Professional Update
A
monthly newsletter for KZN Attorneys from the Kwazulu-Natal Law Society

12 June 2009

This professional service draws attention to current and important items of news
 and members are directed to the hosts' websites

InfoUpdate 12 of 2009
Recent Judgments

Electronic copies of this information may be obtained from our librarians at help@lawlibrary.co.za or click on the underlined hyperlink where relevant

South Gauteng High Court (previously Witwatersrand Local Division) - http://www.saflii.org.za/za/cases/ZAGPJHC/  ; Court rolls at http://www.saflii.org/blog/?page_id=173

12 June 2009
A5001/2009 [2009] ZAGPJHC 26
Santino Publishers CC v Waylite Marketing CC

11 June 2009
A5021/08 [2009] ZAGPJHC 25
South African Broadcasting Corporation Ltd and Another v Mpofu

8 June 2009
08/14641 [2009] ZAGPJHC 24
Tusevele v Van Der Merwe

Running out of options - 3 June
If we didn't know better, we'd have to conclude that some in the South African judiciary are hellbent on undermining the credibility of their own institution. The South Gauteng High Court's ruling that the Judicial Service Commission's (JSC's) refusal to postpone its hearing into the Constitutional Court judges' complaints against Western Cape Judge President John Hlophe violated his right to a fair hearing was disturbing not only because the bench was split - yet again - along racial lines, but also because Hlophe's case was so obviously paper thin. - allAfrica website

See also :

1 June 2009
19006/09 [2009] ZAGPJHC 19
Hlophe v Judicial Service Commission and Others

South Africa. Judicial Service Commission, and, Judiciary

Emfuleni interdicted from polluting Vaal - 2 June
The Emfuleni municipality has been interdicted from spilling raw sewage into the Vaal River by the high court in Johannesburg today. The ruling came after SAVE, a non-governmental organisation aimed at protecting the Vaal River and its environs, took the municipality to court to stop it polluting the river, said SAVE chairman Lotter Wepener in a statement. "During the past few weeks, it came to SAVE's attention that the Emfuleni municipality was, once gain, pumping raw sewage into the Vaal River Barrage Reservoir. This was being done despite four previous court orders prohibiting Emfuleni from continuing with its criminal conduct by unlawfully polluting the Vaal River". According to SAVE, Judge John Horn ordered the municipality to stop deliberately dumping sewage into the Vaal River. - The Times website

White squatters triumph - 3 June
The people of a squatter camp for whites in Krugersdorp have given the Mogale municipality a bloody nose in court by successfully opposing an eviction order. The 225 mainly Afrikaner residents of Coronation Caravan Park, near Krugersdorp Dam, on the West Rand, were taken to court by the municipality. It wants to evict them to make way for a park for the influx of soccer fans expected for this month's Fifa Confederations Cup. Mogale municipality's urgent application for an eviction order was dismissed by the South Gauteng High Court in Johannesburg because the council had not followed the correct procedures in its efforts to evict the residents. The residents' lawyer, Naude de Klerk, told The Times that their victory meant that the right to housing had triumphed over "putting a television up for people to watch soccer". - The Times website

Warders helped Mathe escape, judge rules - 4 June
Annanias Mathe, dubbed the Houdini of C-Max, was assisted by prison warders in his initial attempt to escape from one of South Africa's maximum security prisons. This was Judge Geraldine Borchers's finding when she convicted Mathe for attempting to escape from his cell at C-Max Prison on April 30, 2006. Mathe did not deny that he wanted to escape from C-Max, but wanted the court to believe that he did not plan to escape on the day he was caught. On Wednesday, he was found guilty on eight other counts - two of rape, and other charges of housebreaking and theft, and killing five dogs. The case was postponed until Wednesday. - IOL website

Call to scrap 'greed fines' - 9 June
A lobby group known as Justice Project South Africa is protesting against speeding fines issued by the Johannesburg metro police. Yesterday, the group delivered a letter to the director of public prosecutions at the South Gauteng High Court, Johannesburg, calling for the withdrawal of all mobile-camera speeding fines, which the group describes as "greed fines". The founder of the organisation, Howard Dembovsky, claims to have "caught the metro police with irrefutable evidence of committing fraud". - The Times website

Victory for gang-rape survivor - 10 June
Shouts of joy rang out in the South Gauteng High Court, Johannesburg, yesterday when seven men who gang-raped a woman four years ago were convicted of the crime. Their 28-year-old victim, known as Buyisiwe, had almost given up on justice after her case was struck from the court roll, withdrawn and postponed more than 20 times. The rapists - Thabiso Thikwane, 20 ; Sello Mohlala, 20 ; Oupa Mohlala, 19 ; Bongani Nhlapo, 18 ; Moeketsi Mputi, 19 and Kabelo Mwale, 21 - spent their first night in jail when their bail was revoked following their conviction. - The Times website

