MBABANE The many who have read the legendary book Animal Farm will remember the phrase, “Some animals are more equal than others.”
While the Financial Services Regulatory Authority is seeking to liquidate the Status Capital Building Society, it has since been established that some prominent investors were secretly compensated for their investments.
This information is contained in court papers filed by the Financial Services Regulatory Authority at the High Court of Eswatini in its application to have the Society liquidated.
During the first curatorship, which was led by Bimal De Silva, and following the initial recovery of funds amounting to R35 million from Status Asset Management, some investors lodged claims for payment with the curator.
“Another investor instituted court proceedings where they sought an order to interdict the Status Capital from distributing the sum of E10 702 285 million, pending finalisation of an action to be instituted by the investor, Nhlangano Town Council, against the SCBS to recover investments it made to the Society. An interim order was granted ex parte and the matter is still pending before this honourable court.”
“The curator made an agreement with one of the investors, Messers SV Mdladla and Associates, where he agreed on terms of payment. In fact, the curator made some payments in terms of the agreement with the investor.”
Through the court papers, it was also stated that, in view of the above, there was a clamour among investors to be paid from the funds that were recovered.
“The issue that arises in entertaining some investors’ claims is that it results in undue preference of some investors over others. Another issue is that curatorship does not stay proceedings against the SCBS even though it is under curatorship. This results in other investors instituting claims that would give them preference and prejudice over other creditors. This is what is happening with the SCBS.”
The regulator further explained that it became apparent that curatorship was not suitable for the needs of the Society in its current state, particularly in recovering funds and distributing them fairly and equitably to investors without undue preference.
The FSRA also argued that curatorship did not provide protection from litigation and instead encouraged self-help.
“The FSRA took the decision to wind up the Society to enable recovery of the funds already recovered in an orderly winding up process.”
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