ECSPONENT CASE: ECSPONENT CASE: DAVE, EDWIN CHALLENGE RULING TO REPAY E335M

MBABANE – Businessman Dave Van Niekerk and Edwin Soonius  say the default judgment, in terms of which they were ordered to pay the Ecsponent investors’ E335 240 000, is a nullity.

They have since instituted proceedings in the High Court, where they are seeking an order rescinding the default judgment that was issued in favour of the over 1 000 Ecsponent investors. A default judgment is issued when an opposing party fails to take action in a civil matter. Van Niekerk, who is a global Fintech entrepreneur, said there was no action for him and Soonius to defend. He submitted in their application that the action that resulted in the issuance of the default judgment was allegedly not validly instituted and the particulars of claim were not validly amended to seek relief against him and Soonius.

Rescinded

The businessman argued that, on this basis alone, the default judgment ought not to have been granted. He said it was a nullity and ought to be rescinded. “The second applicant (Soonius) and I were not in wilful default of defending the action. The second applicant and I have, to the knowledge of the respondents, a valid and bona fide defence to the respondents’ alleged claim against us,” submitted Van Niekerk. According to Van Niekerk, he and Soonius were cited as the fourth and fifth respondents respectively in the proceedings and no relief was sought against them. He submitted that instead, the relief, being a money judgment in the sum of E335 240 000, was allegedly sought against the first defendant – the Financial Services Regulatory Authority (FSRA).

The businessman told the court that on December 20, 2023, the respondents (ESW Investment Group (ESWIG) (Pty) Ltd, formerly Ecsponent Swaziland (Pty) Ltd, Ligagu Investment (Pty) Ltd and the investors) instituted proceedings against him and Soonius and other respondents at the time, for leave to institute proceedings by substitute service or edictal citation.

Summons

Service of the combined summons was to be effected on them by publication in local newspapers and in the Gauteng Province. Van Niekerk said the first applicant in the substituted service application is ESW Investment Group Limited and not the first plaintiff, as cited in the combined summons. He argued that one of the applicants in the substituted service application was allegedly not the same as one of the parties cited in the combined summons. According to Van Niekerk, ESWIG, in the earlier proceedings, was not granted leave to institute the action and it was not instituted.

“On this basis alone, the default judgment is a nullity, certainly at least in regard to the first respondent (ESWIG),” Van Niekerk submitted. The rescission application is opposed by the respondents – ESWIG, Ligagu Investments and the investors. Others who were ordered to pay back the money are Ecsponent Limited South Africa, GetBucks (Pty) Limited South Africa and Anthony Hay.

Obtain

The money was invested by a number of individuals and other entities in ESWIG to obtain higher returns. However, E335 240 000 of the invested E406 932 005.55 was allegedly transferred to South Africa, and the investors want their money back. The default judgment was issued by Judge Khontaphi Manzini at the Commercial Court Division of the High Court.
In this matter, ESW Investment Group (Pty) Ltd was demanding the E335 240 000 from the Financial Services Regulatory Authority (FSRA), Ecsponent Limited South Africa and GetBucks (Pty) Limited South Africa. The other defendants in the matter, which are FSRA, former FSRA CEO Sandile Dlamini and Lindiwe Vilakati, opposed the matter, hence no order against them was issued.

The default judgment came after ESWIG filed combined summons, where it was demanding a sum of E335 240 000 from FSRA, Ecsponent Limited South Africa and GetBucks (Pty) Limited South Africa, Van Niekerk, Soonius and Anthony Hay. According to the combined summons, Dlamini (Sandile) allegedly knew about measures to control ESWIG in order to ensure the fraudulent transfer of the amount of E335 240 000 to South Africa. The transfer of the investment funds, according to the combined summons, was allegedly done under the auspices of Dlamini, who was at the time the CEO of FSRA, and its officials under his control, and/or cooperated with him. The plaintiffs (ESWIG and Ligagu Investments (Pty) Ltd) informed the court that the transfer of the investment funds could, and should, have been prevented by FSRA under the auspices of Dlamini and those under his authority in exercise of their duties and responsibilities.

Fraudulent

“The sixth defendant (Dlamini), by virtue of his complicity in the fraudulent scheme, failed to comply with his duties and responsibilities in terms of Sections 4,5,6 and 8 of the FSRA Act by failing to foster through the regulation and prudential supervision the safety and soundness of the investments; the highest standards of conduct of business in relation to the investments; the fairness, efficiency and orderliness of the Eswatini non-banking sector and the protection of stakeholders,” reads part of ESWIG’s combined summons. Dlamini, according to ESWIG, allegedly failed to enforce functions that were necessary to suppress illegal, dishonourable and improper practices and financial fraud in order to prevent the transfer of the investment funds to a secure environment.

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