School sword-killing case postponed - 15 June
The sentencing of Krugersdorp schoolboy Morne Harmse for killing a fellow pupil with a sword was postponed on Monday to August. The High Court in Johannesburg postponed the case to August 31 after the submission of a pre-sentencing report from social workers was delayed. Harmse killed 16-year-old Jacques Pretorius with an ornamental Samurai sword at the Nic Diederichs Technical High School on the West Rand last August. - Mail & Guardian website

Czech lawyer probably returns to Prague from South Africa - 20 June
Public Czech Television (CT) reported earlier today that Czech lawyer Julius Kramaric has allegedly been released from prison on the basis of a South African court decision and that he is on his way back to the Czech Republic. Kramaric will, however, have to return to South Africa in November when the court will start to deal with evidence in his case. Kramaric and his colleague went to South Africa to attend  businessman Radovan Krejci's court hearing over the kidnapping and death of a Czech businessman. - Ceske Noviny website

Agliotti faces R29m lawsuit: report - 26 June
Brett Kebble murder accused Glen Agliotti is being sued for R29 million by the slain mining magnate's former companies, The Star reports. But Agliotti, who is the Scorpions' main witness against National Police Commissioner Jackie Selebi, has hit back at the mining companies' damages claims against him with accusations that they knowingly gave him the money to conduct numerous illegal activities. In papers before the Johannesburg High Court, Agliotti has vehemently denied claims from the mining company JCI Limited and its controversial subsidiary, Consolidated Mining Management Services Limited, that he unlawfully misappropriated money from them, the newspaper said. He instead argues that agreements were concluded between himself, as a representative of the Springs Lights 6 (Pty) Ltd and Misty Mountains Trading Pty (Ltd) companies, and the JCI and the CCM, to "facilitate payments of funds to be utilised for illegal purposes". - The Times website

Tannenbaum Case (Ponzi Scheme)

The R10bn betrayal - 11 June
A massive international investment fraud, which has targeted some of South Africa's wealthiest families, is fast unravelling with estimates that up to R10-billion could be at stake. Also targeted have been vulnerable elderly people who now face destitution. The fraud is a Ponzi scheme similar to that structured by jailed New York fraudster Bernie Madoff with the money of new investors used to pay off initial investors. . . All three are living in luxury : Tannenbaum in an upmarket suburb in Sydney, Rees in Switzerland and Leigh in South Africa. All are understood to have multiple homes. - IOL website
Keyphrases :
Barry Tannenbaum
Darryl Leigh
Dean Rees
Eurochemicals (Pty) Ltd
Frankel Chemicals

Billions lost in SA's largest 'Ponzi' scheme? - 10 June
Many South African and overseas investors will soon be realising what many of them have probably been dreading for a while now, namely that the Frankel Investment Scheme, into which billions were poured, is nothing more or less than a vehicle designed to defraud them. Whether this turns out to be a classic "Ponzi", along the lines used by US fraudster and financier Bernard Madoff or is more of a multilevel pyramid scheme, only time will tell. - Article by Michael Trapido on the Thought Leader blog

S Africa fraud worth up to $1.2 billion uncovered - 11 June
Hundreds of investors have been fleeced of up to 10 billion rand ($1.2 billion) in what could be South Africa's biggest corporate fraud, a private investigator and lawyer said on Thursday. Barry Tannenbaum, a South African businessman living in Australia, lured investors with the promise of 200 percent annual returns linked to pharmaceutical imports, and forged AIDS drug orders to reassure funders when money started to dry up. The scheme is still unravelling but lawyers and investigators believe hundreds of investors including top businessmen from South Africa, the United States, Germany and Australia, were involved, losing up to 10 billion rand. - Reuters website

Home-grown Ponzi scheme bleeds the rich - 11 June
News has emerged of a homegrown Ponzi scheme that has taken several high-net worth individuals for a ride. The scheme is alleged to be run by Barry Tannenbaum, grandson of one of Adcock Ingram's four founders, Hymie Tannenbaum. The scale of losses is not yet clear, reports Financial Mail, but the debtors' book officially stood at R1.76bn last Friday. - Moneyweb website

Investment scam - 12 June
With nearly R2bn missing and more losses to surface, SA-born Barry Tannenbaum may have created the country's largest Ponzi scheme. An FM investigation has uncovered a trail of deceit that looks set to eclipse Masterbond and Fidentia as SA's biggest investment disaster. Rob Rose tracks how SA businessmen and investors got caught in a trap. - Financial Mail website

SA Ponzi scheme uncovered : up to R215bn involved - 11 June
Interview with Warren Goldblatt : head, Specialised Services Group, Felicity Duncan and David Shapiro on the Moneyweb website

