MBABANE – The intervening parties answering affidavit opposing the liquidation of the Status Capital Building Society has opened a can of worms.
Initially, the High Court of Eswatini placed Status Capital Building Society (SCBS) under provisional liquidation, effective December 24, 2025, following an application by the Financial Services Regulatory Authority (FSRA).
The intervening parties include the Investors and Shareholders who are represented by Banele Ngcamphalala of Mntjali Ngcamphalala attorneys.
The applicant in this matter is the FSRA while Mbongiseni Nkambule, the Status Capital Building Society, Nhlangano Town Board, and the Investors and Shareholders are all respondents.
In one of the submissions in the affidavit, the SCBS accuses the Financial Services Regulatory Authority of taking an ‘executive decision’ to liquidate the building society rather than engaging all its stakeholders.
The FSRA in its court submissions alleges that it discovered in 2020 that there “was non compliance in certain regulatory requirements by the SCBS. However, and interestingly, the applicant did not give a notice to the general public and or other relevant stakeholders. Instead it renewed the SCBS license.”
Furthermore, it has been submitted that the FSRA Chief Executive Officer, Ncamiso Ntshalintshali, alleged that there were inspections in 2021 and the FSRA discovered that there were no measures taken by the latter to rectify the non-compliance.
“Again, it failed to notify the general public and stakeholders but went on to renew another license.”
“If the FSRA noted that stakeholder funds were being unlawfully siphoned out of the country from the Status Capital Building Society for the purposes of benefiting certain individuals, then these individuals would have been fined, removed as directors, a license to the SCBS suspended, a notice to the stakeholder and other administrative fines imposed.”
“The renewal of the license was an indicator to the public that the Status Capital Building Society was conducting business in accordance to the law. It was an affirmation by the regulator that the SCBS had adequate internal controls and it complied with the best practice in corporate governance. It was also a confirmation by the FSRA that the SCBS had made adequate arrangements for the safe custody of customer assets through appropriate segregation.”
The SCBS Investors and shareholders have also submitted that they were not aware of how much they have in society’s account yet they were owners of the society as well.
While the former curator Bimal Da Silva, according to the FSRA, was given full control to operate all the SCBS’s bank accounts, included but not limited to the authority to initiate and approve transactions, monitoring and managing the balance of the accounts and transferring funds for all the society’s accounts to safeguard its (SCBS) financial health.
“Da Silva effectively assumed the powers of a board of directors and executive. He was literally responsible for everything pertaining the Status Capital. However, there has been no report or otherwise, setting out what was discovered. The shareholders are not aware of how much was received from its debtors, how much was paid to creditors, how much was at least left at the end of the curatorship.”
“This honourable court is made to rely on averments made by Mr N. Ntshalintshali without confirmatory affidavits to suggest that he was one of the inspectors and as such the allegations are of the best of his knowledge and true.”
The respondents in the matter therefore argue that the allegations in the founding affidavit are in direct contrast with what the Act dictates.
“The fact that the applicant has failed to provide reports clearly suggest that there are anomalies.”
Does FSRA CEO doubles as an investigator?
The Investors and shareholders argue that the FSRA Chief Executive Officer misrepresents himself as an investigator or curator when he’s not.
“All the averments made appear to be information from the FSRA CEO who was neither an inspector nor investigator. Mr Ntshalintshali has not suggested that he also performed duties of a curator.”
On the flipside and according to court papers, the appointment of a second curator rendered the liquidation application deficient.
“What further compounds the situation, was that the FSRA, upon the expiry of Mr Bimal curatorship, appointed Mr Nkambule as the second curator.”
Nkambule is employed by the FSRA as a General Manager. His duties included the delivery of a comprehensive report by December 15, 2025 to his employers. The report ought to have findings and recommendations.
It is alleged that the anticipated and said report had not been submitted to the honourable court for the purposes of supporting the liquidation application and it had not been presented to the owners which happens to be the shareholders.
“The said shareholders have not been updated about their own company. Furthermore, it becomes odd that having resolved to wind up the society, the FSRA decides to appoint one of its senior managers who also acts as a Chief Executive Officer in the absence of Mr Ntshalintshali to perform the duties of a curator. It appears that the FSRA took the operations of the SCBS and made provisions to make reports for its own consideration. It is therefore not surprising that there are no reports pertaining to the operations of the SCBS where the recommendation to for the liquidation was made.”
