Members of the Umuthi Action Group are staying served with summons this 7 days for roughly R250 million in damages for what Umuthi Healthcare CEO Gert Viljoen suggests quantities to sabotage of the company’s listing on the London Stock Exchange (LSE) previous 12 months.
Head of the Umuthi Motion Team, Anthony Morris, is also required by customers of the South African Police Support (SAPS) at the Kempton Park Police Station in relation to a cost of alleged extortion.
Umuthi is the South African enterprise that was mentioned on the LSE in March final 12 months, but investing in the shares was suspended just after what the organization suggests was a procedural mistake designed by a advisor in releasing economic statements with out consent.
That suspension was lifted when the discrepancies had been dealt with, but trading was all over again suspended when a team named Umuthi Motion Team, led by Morris, lifted more fears, mostly around the assert that shares experienced been fraudulently bought prior to the listing.
In July, the LSE declared that it had discontinued the listing, without giving motives.
Viljoen suggests the negative publicity from the Umuthi Action Team contributed to the LSE’s choice.
He claims the organization has accepted the delisting, but those people dependable ought to be held to account. For this reason, the damages assert for roughly R250 million.
When some share income are claimed to be fraudulent, other buyers say they bought shares but ended up not issued share certificates.
Morris alleged that the fraud may well be as substantially as R50 million, but Viljoen states a forensic audit of the share income was carried out, showing “99% of the Umuthi Action Group did not make investments money into Umuthi or its subsidiaries”.
A lot of of these shares were gained as product sales commissions, but some of them as a consequence of fraudulent transactions conducted devoid of the know-how or authority of the enterprise.
The promises of fraudulent share product sales, nonetheless, led to the arrest of various persons, which include the company’s CEO Gert Viljoen, Tony McKeever and a person of its consultants, Connie van Nieuwkerk.
Prices were dropped towards Viljoen soon following the arrest, McKeever was introduced on bail , and Van Nieuwkerk, who was arrested in relation to a independent cost, is also currently out on bail.
Browse: Two LSE-shown Umuthi Healthcare execs arrested on fees of fraud
The difficulty appears to be that shares were becoming fraudulently sold by some brokers and consultants with out authorisation by the firm, and the proceeds of these product sales in no way arrived at Umuthi. All those shares sold by Umuthi itself ended up lawful.
It has now emerged that the police in Kempton Park issued a warrant of arrest for Morris associated to alleged extortion. The police have yet to monitor him down, and he stays at significant.
“He’s a fugitive from justice, and has been for months, and is intentionally delaying justice,” promises Viljoen.
“He should really current himself to the law enforcement so that he can solution the expenses in opposition to him and the charges to abide by for his devious actions to ruin the company’s popularity and its board as section of an elaborate strategy to claim from the listing advisor’s indemnity insurance.”
Morris denies the assert that he is a fugitive or that there was any extortion. “If the [investigating] detective needs to know the place I dwell in get to appear and arrest me, he has my range and is welcome to request,” he said via e mail in response to Moneyweb thoughts, soon right after the arrest warrant was issued in February.
He even further encouraged Moneyweb to make contact with the “provincial head of detectives” for verification.
He also claimed in a additional conversation that the investigating officer, Sergeant Mulaudzi of the Kempton Park Police Station, confirmed that the warrant was in the procedure of staying cancelled and that it would not be executed.
Last week we contacted Mulaudzi at Kempton Park Law enforcement Station. The warrant is nevertheless extremely significantly alive, we were being advised.
“Where is he? Why doesn’t he come to the station?” stated Mulaudzi.
“He is aware we are wanting for him.”
When we asked for an formal SAPS assertion on the matter, we were being referred to the investigating officer, Malaudzi.
In April, senior public prosecutor PF Erasmus also notified Morris that a warrant for his arrest has been issued.
Vassan Soobramoney of the central criminal offense intelligence device of the SAPS – who is named as an accomplice in the alleged extortion – instructed Moneyweb that there is no foundation for the charge and agrees with Morris that the warrant of arrest, evidently centered solely on the assertion of the complainant, was irregularly issued.
As to the claims that the warrant was irregularly issued, Viljoen suggests: “Soobramoney and Morris can only speculate about the contents of the law enforcement docket and really should depart the make a difference to the authorities in charge.”
