Court order: Brian Shivambus company escaped liquidation when he settled its debts with the VBS Mutual Bank liquidator, but he still has to pay the legal costs.
Brian Shivambu — the now infamous brother of Floyd Shivambu, the Economic Freedom Fighters’ second-in-command — was dealt another blow by the Johannesburg high court yesterday when he was ordered to pay for the legal costs of VBS Mutual Bank’s liquidators.
The costs, which are yet to be determined by the taxing master, relate to the application for the liquidation of Brian’s company Sgameka Projects, which managed to settle the more than R4-million debt at the 11th hour last month.
Had Brian not been able to settle the debts and the liquidation had been granted it could have led to further disaster for him, as the VBS liquidator Anoosh Rooplal would then have had full access to Sgameka Projects’ accounts. This could have revealed other transactions that have gone through the company.
The Mail & Guardian recently revealed that about R680 000 from Sgameka’s account paid for Floyd’s luxury Range Rover Sport’s shortfall in January last year. The car cost just over R1-million.
Through this company, Brian owed the mutual bank more than R4-million in a mortgage from 2016 and a “loan” facility in 2017.
These details were discovered after Terry Motau SC, acting on behalf of the South African Reserve Bank, uncovered the plunder of VBS monies. His investigation revealed that more than R1-billion had been looted from the bank by a range of people. Sgameka Projects was one of the beneficiaries of these gratuitous payments.
When the report was released, Brian threatened to challenge it in court. But to date he has not acted against the Reserve Bank.
Brian’s company escaped being liquidated by Rooplal last month, when he made last-minute settlement payments for the monies Sgameka owed. The company owed R1 580 154 on the mortgage and R2 785 781 on the loan facility, which Rooplal, in January, approached the courts to force Brian to pay back.
At the time, Brian was revealed as having benefited from a separate R16-million from VBS accounts through Sgameka and another company, Grand Azania.
In his plea to settle the more than R4-million debt, he then asked to pay R5 000 a month. But then Rooplal proceeded to court for a liquidation application.
This week’s high court judgment said: “The applicant [Rooplal] alleged that the respondent [Sgameka Projects] committed an act of insolvency, in making an offer to pay less than what the respondent is required to pay, in circumstances where the applicant did not accept the offer … the applicant alleged that the quantum of the offer made evidence that the respondent is struggling financially and is likely to be incurring more debts to the detriment of its creditors.”
But Sgameka argued that there was no proper case made out by Rooplal for its liquidation.
According to the court papers, on August 5 the court ruled that Brian would be personally liable for the loan debt. That is when his lawyers paid R1-million into the loan account, with R1.9-million outstanding.
By September 10, Brian had completed his payment of the R1.6-million mortgage credit. “The parties agreed that the mortgage credit agreement was no longer relevant to the liquidation,” said the court.
Brian’s lawyers argued against the winding up and said that if any order was granted, it should be a provisional one as there was a “possibility that the respondent could pay its indebtedness” and the company could be saved.
As the judge was about to deliver judgment on September 20, he was informed that a full payment of the loan had been made.
The case was then postponed to September 27, when both parties informed the court that the liquidation application was no longer necessary as the liquidator had been paid in full.
The ensuing court order said: “As regards the scale of the costs to be paid, there is no reason to deviate from the scale of costs contractually agreed as between the parties.”