SA’s insolvency framework has turned into a killing field. In March 2023, liquidator Cloete Murray and his son were gunned down while probing missing millions at insurer Constantia.
Peter van den Steen resigned as court-appointed curator to oversee Optimum Coal Mine in December 2023 after receiving threats, warning in a court judgment that as much as R6bn may have been moved offshore from the mine over a seven-month period in 2022.
Last week, bullets found Bouwer van Niekerk, an insolvency lawyer probing NTC Global Trade Fund, in his Johannesburg office, spurring veteran business rescue specialist Kurt Knoop to resign under threat.
Violence, not a judicious process, is becoming the ultimate arbiter of financial accountability. Van Niekerk, Knoop, Murray and Van den Steen were court-appointed business rescue specialists, armed with statutory powers to follow the money. Instead, they faced threats so severe that two lie dead and others quit.
With just more than 300 licensed practitioners nationwide, targeted violence is an execution of insolvency itself. Every new threat, every assassination, shrinks the pool of professionals willing to take on complex and increasingly deadly investigations.
Business rescue is the cornerstone of economic policy, designed to preserve jobs, safeguard pensions and protect the savings of ordinary South Africans. When turnaround and solvency specialists tremble at every knock on the door that safety net unravels and investment grinds to a halt.
“We cannot and we should not remain silent on this crisis. Neither should our leaders be indecisive on the course of action we need to follow to stop this rot. Our judicial system has held firm. For how long can it withstand the combination of lawlessness and the lack of urgency from the government to reform our law enforcement agencies?” said Hendrik du Toit, CEO of Ninety One, the country’s largest asset manager with more than R3.3-trillion of clients’ assets under its custody.
— This is the latest test of our national character. We cannot tolerate contract killings as collateral damage.
“When the legal establishment is fear-struck or corrupted, the rule of law collapses. Without the rule of law, commerce as we know it cannot operate. That means capital flight, job losses and the risk of social instability.”
We couldn’t agree more. Of all its faults, from a hardly growing economy to entrenched poverty, our investment climate is fortified by stable institutions, an independent judiciary and a robust legal sector that respects the rule of law.
The Financial Sector Conduct Authority (FSCA) has been waving warning flags against NTC and its crypto sidekick, Arbitrawallet, since last year. But NTC’s director, Edwin Letopa, and Arbitrawallet’s directors, Marius Venter and Sakhile Matsimela, carried on peddling unregistered foreign currency and crypto-arbitrage “investments” with impunity.
A decade ago, Letopa flunked his fit and proper financial services provider exam, but that didn’t stop him harvesting millions of rand from the public through a web of more than 30 companies. When creditors closed in, he gamed the business rescue regime to frustrate liquidation. Stretched thin resources and legal loopholes remain open invitations for fraudsters to stonewall and shoot down inquiries. Only a R176m preservation from the National Consumer Commission, joined by the Reserve Bank, FIC and NPA, offers a glimmer of teeth.
It’s time to shield those who pull the threads on illicit empires. The FSCA, joined by the Reserve Bank, National Consumer Commission and NPA, must fast-track cross-border mutual assistance agreements and preservation orders. Parliament should toughen “fit and proper” criteria and close gaps that let quasi-regulated platforms prey on unsuspecting investors. And the Hawks must treat attacks on insolvency professionals as assaults on the rule of law itself.
This is the latest test of our national character. We cannot tolerate contract killings as collateral damage. We cannot concede the moral high ground to criminals. SA’s redemption depends as much on faster economic recovery as it does on whether we defend the people who make accountability possible. That defence cannot wait.
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