Mismanagement of Moti loan sinks Fish And Chips

2014-12-14 15:00

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Controversial businessman Zunaid Moti has landed smack in the middle of a decision last week to place the Old Fashioned Fish And Chips distribution centre into provisional liquidation.

The centre distributes products to Old Fashioned Fish And Chips outlets across the country. Earlier this year, Moti’s company, Waleed Investments, loaned the centre R4.3?million on tough terms. This swayed the ruling by South Gauteng High Court Judge Sharise Weiner, who has given the centre almost two months to provide reasons for the order not to be made final.

The ruling showed the centre,

run by Emilia De Sousa and her family, came apart after months of financial mismanagement and they ran the company like a personal bank account.

The family clinched the loan from Moti in May. But the mismanagement continued, according to an affidavit by a former employee at the centre’s accounts department.

She joined the centre in August and says in the three months she worked there:

.?She made payments from the centre to a separate company, Old Fashioned Fish And Chips, without any invoices or documents stating the reason for the payments;

.?She made further payments of R1?million to the parent company to pay salaries and other expenses;

.?She was ordered by Emilia De Sousa and her children Nicol and Nelson to pay amounts into the personal accounts of Nicol, Nelson and Nicolas De Sousa. Nicol De Sousa is the financial director of Traditional Brands, while Nelson De Sousa heads projects and Nicolas De Sousa is in charge of marketing;

.?She once paid R50?000 into Nicolas De Sousa’s bank account while he was in Italy;

.?She helped pay the bond of R14?000 each for Nicol De Sousa’s two houses in Ballito, KwaZulu-Natal; and

.?All cash payments from the franchisees, received daily, were kept by Emilia De Sousa and were not entered into the accounting system.

The cash payments could potentially raise eyebrows at the SA Revenue Service (Sars). Asked if this could be viewed as evidence of tax evasion, Marika Muller, a Sars spokesperson, said: “Without knowing any of the specifics, it is not possible to be certain.

“However, any individual or business receiving large sums of cash and not declaring this to Sars would need to review their business practices. They are required by law to declare all income, including cash, to Sars.”

Libertas Boerdery, a supplier of fresh potatoes, brought the application to liquidate earlier this year after Nicol De Sousa failed to pay for a series of deliveries, and after learning the centre had other creditors who had launched applications to liquidate.

The matter became urgent last month when Libertas directors learnt the centre was selling its trucks – the main assets of the business.

Nicol De Sousa admitted it had sold all of them and sold some of its “underperforming” depots in Cape Town, Durban, Port Elizabeth and Bloemfontein.

“The court has to wonder precisely what business [the centre] will conduct if it closes its depots and sells all of its trucks,” said Weiner.

“It operates business as a warehouse and distribution company. Such business will obviously not be able to be conducted by [the centre] without the warehouses and trucks.”

Moti’s loan was repayable after six months with interest of R500?000. If it was not paid by then, the company was obliged to pay him 1% of its monthly turnover for 10 years, while the money borrowed was repaid over 48 months from next year.

Nicol De Sousa told the court the centre did not repay Moti’s loan when it fell due last month.

This, and Nicol De Sousa’s inability to prove the centre was solvent, was the final nail in the coffin.

“If the debt was not paid by November 15 2014, that is six months from the day it was loaned, the [centre’s] finances will be adversely affected,” said the judge.

Old Fashioned Fish And Chips has not had a great year. It has become the target of an investigation by the National Consumer Commission after a long list of complaints by franchisees, including that Emilia De Sousa took money from prospective franchisees without opening stores for them; it has been kicked out of the Franchise Association of SA, the only recognised franchise industry body; and a former employee attracted the attention of the police’s organised crime unit.

Nicol De Sousa ignored requests for comment and Moti could not be reached for comment.

Who is Zunaid Moti?

Flamboyant property and luxury car tycoon Zunaid Abbas Moti (40) started FutureFin, a lifestyle asset financier, at a young age after watching his schoolmates at Pretoria’s St Alban’s College being dropped off in flashy vehicles.

He partnered with WesBank, FNB’s vehicle finance division, to offer finance products for luxury cars. But in 2008, the Financial Services Board declined FutureFin’s application for a licence to provide financial services.

One of the reasons was that the company had not supplied sufficient or correct information on its application forms, nor failed to meet the “fit and proper” requirements.

Since then, Moti has been in trouble with Investec, reportedly racking up debts of R1.5?billion for his property group, Abalengani. He reached a settlement with the bank to restructure the debt, but not before accusations made by the MKB Group – another property company which is also a client of Investec – that it had been driven into liquidation to protect Moti, who also owed MKB huge sums of money.

In 2010, the City of Johannesburg filed a civil suit to reclaim 33 properties it said were fraudulently transferred to Eildoug Investments. From there, they were transferred to Zamien Investments 45, a company with links to Moti.

Two years ago, he faced a charge of attempted murder after an accusation made by Brits businessman Naeem Cassim.

The case was struck off the roll.


Traditional Brands: The parent company of Old Fashioned Fish And Chips and Chingos chicken, the franchise businesses operated by the De Sousa family.

Old Fashioned Fish And Chips distribution centre: The logistics arm of Old Fashioned Fish And Chips at the centre of the court case. It distributes potatoes, frozen fish, sausages and other food items to depots around the country, which in turn distribute them to outlets.

It has now been provisionally liquidated.

Libertas Boerdery: Supplier owed R1.4?million by the distribution centre. Libertas applied to liquidate the company after it ignored two letters of demand. The centre also had other creditors that were owed about R15.5?million.

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