At least three companies, owed millions by Arthur Kaplan and NWJ jewellers, have separately applied to the high court in Johannesburg for the liquidation of holding company Luxe Holdings, with one describing it as “hopeless at paying debts”.
A liquidation would place an independent practitioner in charge of the company. He or she would take over the reins from current directors and decide how to dispose of Luxe’s assets and divide up the proceeds among creditors.
Luxe said it would fight the liquidation cases in court.
Luxe owes the three firms, which include Richline SA, a jewellery manufacturer owned by billionaire investor Warren Buffett’s Berkshire Hathaway, at least R15m. The creditors have all detailed how repeated promises to repay the debt had come to nothing.
Directors of Aurora Empowerment Systems, a company involved in the looting and mismanagement of the Pamodzi Grootvlei gold mine between 2009 and 2011, had taken over Luxe Holdings.
Among the individuals from Aurora working for Luxe are consultants Faizel Bhana and Bashir Moosa, attorney Ahmed Amod and former Aurora directors Tony Chammas and Thulani Ngubane.
Bhana and Ngubane were found by a court in 2015 to have traded “recklessly” after taking over the Pamodzi gold mine with insufficient financial resources to run it.
Both divisions of Luxe, the jewellery chain stores Arthur Kaplan and NWJ, are already in liquidation for nonpayment of debts.
Puzzlingly, the liquidator of the two divisions, Laila Enver Motala, is said to be the daughter of the disgraced Enver Motala, who was deeply involved in the Aurora Pamodzi gold mine liquidation matter.
As the liquidator of the Pamodzi mine, Enver Motala chose the inexperienced and new Aurora firm to take over its management. Motala was subsequently struck off the liquidators’ panel after the master of the court became aware he had been convicted on 93 counts of fraud and one of theft.
Laila Motala would not be drawn on questions about working for the same individuals who were involved with her father, saying only that the current matter had “nothing to do” with her father.
NWJ director Thulani Ngubane also declined to comment on the Motala ties.
As a liquidator of NWJ and Arthur Kaplan, Motala — starting from March — had to contact all the firms owed money, send out a legal circular, set up meetings and calculate how to repay creditors. The expectation was also that she would have reached out to creditors soon after her appointment as provisional liquidator in December.
However, five creditors told Business Day that Motala had so far failed to contact them.
Werksmans lawyer Rael Gootkin, representing creditor Eldon Capital Management, said: “We have made contact [with Motala] directly and were told we would be receiving a circular, which remains outstanding.”
When questioned about a lack of communication with creditors, Motala said she could not comment as the matter was sub judice. The creditors have now approached the courts to have Luxe Holdings placed under liquidation to wrest it from its current directors.
Eldon Capital Management, which lent Luxe’s former management R2m in 2019 with the debt due to be repaid in 2021, filed papers in March to have the company liquidated.
Eldon said Luxe’s “habitual failure to honour its contractual commitments confirms the most basic facts [that] the respondent is hopeless in its efforts to make payments of its debts as and when they arise”.
Luxe owes Eldon more than R2.4m amid mounting interest.
In court papers, Eldon mentions two Italian jewellery companies who contacted it — as they were owed €63,991 (R1.2m) and €6,502 respectively by Luxe and needed guidance on the best way to be repaid.
Richline has filed liquidation papers in an effort to recoup R11m owed to it.
Unity Diamonds, which has filed a separate court application, is owed R1.6m. The diamond company’s court action comes after 25 years of doing business with Luxe.
Promises
Luxe’s suppliers have reportedly received repeated promises of payment from consultant Bhana. In court papers, Eldon Capital Management describes Bhana’s promises to suppliers as “hollow”.
When contacted by Business Day, Bhana referred questions to director Ngubane, who said that Luxe would defend all matters in court and fight the liquidation.
Ngubane said Unity had provided it with diamonds of the wrong quality, and Richline was owed money from before the time the group took over the company, while claiming Eldon had charged excessive interest on its loan.
Richline is scheduled to appear in court in early June to try to compel Luxe to file some of its outstanding legal papers so that a date can be set for the liquidation hearing.
Ngubane said that despite owing money, Luxe would not enter liquidation voluntarily. While he was found to have traded recklessly in 2015, he said he was not declared a delinquent director and therefore was legally entitled to hold a management position at Luxe.
He said he was trying to save 450 jobs at NWJ in tough economic conditions as persistent load-shedding causes the company’s stores to repeatedly close their doors.
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