The National Director of Public Prosecution’s (NDPP) attempt to have funds frozen that were kept in bank accounts held in the names of the Ponzi scheme, Tariomix (Pty) Ltd (Tariomix), has failed at the Supreme Court of Appeal (SCA).

The NDPP made an application for condonation (late filing) and reinstatement of an appeal, against the order of the Gauteng Division of the High Court, Pretoria, which ruled that the preservation order be set aside. The ruling was made on August 22, 2022.

This week, the SCA found that the NDPP had “not established any prospects of success, let alone strong prospects of success, in the appeal that might otherwise have trumped its unsatisfactory explanation for the delay”.

The SCA ruled that the NDPP failed to file the record within the prescribed periods and the appeal consequently lapsed. As a result thereof, the curator bonis appointed paid the money over to the liquidators of Tariomix.

The funds are currently kept by the liquidators in their estate bank account and preserved for the benefit of the creditors of Tariomix - of which Louis Petrus Liebenberg and Magdelena Petronella Kleynhans (the respondents) - are directors of the bank accounts.

The NDPP sought the preservation of funds kept in certain bank accounts of the respondents on the basis that the funds “were the proceeds of unlawful activities or an instrumentality of an offence” and argued that not all investors were “innocent”.

Liebenberg and Kleynhans, through Tariomix, operated a fraudulent investment scheme relating to diamonds in which innocent members of the public were duped and incited to pay large funds to Tariomix as investors for the purchase and selling of alleged diamonds.

The court record noted: “In reality, there were never any diamonds purchased, and the funds invested by the general public were utilised by Liebenberg and Kleynhans for their own gain and to the detriment of the investors and other creditors of Tariomix.”

The liquidators claimed that they were the right people to handle the money involved in the preservation order. This would let the investors make claims against Tariomix's bankrupt estate and receive a share of the money that is legally owed to them under insolvency law.

However, the NDPP insisted that the preservation order should be put back in place until the legal process regarding the forfeiture is completed.

Last year, the conduct of the liquidators came under the spotlight with their “chilling display of legal manipulation and abuse”.

Judge Pieter Meyer said the rights of investors are protected by the Constitution under Section 25 from arbitrary deprivation.

“The NDPP argues that not all investors in the unlawful investment scheme were innocent members of the public. In support of this argument, it relies on a conclusion of fact to that effect in its founding affidavit.

“No primary facts, on which the conclusion could be founded, were, however, alleged. No particulars of the identity or identities of the particular investor or investors or the grounds on which acts of turpitude had been given,” said Judge Meyer.

Inquiries to the NDPP were not answered by deadline.

Cape Times

#asset-forfeiture

Investors' funds remain with liquidators as SCA rejects NDPP's Tariomix appeal