The fortunes of one of South Africa’s most prominent and successful liquidators, Enver Motala, have suddenly and rapidly declined, with his business ethics and behaviour called into question. Now the Supreme Court of Appeal has made it clear: his “disgraceful and dishonest” conduct means that its judges will not overturn the decision by the Master of the High Court to remove him from the panel of liquidators appointed to settle the affairs of companies in liquidation. Here is a story about his rise and fall, seen through the lens of the new court decision, from which readers may well conclude that he would be wasting his time to appeal any further.
Read the judgment on SAFLII
FOR ordinary people across Africa, shaking their heads at the scale of corruption and ethical decline on the continent, the story of South Africa’s former liquidator Enver Motala, once known as Enver Dawood, is like an old morality play, showing the struggle between good and evil and offering a moral lesson.
His meteoric rise from a relatively humble merchant background to a star liquidator, preferred in lucrative major cases – even specifically requested to handle a liquidation at one time by the South African Revenue Service and the then Minister of Justice; contacts that led to his handling more than 600 liquidations in eight years, right up to a time when, as he himself claims, he was getting R50m a year in liquidators’ fees.
Add to that his aggressive behaviour towards more junior colleagues, not to mention his well-documented arrogance towards court officials, specifically the deputy Master of the high court in North Gauteng, and you get a picture of the man.
Then it all began to unravel. Skeletons tumbled from the closet. Questions were asked. Access to all those lucrative liquidations was closed off. The media found some serious dirt. And now the Supreme Court of Appeal (SCA) has confirmed his fears, backing the Master’s decision to remove him from the panel of liquidators appointed to wind up failed companies.
The appeal court’s decision, delivered on Friday, minced no words: Motala’s behaviour was “disgraceful and dishonest”, he lied under oath and his court challenge, rather than intended to safeguard his constitutional rights as he claimed, was no more than a civil challenge to adverse administrative action that he wanted overturned “to benefit his own private pocket”. The court added that it was also appropriate to award costs against him for a number of reasons, including the “gratuitous smear attack on the Master” in Motala’s court papers, and his persisting to litigate “frivolous and vexatious” issues.
What proved his undoing? Perhaps it was his behaviour in relation to the last matter he handled as a joint liquidator, that of failed mining group Pamodzi.
There was a widespread and understandable view that the group ought not to be let go into final liquidation, but that a way should be found to save the group’s valuable mining rights and to rescue the jobs of many thousands of Pamodzi miners. That in turn led to the liquidators engaging with Aurora Empowerment Systems, a company that wanted to buy the mines and whose directors included close relatives of two former SA Presidents and the personal lawyer of one of them. The liquidators allowed Aurora to continue running the mines while it finalised an alleged deal that would provide funding for the purchase. Aurora was given this go-ahead on the understanding that the workers would continue to be paid and fed, and that mine property would be protected and maintained.
Instead, the workers starved; they were not paid, and the mines’ assets were stripped. Concerned at the reports she received, the Master asked to meet with the liquidators, but Motala proved obdurate, refusing to answer any questions even though his fellow liquidators were willing to do so.
In addition, the Master discovered that Motala had made a personal loan to Aurora, without informing her or his fellow liquidators, and that this loan was being repaid on advantageous terms, above other creditors. This, she said, meant he had a serious conflict of interests when it came to his function as a liquidator.
And then, suddenly, an even more basic question emerged: who was he? It turned out that he shared an identity number with “Enver Dawood”, a man convicted on some 90 fraud and theft charges decades ago. The appeal court commented that he lied under oath when he denied even knowing “Dawood”, or that he had any such convictions.
Motala has since put up a complex story: that he took the rap for an uncle who was about to leave the country as a political exile, and that he (Motala) had never committed these crimes. He subsequently applied for those charges to be expunged. But it was too late. He had lied to the Master, and he had not been honest in his initial declaration that he had no convictions despite knowing that any such convictions were a bar to appointment as a liquidator. All this, for a job in which the utmost integrity and honesty are a basic requirement.
Add this dishonesty to the other problems – the secret and improper loan to Aurora and his arrogance in relation to the Master’s justified questions about what Aurora was doing to the mines whose assets the liquidators were duty bound to preserve and protect - and the appeal judges concluded that his removal from the panel was entirely appropriate.
Motala has not yet commented on whether he plans what would be a last appeal, to the Constitutional Court. But given that court’s high-profile stance on integrity in public life as well as its strong decisions against corruption – all reinforced by the Chief Justice in recent speeches – and Motala would, in my view, be wasting his time to try that route.
This story appeared first in Legalbrief.