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1 462 DIAMONDS AFRICA INVESTORS TO SHARE OVER E3.4M

24/03/2023 11:08:00 Kwanele Dlamini

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MBABANE – At least 1 462 Diamonds Africa (Pty) Ltd claim holders or investors will share E3 472 077.11.

The claimants will be paid 51 cents for every Lilangeni they deposited. If the claim holders or investors were to get an equal share of the E3 472 077.11 available for distribution, they would each receive E2 374.88. According to a judgment issued by Judge Mumcy Dlamini in June 11, 2013, an amount of E10 538 200 was collected from1 918 investors. Bank records, according to the judgment reflected a sum of E12 278 114.64. Thirty five investors pulled out and were refunded E172 800. Judge Dlamini noted a failure to keep financial records according to acceptable standards of accounting.

In an application filed by the liquidator, PricewaterhouseCoopers Advisory Services and the Central Bank of Eswatini on Monday, Trevor Graham Hills said the claimants were aware of how much was due to them from the funds available. Hills is the Director Forensic Services of PricewaterhouseCoopers Advisory Services (Pty) Ltd. In the application, the liquidator and Central Bank of Eswatini wanted the High Court to order that the schedule of steps to be taken by PricewaterhouseCoopers Advisory Services, inspected by claim holders at Mountain View International Hotel from January 30, 2023 to February 17, 2023, filed with the court.

They also applied that any depositor, investor or claim holder, other creditor or shareholder, and any interested party, may within 21 days after filing of the schedule with the court, file an objection to any step proposed to be taken by the liquidator after serving the notice of objection to the liquidator and Central Bank of Eswatini. Judge Zonke Magagula granted the orders yesterday. The court also ordered PricewaterhouseCoopers Advisory Services to publish the order of the court in a newspaper once a week, for two consecutive weeks. Hills also informed the court that there were 672 new claim holders/investors who had not registered and whose claims had not been admitted. The liquidator, according to Hills, would pay these claims from a reserve fund established by the Central Bank of Eswatini, once the claims were proven. The lodgement of the steps proposed to be taken by the liquidator, according to Hills, was part of the process to wind up of the scheme.

“The schedule of steps proposed to be taken are the steps the liquidator proposes to take to liquidate the scheme and distribute the funds available for distribution to holders of claims against the funds. The funds were seized by the second applicant (Central Bank of Eswatini) on the grounds that the scheme was illegal by taking deposits from the public without being authorised by the Central Bank of Eswatini as required in terms of the Financial Institutions Act (FIA) 6/2005,” said Hills.

Illegal

He also told the court that Diamonds Africa operated an illegal collective investment scheme or pyramid scheme in violation of the FIA. The scheme operated by Diamonds Africa, submitted Hills, contravened exchange control regulations and Section 72 of the Mining Act No. 5 of 1958. The Central Bank of Eswatini seized Diamonds Africa’s bank account in terms of the powers conferred on it by Section 8 read with Section 9 of the FIA. The amount seized was the money deposited by the investors of the scheme. “These are the only known holders of claims against the fund. It is the funds that were seized by the second applicant that will be distributed by the liquidator to investors of the scheme who had filed and proven claims against the funds,” said Hills.

PricewaterhouseCoopers Advisory Services and the Central Bank of Eswatini instituted proceedings for the compulsory winding up of the Diamonds Africa Scheme and the court granted the winding up order. In winding up of the scheme, PricewaterhouseCoopers Advisory Services is required to lodge with the High Court in terms of Section 33 (d) of the schedule to the FIA, the schedule of steps the liquidator proposes to take. Hills said the liquidator and Central Bank of Eswatini issued a notice in terms of Section 33 (d) of the schedule. In terms of the notice, he said the schedule was available for inspection at Mountain View International Hotel during the period January 30, 2023 to February 17, 2023.

Claim holders/investors inspected the schedule of steps and Hills informed the court that they were aware of how much was due to them from the funds available for distribution. To protect private information, according to Hills, the liquidator would not disclose publicly the amount to be received by each person. Hills said this information was available on request with the liquidator. “All together there were 1 462 claim holders/ investors whose claims had been admitted, who inspected the schedule of steps proposed to be taken by the liquidator. The claim holders are of aware how much is due to them from the funds available.

“The funds available for distribution to depositors is the sum of E3 472 077.11 and each claim holder/investor will be paid 0.5133c (51 cents) for every Lilangeni deposited. Every claim holder/investor is now placed in a position, whereby, he knows how the funds will be distributed and what steps the liquidator proposes to take in winding up the scheme,” added Hills.

The purpose of lodging the schedule with the court, said Hills, was to enable depositors or other claim holders to file objections to any step proposed. This will create a mechanism whereby claim holders can object to any proposed step and any such objection is adjudicated upon by the High Court. It also provides for adjudication of objections by the court following notice to the liquidator and any interested parties. Head of Legal and Board Secretary Refiloe Mamogobo filed a confirmatory affidavit. She said she associated the contents of the founding affidavit as well as the conclusion of law made therein. The application was heard ex parte.