On the Umuthi Motion Group social media discussion board, Morris pours scorn on the detectives, prosecutor and even customers of the group, quite a few of whom have resigned.
The demand of extortion versus Morris stems from a meeting at Emperor’s Palace On line casino in Kempton Park, east of Johannesburg, on 2 March 2020, exactly where Viljoen achieved with Morris and Soobramoney.
“I was existing at the meeting at Emperor’s Palace as aspect of an intelligence-gathering procedure,” Soobramoney told Moneyweb.
“I required to obtain out irrespective of whether Tony McKeever and Connie van Nieuwkerk were authorised to market shares in Umuthi, and Gert Viljoen educated me they were being not. Anthony Morris was there to discover out why investors he experienced released to Umuthi had not been issued share certificates. Morris experienced been promised shares for introducing some investors, and without having blinking, Viljoen reported he would honour people shares. There was totally no try to extort shares from Umuthi.”
What seems to have transpired is that Umuthi shares had been getting offered ‘off book’ and with no the consent of the corporation.
Morris says the purpose of the assembly at Emperor’s Palace was to confirm the standing of the shares issued to his cohort, and adds that no extortion took area.
Viljoen has an solely diverse recollection of that assembly: “I was current at the assembly at Emperor’s Palace, of all spots, as element of an invite from Morris who I fulfilled for the initial time to go over company options. Existing in the assembly with no prior detect Col. Soobramoney from Crime Intelligence bombarded me with queries about Connie and Tony, asking if they have been utilized by the firm, and adding that there was an open investigation into the matter at the SAPS. Morris created [it] apparent that they are intending to entail the media and that will halt the listing system of Umuthi in its entirety.
“I took this particularly seriously, especially in the presence of Soobramoney from the SAPS.”
Viljoen states he consented to this alleged extortion and, to stay clear of adverse publicity prior to the listing, issued Morris and his cohort 1.26 million free of charge shares in Umuthi.
It later transpired that there was no situation registered at the SAPS.
Soobramoney, who was associated as a guide investigator into allegations of corruption about KwaZulu-Natal businessman Thoshan Panday, claims he has been medically boarded (placed on health-related leave) thanks to a coronary heart situation.
Viljoen and McKeever say the reputational decline and damage suffered to the company was orchestrated by Morris, who amplified bogus promises of individuals committing suicide thanks to the economic loss encompassing the listing.
“Furthermore, promises that investors lost R50 million are a comprehensive fabrication. These were and are untrue claims that destroyed the listing course of action,” suggests Viljoen.
Statements of impropriety
While the Umuthi listing has been discontinued, Viljoen states the info expected by the LSE for addressing the suspension has been provided, and any questions of alleged impropriety have been set to bed just after an investigation introduced by the board and by IRS Forensic Investigations.
He states these investigations identified there was unlawful advertising of Umuthi shares, but this happened outside the house the firm and is a subject for regulation enforcement, not the enterprise.
In some situations, shares were being lawfully bought, and share certificates have been not issued due to delays brought on by Covid-related lockdowns. This has been corrected, and the share register now precisely reflects Umuthi’s share possession.
Essential piece of proof
A critical piece of proof in the declare of impropriety against Umuthi is an accounting impression drafted by Michael de Lange who was a member of the Umuthi Motion Team. The report, which was subsequently withdrawn, was compiled without the need of entry to resource documents or the accounting assumptions employed in the audit.
“Anyone is welcome to have an impression. Fortuitously listing needs are audited stories,” says Viljoen.
De Lange’s resignation letter from the Umuthi Motion Team, which was passed on to Moneyweb by a member of the team, prohibits Morris from applying any details delivered to him.
“… I do not concur nor support the media system and web-site that has been made nor the slanderous publications posted by you,” reads the letter. “I totally support the pursuit of justice but believe that this have to observe the appropriate channels … I are unable to and will not deliver you with funding to flee the place and I recommended you not to flee the country as it will make you seem even more guilty.”
Viljoen states the enterprise will not charm the discontinuation of its listing, and a selection of other opportunities for the corporation are getting explored.
But he has no intention of permitting it rest there.
Viljoen states the alleged harm caused by Morris and his group is reported to operate to about R250 million and is now the subject matter of authorized damages claims from Morris and his dwindling team.