Members of the Umuthi Action Group are being served with summons this week for roughly R250 million in damages for what Umuthi Healthcare CEO Gert Viljoen says quantities to sabotage of the corporate’s listing on the London Stock Exchange (LSE) final 12 months.
Head of the Umuthi Action Group, Anthony Morris, can also be wished by members of the South African Police Service (SAPS) on the Kempton Park Police Station in relation to a cost of alleged extortion.
Umuthi is the South African firm that was listed on the LSE in March final 12 months, however buying and selling within the shares was suspended after what the corporate says was a procedural error made by a guide in releasing monetary statements with out consent.
That suspension was lifted when the discrepancies have been addressed, however buying and selling was once more suspended when a bunch known as Umuthi Action Group, led by Morris, raised additional considerations, primarily across the claim that shares had been fraudulently offered earlier than the listing.
In July, the LSE introduced that it had discontinued the listing, with out giving causes.
Viljoen says the unfavorable publicity from the Umuthi Action Group contributed to the LSE’s resolution.
He says the corporate has accepted the delisting, however these accountable have to be held to account. Hence, the damages claim for roughly R250 million.
Share transactions
While some share gross sales are claimed to be fraudulent, different patrons say they purchased shares however weren’t issued share certificates.
Morris alleged that the fraud may be as a lot as R50 million, however Viljoen says a forensic audit of the share gross sales was undertaken, exhibiting “99% of the Umuthi Action Group did not invest funds into Umuthi or its subsidiaries”.
Many of these shares have been earned as gross sales commissions, however some of them in consequence of fraudulent transactions carried out with out the data or authority of the corporate.
The claims of fraudulent share gross sales, nonetheless, led to the arrest of a number of people, together with the corporate’s CEO Gert Viljoen, Tony McKeever and one of its consultants, Connie van Nieuwkerk.
Charges have been dropped in opposition to Viljoen shortly after the arrest, McKeever was launched on bail , and Van Nieuwkerk, who was arrested in relation to a separate cost, can also be at the moment out on bail.
Read: Two LSE-listed Umuthi Healthcare execs arrested on costs of fraud
The downside seems to be that shares have been being fraudulently offered by some brokers and consultants with out authorisation by the corporate, and the proceeds of these gross sales by no means reached Umuthi. Those shares offered by Umuthi itself have been authorized.
Arrest warrant
It has now emerged that the police in Kempton Park issued a warrant of arrest for Morris associated to alleged extortion. The police have but to trace him down, and he stays at giant.
“He’s a fugitive from justice, and has been for months, and is intentionally delaying justice,” claims Viljoen.
“He should present himself to the police so that he can answer the charges against him and the charges to follow for his devious actions to destroy the company’s reputation and its board as part of an elaborate plan to claim from the listing advisor’s indemnity insurance.”
Morris denies the claim that he’s a fugitive or that there was any extortion. “If the [investigating] detective wishes to know where I live in order to come and arrest me, he has my number and is welcome to ask,” he mentioned through e-mail in response to Moneyweb questions, quickly after the arrest warrant was issued in February.
He additional suggested Moneyweb to contact the “provincial head of detectives” for verification.
He additionally claimed in an extra communication that the investigating officer, Sergeant Mulaudzi of the Kempton Park Police Station, confirmed that the warrant was within the course of of being cancelled and that it might not be executed.
Last week we contacted Mulaudzi at Kempton Park Police Station. The warrant continues to be very a lot alive, we have been advised.
“Where is he? Why doesn’t he come to the station?” mentioned Mulaudzi.
“He knows we are looking for him.”
Anthony Morris, head of the Umuthi Action Group, denies that he’s a fugitive. Image: Supplied
When we requested for an official SAPS assertion on the matter, we have been referred to the investigating officer, Mulaudzi.
In April, senior public prosecutor PF Erasmus additionally notified Morris {that a} warrant for his arrest has been issued.
Vassan Soobramoney of the central crime intelligence unit of the SAPS – who is known as as an confederate within the alleged extortion – advised Moneyweb that there is no such thing as a foundation for the cost and agrees with Morris that the warrant of arrest, apparently based mostly solely on the assertion of the complainant, was irregularly issued.
As to the claims that the warrant was irregularly issued, Viljoen says: “Soobramoney and Morris can only speculate about the contents of the police docket and should leave the matter to the authorities in charge.”