All investments repaid
All monies that were invested in the various allegedly related entities have been repaid.
The investors and shareholders legal team refuted the claims made by the FSRA that the revenue invested was still owed.
“Only one investment remains unpaid and I have been advised that the reason for its delay is the fact that it is long term. This is the investment made through the Swaziland Debt Factoring Firm (SDFF). However, worth mentioning is that same is being settled after it, SDFF made the necessary settlements with the curators.”
Moreover, the team argued that the SCBS could not meet its obligations because it has been denied the opportunity to do business.
“There is no sufficient reason at this point in time to liquidate the SCBS. Furthermore, there will be no equitable distribution of funds at this stage as the other investors have been paid as preferred creditors.”
“The allegation that money was siphoned out of the country cannot be sustained. The Status Capital Building Society appointed a Compliance Officer who was responsible for preparing the debenture agreements and related documentation.”
The intention was to execute compliant debenture agreements to ensure that the capital was always adequate as per the requirement of the FSRA.
“The reason the SCBS believed that everything was in order was because the Building Society Act authorized the Society to invest in debentures.”
Debentures a compliance issue
The court has been challenged to appreciate that the debentures were just a compliance issue rather than unlawful practice.
A debenture is a long term debt instrument issued by corporations or governments to raise capital, typically unsecured by specific collateral and backed by the issuer’s creditworthiness. Holders receive regular interest payments, often at a fixed rate and the principal is paid upon maturity.
The submission noted from the intervening parties answering affidavit explains that the disbursements were in accordance with the debenture agreements concluded after the Board of Directors resolution in July 2020.
“The debentures have not been considered as unlawful per se; the unlawfulness or non-compliance emanates from the fact that the SCBS neglected to seek approval from the regulator.”
“There was an extensive discussion between the FSRA and the SCBS regarding the approval of the debenture agreements. The matter was settled upon seeking an independent legal opinion from counsel on the issue. Immediately upon receiving the said opinion on the subject, the SCBS began the exercise of dis-investing and to date only the long term investment with the SDFF remains due.”
The debentures were not necessary suspicious when one considers that the SCBS was perfectly entitled to conclude these agreements to make sure that it met its capital adequacy, solvency and prudential standards prescribed by the authority.
“However once the FSRA directed that the funds be dis-invested, the SCBS took it upon itself to recover the funds. It did this without the involvement of the regulator.”
Companies not linked to Dave
According to court submissions, there is no proof that the alleged related companies were all managed by Dave Van Niekerk.
The Investors and Shareholders’ defence has made an example of the Status Asset Management (Pty) Ltd which is not under the directorship of Mr Dave Van Nierkerk.
In the continued quest to oppose liquidation, it has since emerged that the former SCBS directors passed a fit and proper assessment.
“What I wish to highlight is the fact that the FSRA conducted a fit and proper inquiry to all the persons presented as directors. The issuing of licenses suggest that the individuals mentioned therein were considered fit and proper to manage the affairs of the SCBS to conduct its business as a financial service provider.”
The new Board of Directors was presented to the regulator and was confirmed fit and proper. The said Board did attend to the regulatory issues and that is why the FSRA awarded and renewed the license and further avoided penalizing the building Society.
“Again, if Mr Dave Van Niekerk’s position as the group’s Chief Executive Officer was an issue, it was the FSRA that should have addressed that aspect.”
FSRA ignored E5k non-compliance fee
The FSRA should have fined the SCBS E5000.00 per day instead of opting for a liquidation.
According to Building Societies’ Act, any Financial Services provider should be fined E5000.00 for failing to provide documentation or information to the regulator. This charge applies every day until such time the documents are filed.
“The applicant has not stated if this fine was imposed or not against the Status Capital Building Society.”
As sourced from the court papers, this qualifies the submission that there was secrecy in the SCBS’s operations.
“In any event, the Society has been under the regulator’s supervision for three years and all operations have been under its guidance. It is not true that the Society lacked internal controls because that’s the first thing that the regulator inquires about and for that, there was no way that the SCBS would have been licensed without this aspect.”
The defence also laments the fact that there are no reports to speak to the averments made by the deponent on the issue of inspections. The administrative penalties are also not mentioned to demonstrate that the SCBS had failed or neglected to comply with the regulatory requirements.
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