Ponzi scheme update - 12 June
" . . . what do the investors hope to gain from the sequestration of Tannenbaum's estate? . . ."
Interview with Andre Prakke (AE Prakke & Co), Paul Winer (Werksmans Attorneys), Felicity Duncan, Julius Cobbett and Wayne McCurrie on the Moneyweb website

Swindle suspect's SA estate is seized - 12 June
The personal estate in South Africa of Barry Tannenbaum, the alleged mastermind of a massive international fraudulent investment scheme that appears to have fleeced billions of rands from about 400 investors, has been placed in provisional sequestration. Criminal charges have been laid against Tannenbaum. A provisional sequestration order for Tannenbaum's estate was granted by Judge Makhanya in the South Gauteng High Court last Friday. The application was brought by Christopher Leppan. Some investors, who believe they got their money out of the scheme in the nick of time, may be in for an unpleasant surprise. In terms of the Insolvency Act, investors who were paid out might be required to repay any investment returns - and possibly even their initial investments - to the trustee of Tannenbaum's sequestrated estate. - Business Report website
Keyphrases :
Financial Intelligence Centre
RMB Private Bank
SAPS. Organised Crime Unit
South African Reserve Bank

Tannenbaum on a tightrope - 12 June
A trustee for the South African estate of Barry Tannenbaum, who allegedly operated a Ponzi scheme that cost investors billions, will be appointed next week, Johannesburg attorney Ian Levitt said on Friday. - IOL website

S Africa businessman Tannenbaum denies $1.2bln fraud - 12 June
South African businessman Barry Tannenbaum, accused of defrauding hundreds of investors in what may be the country's biggest corporate fraud, denied any wrongdoing and blamed his company's woes on the economic crisis. "As has happened with other companies that have from time to time found themselves in a financial predicament, particularly in the present climate, I have found myself in such a situation," he said in an e-mailed statement on Friday. - Reuters website

Aspen says we did no wrong - 12 June
Pharmaceutical company Aspen has rejected any illegal involvement with the alleged Ponzi scheme, Frankel Chemicals. It is alleged that Frankel misled investors about the nature of its business with Aspen. One of the alleged claims was that it had been awarded a contract to supply Aspen with antiretroviral ingredients, and that Aspen owed it R700m. Aspen says "The alleged purchases and related amounts owing are invalid and have arisen as a result of the falsification of documents". - Moneyweb website

Agencies join forces for Ponzi prob - 13 June
In an unprecedented move, South Africa's top financial and law enforcement agencies will jointly tackle the estimated R10-billion pyramid scheme that has left hundreds of wealthy South Africans out of pocket. A team from the SA Reserve Bank, the South African Revenue Service, the Asset Forfeiture Unit, the Financial Intelligence Centre and the police's Serious Economic Affairs Unit is to attempt to untangle the complex web of transactions and suspected fraud in what has been billed as South Africa's biggest Ponzi scheme to date. - The Times website

Charming pair fooled friends and family - 13 June
Barry Tannenbaum has been likened to jailed US businessman Bernard Madoff, who swindled a reported 65-billion from thousands of investors in his elaborate Ponzi scheme. But what are the similarities between Tannenbaum - who might be the mastermind of South Africa's largest Ponzi scheme - and the disgraced former Nasdaq chairman? - The Times website

14 June 2009
Joint investigation into allegations of fraud and impropriety in investment structure
SA Government Information website

Ponzi victims : should we feel sorry? - 12 June
Moneyweb website

How to unravel a Ponzi scheme : follow the money - 13 June
There seems to be a deliberate pattern emerging in the approach being taken by the Frankel Investment Scheme suspects to the unfolding story of what appears to be South Africa's largest Ponzi scheme. It appears to be to a deny everything strategy that puts the onus on investors (or victims) to prove their claims and attributes the meltdown to the global financial crisis. - Article by Michael Trapido on the Thought Leader blog

Ponzi-type scheme contract bound investors to undertaking of privacy and confidentiality  - 14 June
It also made provision for hefty penalties for breaches of this clause by investors. A copy of a contract in Business Report's possession, on a letterhead of law firm of Dean Rees, an agent for Tannenbaum's scheme, specifically states "the details of the third party/ies are held confidential by this firm and yourself and will not be disclosed to any other third party". Investors were required to irrevocably undertake not to disclose their participation, any documentation in their possession or any details about the financed party/ies to third parties without the prior written consent of the financed party, who in their sole and absolute discretion may withhold consent. - Business Report website

Ponzi update : task team appointed, extradition treaty - 15 June
Interview with Willie Hofmeyr : head, Asset Forfeiture Unit, NPA and Alec Hogg on the Moneyweb website

Ponzi update : the herd mentality - 17 June
Interview with Magnus Heystek : Brenthurst Wealth and Alec Hogg on the Moneyweb website

