Wednesday, February 21, 2024

Bluthorn denies embezzling allegations

There is speculation that investors with Bluthorn Fund Managers (BFM) may lose millions in their savings but the company denies this.

The company has claimed at no stage had it failed to honour its financial obligations. 

In a note drafted by its lawyers, Gobhoza Legal Practice, Bluthorn Fund Managers denied fleecing creditors millions of Pula. 

This is despite a report filed with the High Court implicating it. Instead, the company is claiming that the Non-Banking Financial Institutions Regulatory authority (NBFIRA) is to blame for its collapse.

In a notice of its intention to appeal a judgement by the High Court in which its application of stay of liquidation was shot down, the company is pushing back against NBFIRA’s claims that it was insolvent and instead argues that the value of its investments is considerably in excess of that of funds it is alleged to have misappropriated.

“Since inception of Bluthorn Fund Managers, investments made are in excess of P772 million and those investments are over 55.8 million,” reads the note in part.

So says the company: “In fact, at the time of closure of the business by NBFIRA, if not all, of the approved creditors investment repayment had not become due and payable.”

BFM’s latest position follows Justice Itumeleng Segopolo’s judgment in which he dismissed the directors of the company’s application for stay of liquidation noting that the company failed to satisfy the requirements for the granting of a stay application.

Segopolo further found that the Directors of the company have the common law residual powers to act on behalf of the company during liquidation only if such acts concern the liquidation process. 

“Our view is that the High Court erred in so far as the requirements for stay are concerned and as such we will be approaching the Court of Appeal seeking same remedy.  We still maintain that NBFIRA had no authority to move an application for liquidation of BFM an therefore such judgment must be set aside,” BFM directors stated through their lawyers. 

The company had approached the High Court challenging NBFIRA’s powers to place it under liquidation.

The company had filed an urgent application with the High Court seeking a stay of liquidation.

The application was filed pending their appeal of an earlier High Court order granting NBFIRA leave to pursue their petition to liquidate the fund management company over the P211 million allegedly fleeced from investors.

Following an application by NBFIRA the High Court earlier this year (February, 2021) ordered that BFM be placed under liquidation. The Master of the High Court was directed, subject to the provisions of section 381, 382 and 445 of the Companies Act respectively, to appoint Chris Bray as the Provisional Liquidator and hold office until the appointment of a substantive liquidator who was to be appointed at the first meeting of the company’s creditors.

In his founding affidavit, Eune Engelbrecht (who owns the majority of shares (60%) in BFM through his company Bluthorn Holdings) had called for a stay of liquidation proceedings pending the hearing and determination of an appeal filed with the Court of Appeal on May 20, 2021.

He argued that when granting the order for liquidation in February this year the High Court failed to take into consideration that BFM is an Investment Company with Variable Capital in terms of the Collective Investment Undertakings Act.


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