STATUS CAPITAL ACCUSES MD OF OVER E500K KICKBACKS

MBABANE - Michael Mbetse, the Managing Director (MD) of Status Capital Building Society, has been accused of taking kickbacks amounting to over E500 000.

This is contained in combined summons filed at the High Court. Just last month, the High Court set aside Mbetse’s suspension and disciplinary hearing.  He had filed an urgent application to interdict his employer from conducting his disciplinary hearing, pending a declaration by the court that his suspension and disciplinary hearing were unlawful.

In the court papers that the building society has now filed, it alleged that between the period of 2020 and 2021, in the course and scope of his employment as MD, Mbetse received fraudulent kickbacks from consultants who were contracted for purposes of sourcing investors.

Allegations

The claims by the plaintiff remain allegations as they have not been proven by any court of law. A list of the kickbacks allegedly received by Mbetse is detailed in the court papers and they include monies ranging between E2 000 and E200 000 which he reportedly received from one Nomsa Shabangu after she was paid commission by the plaintiff.

In one of the claims, it is stated that there was a kickback paid on August 30, 2021, when Mbetse purportedly received payment from Shabangu in the sum of E20 000, which was allegedly paid through his daughter, Bongiwe, three days after the agent was paid commission. In another claim, it was submitted that the defendant received E72 400 from Shabangu, a day after the payment of commission by the plaintiff.

A payment of about E200 000 is alleged to have been received by the defendant on December 13, 2021, nine days after the agent was paid commission by the plaintiff. The highest amount allegedly received from Shabangu, as reflected in the court papers, is E216 000, which was received on May 23, 2022.

Occasions

There are also monies ranging between E5 000 and E10 000, which the plaintiff has alleged were received by Mbetse on different occasions from one Nombuso Simelane. It was submitted that on January 8, 2020, the defendant allegedly received payment from Simelane in the sum of E10 000 after commission was paid. Also, it was submitted that on February 10, 2020, the defendant received payment from Simelane in the sum of E5 000 after commission was paid.

It is stated that the total amount allegedly collected and or received or siphoned by Mbetse from the fraudulent kickbacks is a combined sum of E577 600. Attached to the court papers as proof are copies of the agents’ bank statements. “The conduct of the defendant in obtaining these kickbacks from the plaintiff’s agents amounts to fraud and breach of his fiduciary duty as per Clause 14 of his contract of employment, as he was not entitled to earn any commission, interest, or such additional income from any person.

Conduct

The defendant’s conduct was therefore unlawful and or fraudulent, thus liable to reimburse the plaintiff these amounts stated herein,” reads part of the court papers. The plaintiff submitted that Mbetse’s alleged actions violated his fiduciary duty as MD wherein he was expressly prohibited from receiving any personal financial gain from third parties engaged with the building society, as per Clause 14 of his employment contract.

Also, it was submitted that the defendant’s conduct was further in breach of trust, entitling the plaintiff to recover the aforementioned amounts unlawfully obtained. “The reasonable conclusion from the defendant’s conduct is that he obtained new business opportunities in the form of investments from clients and shared those with consultants who would in turn, give him kickbacks. But for his fraudulent conduct, the plaintiff would not have had to pay any commission on the transaction in questions,” it is mentioned in the court papers.

Kickbacks

It was submitted that by accepting the alleged kickbacks, the defendant was unjustly enriched at the expense of the plaintiff, much against the fiduciary duty he stood on towards the plaintiff. The plaintiff claimed that having paid commissions to its agents, it was further defrauded when they subsequently made payments to the defendant, which resulted in a diversion of funds from the plaintiff to the defendant’s personal use.

Status Capital submitted that Mbetse’s alleged conduct satisfies the elements of unjust enrichment as he was enriched in the sum of E577 600 as a result of the alleged fraudulent kickbacks received. “The plaintiff was impoverished in this regard, since the commission in question would not have been payable, had the business obtained by the defendant been presented to the plaintiff as opposed to consultants who would in turn give him kickbacks. The enrichment and impoverishment were connected, imputing liability on the defendant. The enrichment was without legal course,” it was submitted.

Policy

Another allegation made by Status Capital is that Mbetse further used the company card for his own personal gain and or entertainment, much against policy, to the loss of the company in the sum of E27 632.20.“The defendant was to use the card for strictly company business and not his own leisure or personal use. His conduct as per the petty cash reconciliation sheet demonstrates the contrary, and thus imputes liability on the defendant to reimburse these amounts as his conduct was unlawful and amounted to further unjust enrichment at the expense of the plaintiff,” it is mentioned in the court papers.

The building society informed the court that as a result of the purportedly unlawful and or fraudulent conduct of Mbetse in siphoning the kickbacks from the agents and the petty cash payments,  he is indebted to it in the combined sum of E605 232.20.

The aforementioned amount, the plaintiff submitted, is now due, owing and payable by the defendant but that despite due demand, he refuses and /or ignores and/ or avoids payment of it or part thereof. In its prayer, the plaintiff wants the court to issue an order for the payment of the sum of E605 232.20, interest thereon at the rate of nine per cent per annum, calculated from the date of issue of the summons to date of final payment, costs of suit at attorney and own client scale and further and /or alternative relief. Representing the plaintiff are lawyers from Dynatsy Inc. Attorneys, while the defendant is yet to file its responding papers.

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