On the Umuthi Action Group social media discussion board, Morris pours scorn on the detectives, prosecutor and even members of the group, a number of of whom have resigned.
Extortion cost
The cost of extortion in opposition to Morris stems from a gathering at Emperor’s Palace Casino in Kempton Park, east of Johannesburg, on 2 March 2020, the place Viljoen met with Morris and Soobramoney.
“I was present at the meeting at Emperor’s Palace as part of an intelligence-gathering operation,” Soobramoney advised Moneyweb.
“I wanted to find out whether Tony McKeever and Connie van Nieuwkerk were authorised to sell shares in Umuthi, and Gert Viljoen informed me they were not. Anthony Morris was there to find out why investors he had introduced to Umuthi had not been issued share certificates. Morris had been promised shares for introducing some investors, and without blinking, Viljoen said he would honour those shares. There was absolutely no attempt to extort shares from Umuthi.”
What seems to have occurred is that Umuthi shares have been being offered ‘off book’ and with out the consent of the corporate.
Morris says the aim of the assembly at Emperor’s Palace was to establish the standing of the shares issued to his cohort, and provides that no extortion happened.
Viljoen has a wholly totally different recollection of that assembly: “I used to be current on the assembly at Emperor’s Palace, of all locations, as half of an invitation from Morris who I met for the primary time to debate enterprise alternatives. Present within the assembly with out prior discover Col. Soobramoney from Crime Intelligence bombarded me with queries about Connie and Tony, asking in the event that they have been employed by the corporate, and including that there was an open investigation into the matter on the SAPS. Morris made [it] clear that they’re desiring to contain the media and that may halt the listing course of of Umuthi in its entirety.
“I took this extremely seriously, particularly in the presence of Soobramoney from the SAPS.”
Viljoen says he consented to this alleged extortion and, to keep away from unfavorable publicity previous to the listing, issued Morris and his cohort 1.26 million free shares in Umuthi.
It later transpired that there was no case registered on the SAPS.
Soobramoney, who was concerned as a lead investigator into allegations of corruption round KwaZulu-Natal businessman Thoshan Panday, says he has been medically boarded (positioned on medical depart) resulting from a coronary heart situation.
Viljoen and McKeever say the reputational loss and injury suffered to the corporate was orchestrated by Morris, who amplified false claims of folks committing suicide because of the monetary loss surrounding the listing.
“Furthermore, claims that investors lost R50 million are a complete fabrication. These were and are false claims that destroyed the listing process,” says Viljoen.
Claims of impropriety
While the Umuthi listing has been discontinued, Viljoen says the data required by the LSE for addressing the suspension has been equipped, and any questions of alleged impropriety have been put to mattress after an investigation launched by the board and by IRS Forensic Investigations.
He says these investigations discovered there was illegal promoting of Umuthi shares, however this occurred exterior the corporate and is a matter for regulation enforcement, not the corporate.
In some instances, shares have been lawfully bought, and share certificates weren’t issued resulting from delays brought on by Covid-related lockdowns. This has been corrected, and the share register now precisely displays Umuthi’s share possession.
Key piece of proof
A key piece of proof within the claim of impropriety in opposition to Umuthi is an accounting opinion drafted by Michael de Lange who was a member of the Umuthi Action Group. The report, which was subsequently withdrawn, was compiled with out entry to supply paperwork or the accounting assumptions used within the audit.
“Anyone is welcome to have an opinion. Fortunately listing requirements are audited reports,” says Viljoen.
De Lange’s resignation letter from the Umuthi Action Group, which was handed on to Moneyweb by a member of the group, prohibits Morris from utilizing any data offered to him.
“… I do not agree nor support the media strategy and website that has been created nor the slanderous publications posted by you,” reads the letter. “I fully support the pursuit of justice but believe this must follow the correct channels … I cannot and will not provide you with funding to flee the country and I advised you not to flee the country as it will make you look even more guilty.”
Viljoen says the corporate is not going to enchantment the discontinuation of its listing, and a quantity of different potentialities for the corporate are being explored.
But he has no intention of letting it relaxation there.
Viljoen says the alleged injury brought on by Morris and his group is claimed to run to about R250 million and is now the topic of authorized damages claims in opposition to Morris and his dwindling group.