Shady Shefer

To describe Niko Shefer as a shady businessperson is arguably an insult to trees everywhere, but the convicted fraudster has always had a reputation for chutzpah.

This, after all, was the man who reportedly boasted, in a 1999 interview about his innovative methods when conducting business in Africa: “I move with cash. I can buy the president a Mercedes 600.
How can a normal company justify that? How do they explain that to the shareholders? I do not need board meetings. I am the board.”

Since being released from prison in the early 1990s, after serving time for bank fraud, Shefer has led a charmed life on the edge of financial scandal, trading on his claimed closeness to the high and mighty and amassing a personal fortune in the process.

Through his contacts with the regimes of former Liberian president Charles Taylor and late president Laurent Kabila of the Democratic Republic of Congo, Shefer became associated with a number of questionable schemes to exploit the mineral wealth of both countries. He earned himself a mention in the scathing 2002 United Nations report on individuals and companies profiteering from resource exploitation in the war-ravaged Great Lakes region.

But, each time Shefer has emerged unscathed, shifting himself to the innocent margins of the financial upheaval and legal inquiries that appear to have dogged much of his business life.

Now, it appears he may be facing his biggest challenge. Shefer is facing a string of charges in the Pretoria High Court, including theft, corruption and contraventions of the Companies Act.

According to Shefer’s lawyer, Mark Efstratiou, his client denies any wrongdoing and is conducting confidential negotiations with the prosecuting authorities. The case has been postponed indefinitely pending the outcome of these discussions.

Noting that Shefer had not pleaded yet, he said a number of technical applications had been launched challenging aspects of the state’s case, including issues related to the arrest warrant, a search-and-seizure operation carried out at Shefer’s house in 2003, and what Efstratiou described as problems regarding “the availability of the docket”.

Shefer has also drafted in top Johannesburg advocate Gilbert Marcus to defend him.

The circumstances of the case, according to an indictment filed with the court in December last year, go back to 1997, when Shefer purported to act as the consul general of Liberia in South Africa.

According to the charge sheet, he used this guise to induce the South African Police Service (SAPS) to donate uniforms to the cash-strapped Liberian government.

According to the summary of the state’s case, the uniforms became redundant following the amalgamation of various Bantustan police forces into the SAPS after 1994. Two donations, uniforms and material worth R33million, were approved, but Shefer allegedly sold the donated goods or kept them for sale.

The state claims that, during October 2002, the police confiscated large quantities of uniforms and police textiles in Johannesburg that dated from the earlier donation.

The charge sheet also alleges that Shefer had the help of a senior police officer, Captain Johannes Stephanus Louw, whom he allegedly bribed to continue to facilitate the donation, despite Louw allegedly knowing that Shefer would sell the donated goods.

According to the state, the SA Liberia Trade and Investment Corporation—which formed part of a group of companies allegedly controlled by Shefer—in November 1997 paid R25 000 into the account of PQR Consultants, a company of which Louw’s wife was a director.

Up until December 2000, Shefer paid a total of R367 000 into the PQR account, as well as into the accounts of both Louw and his wife, allegedly in order to reward Louw for facilitating the donation of material to Liberia.

Louw is now a state witness.

Another theft charge relates to the discovery—during the search of Shefer’s home—of a statement made to police regarding a fraud complaint laid against Shefer in 2001.

The charges, relating to the Companies Act, flow from allegations that Shefer continued to act as a director of various companies, despite having been convicted and imprisoned for fraud, rendering him ineligible to serve on a company board.