreed to pay the trustees R2,5-million in compensation for a quantity of Deutschmarks stolen by crooked cops from a Cape Town health club locker where the money had been stashed by Harksen’s wife Jeannette.
The policemen investigating the discovery of the cash handed in only DM1,23-million, or roughly R7-million, of the amount they found in the locker, which was also claimed by the trustees.
The Democratic Alliance has resisted all attempts by the trustees to get it to hand over DM99 000 donated to the party by a mysterious ”Hans”, which Harksen told the Desai commission was himself.
The trustees have served summons against the DA for the amount, and the matter, according to Lane, is at ”a fairly advanced stage”.
He said the rest of the oustanding cases all involved the recovery of further assets, and were against attorneys and other people who were involved in Harksen’s affairs.
Once these were finalised, the trustees would be in a position to lodge final liquidation and distribution accounts, effectively signing off on the Harksen saga.
Some of the cases were only at the summons stage, while others were waiting for a court date, which could be a matter of years. Lane said that to the best of the trustees’ knowledge, Harksen did not have any assets in Germany or elsewhere abroad.
Those he did own were attached by the German receiver of revenue when he left hurriedly for South Africa in 1993, when the authorities there began investigating his affairs. – Sapa