Investors in the controversial P211 million Bluthorn Fund Managers (Pty) Ltd (BFM) scandal have rejected the recommendation of Nijel Dixon as the substantive liquidator, Sunday Standard has been informed.
The aggrieved creditors, who have been fleeced millions in what has now turned out to be a possible Ponzi scheme held a meeting with the provisional liquidator Christopher John Bray this week.
While most of the investors were not averse to the idea of Bray continuing as the substantive liquidator, Sunday Standard has learnt the provisional liquidator expressed his desire to step down, before recommending Dixon as the “only” suitable candidate for the job. “He literally wanted to impose Dixon on us,” said one of the investors.
Dixon’s controversial dealings with the Botswana government over the liquidation of BCL Mine was reportedly central to BFM investors’ reservations about engaging him as the liquidator.
At some point during his time with BCL a few years back it was revealed that the government had spent tens of millions of Pula to pay for his services as BCL liquidator. It was also brought to light at the time that the government had paid over a billion Pula for the care and maintenance of the mines over the duration of the liquidation process.
BFM creditors, Sunday Standard has learnt, were concerned about the ultimate bill of costs given Dixon’s history with the government.
It was reportedly a representative of one of the investors, BOSETU’s attorney Kabo Motswagole, who saved the day by prevailing over Bray and turning down the recommendation of Dixon as the substantive liquidator. The trade union had invested P21 million in BFM.
Not all the creditors at the meeting were eligible to vote on the matter because some of them had not yet had their claims verified.
The meeting was convened before the Master of the High Court pursuant to section 382(1) of the Companies Act. Some of the issues on the agenda included confirmation of claims, consideration of provisional liquidator’s report, remuneration of provisional liquidator, and appointment of substantive liquidator among other matters.
The majority of the creditors, Sunday Standard has learnt, were expected to write letters to express their disapproval about the manner in which the liquidation meeting was conducted. The date for a follow up meeting has yet to be announced.
The provisional liquidated has in his report painted a bleak picture in relation to what the creditors could possibly recover from the BFM liquidation. So bad is the financial situation at BFM that he said assets recovered may not even be enough to cover his own and legal fees. He stopped short of saying the company was a fraud from the onset and that the directors may never have harbored any intentions to make good on their agreements with investors.
Bray’s report says the extent of the deficit between the assets and liabilities calls for further investigations into the cause of the discrepancy.
“Until all related parties are able to payback or placed under liquidation, there is no hope for reasonable recovery by the investors,” the report says. “Based on the current figures of assets and liabilities used in this report, assuming all debtors are collected practically impossible), the dividend payable to creditors would be around 20%. However as mentioned that this appears to be a pure Ponzi scheme fraud, the likely dividend may be zero and any assets recovered may not even cover the liquidators and legal fees involved.”
The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) appointed Peter Collins as the statutory manager for BFM in 2020. The decision followed an inspection conducted at the company where many issues were raised relating to non-compliance with their license.
Some of the defrauded investors include district councils with investments ranging from P20 million to P140 million each. There were also individuals with investments between P500, 000 and P2 million each.