UK businessmen caught in SA Ponzi scheme - 17 June
United Kingdom-based businessmen are among the victims of South Africa's largest Ponzi scheme, allegedly operated by Barry Tannenbaum, the Telegraph reported on Wednesday. - Mail & Guardian website

Court names trustees for Tannenbaum estate - 18 June
Trustees have been appointed for the South African assets seized from alleged Ponzi scheme fraudster Barry Tannenbaum. Johannesburg attorney Ian Levitt said one of the trustees that he had put forward - Johannesburg-based Shirish Kalian Attorneys - had been appointed. The other trustee was KPMG International's Gavin Gainsford. - IOL website

Pockets of the ponzi victims to be hit again - 18 June
Some of South Africa's wealthiest - duped into investing in the country's biggest-ever ponzi scheme - will have to fork out even more money. On Wednesday, the Master of the Johannesburg High Court appointed three trustees for assets seized from Tannenbaum's estate in South Africa. Trustees will now go about compiling a list of Tannenbaum's assets, with those who benefited from the ponzi scheme in any way expected to pay back their ill-gotten gains. - IOL website

Tax shock may await Tannenbaum's investors  - 18 June
Investors in the Ponzi-type investment scheme operated by Barry Tannenbaum, which allegedly fleeced billions of rands from about 400 people, could be in for a painful tax surprise even if they rolled over their investments and lost both their capital and profits. Provided it was not an illicit scheme, the SA Revenue Service (Sars) would regard any profit from the investment as a dividend and therefore taxable, Sars spokesman Adrian Lackay said yesterday. - Business Report website

Tannenbaum's FNB account frozen in probe of $1.8 billion fraud - 18 June
First National Bank froze the bank accounts of Barry Tannenbaum to comply with a court order in the probe of what may be South Africa's biggest ever fraud, a bank spokeswoman said. The Johannesburg-based bank, known as FNB, is working with the South African task team set up on June 14 to investigate Tannenbaum, who is accused of running a Ponzi scheme worth as much as 15 billion rand. - Bloomberg website

More Ponzi scheme fraud uncovered - 18 June
Another forged document has been discovered in the Ponzi scheme allegedly headed by Barry Tannenbaum, the Financial Mail reports. The publication said it had obtained a letter that was purportedly sent from the SA Reserve Bank (SARB) to First National Bank on May 15, 2009. According to the Financial Mail, this letter was shown to Qatar-based real estate group Barwa and was meant to confirm a payment from drug manufacturer Aspen. - Mail & Guardian website

Charge of fraud laid against Ponzi agent - 19 June
Criminal charges were laid yesterday against Dean Rees, an agent for the Ponzi-type investment scheme allegedly headed by Barry Tannenbaum, which has fleeced billions of rands from about 400 investors. - Business Report website

Investor files criminal complaint against Tannenbaum - 21 June
Kobus Beukes, a private investigator, said he asked Johannesburg police on Thursday to investigate a complaint of fraud against Barry Tannenbaum, who is alleged to have run the country's biggest Ponzi scheme. Inspector Mike Masemola, a policeman at the Linden Police station in northern Johannesburg, confirmed that the complaint had been made and said it had been handed over to the Johannesburg Commercial Crimes Unit. - Moneyweb website

Freezing of Ponzi accounts on cards - 22 June
The special government agency task team established to co-ordinate action against alleged Ponzi-type scheme head Barry Tannenbaum and entities associated to him is considering legal steps to freeze the bank accounts linked to the scheme. The scheme is believed to have fleeced billions of rands from about 400 investors. - Business Report website

Suscito liquidation application settled : report - 24 June
Suscito Investments was responsible for the admin of investments in a Pozni scheme allegedly headed by Barry Tannenbaum. - Moneyweb website

Ponzi recruiter's assets frozen : report - 25 June
The assets of lawyer Dean Rees - an alleged recruiter for a Ponzi scheme allegedly headed by Barry Tannenbaum - have been frozen, according to the Financial Mail. According to a recent investigation, Rees sought investors for Tannenbaum’s scheme that supposedly imported pharmaceutical drugs into SA and then sold them on to generic drug manufacturers. Although Rees said he was an unwitting pawn of Tannenbaum, his assets were frozen this week by the Queen's Bench division of the UK High court in London, the FM added. The applicant in the matter was Qatar-based real estate company Barwa. - The Times website

Law society enters Ponzi scheme fray - 26 June
The Law Society of the Northern Provinces has launched an investigation to determine the extent of involvement by its attorney members in the Ponzi-type investment scheme operated by Barry Tannenbaum. Thinus Grobler, the director of the society, said yesterday that the society had launched this investigation of its own accord after noting media reports on the matter. "As far as I am aware, no formal complaint has yet been received (from the public) by the law society," said Grobler. There had been unconfirmed reports that some attorneys had invested funds from their firms' trust accounts in Tannenbaum's scheme. - Business Report website

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