SA shareholder loses E12 million battle against gaming company
ASouth African shareholder’s E12 million demand from Q’s Swaziland (Pty) Ltd a gaming company in the country and its other two directors has been dismissed by the court.
In 2010, then Minister of Tourism and Environmental Affairs Macford Sibandze granted a gambling licence to the company despite objections from competitors.
It was solely owned by Jacques Van Der Heever who was facing a barrage of criticism from competitors because of his approach to the industry where he sought to have many branches at once.
He was granted a licence to operate in the country for 10 years and opened two shops in Manzini and Matsapha with the intent to open several others countrywide which sparked an uproar from competitors.
In March 2024, Van Der Heever put in an urgent application for an order to have two other South African directors Ioannis Calvitis and Delport Willem Joseph pay him E12 million in respect of 50 per cent shares to the company he sold them.
In her judgement, Judge Mumcy Dlamini noted that Van Der Heever averred two different grounds based on the amount demanded.
The first ground was that he is paid the sum of E12 million which Calvitis and Joseph who are the shareholders and respondents in the matter refused to pay in respect of the 50 per cent shares he sold.
He also deposed in the same affidavit that the E12 million was for taxes and statutory obligations due by Q’s Swaziland. The court therefore questioned which version should it accept.
“In law, there is no reason that the twocontending basis for the E12 million is deposed by the same litigant, the applicant. No court must rely on a contradictory affidavit. The applicant’s case is flawed, therefore,” the judge stated.
Judge Mumcy said another puzzling factor in the matter was that Van Der Heever deposed that he sold 50 per cent of the shares to Calvitis who then sold part of his shares to Joseph. However, he claims the two shareholders failed to pay him the E12 million, therefore a declaratory order must be made against both of them.
The court further questioned how such could be made against Joseph because Van Der Heever averred that despite multiple meetings with Calvitis where he was demanding payment of the money owed, he failed to do.
He ended up telling Joseph because he had reasons to believe Calvitis had withheld that information.
The court stated that the upshot of these averments is that Van Der Heevers cannot seek the order against Josephs by reason that he was never part of the sale of agreement. He cannot be held under an agreement in which he was not a party. Even if Calvitis told him that he was owing.
Secondly, even if the assumption is that Van Der Heever had mentioned that the E12 million was for the 50 per cent shares purchased by Calvitis from him, it would be false that it is an amount still owing and due to him.
Clause 2.2 of the agreement reflects that each shareholder held 50 per cent shares, so whether the sum is E12 million as contended by Van Der Heever or E300,000 by Calvitis is neither here nor there in the face of shareholders’ agreements showing that the shares were “fully paid up”.
The document with this information titled ‘shareholders agreement’ was attached to the founding affidavit by Van Der Heevers, and the court questioned why he claimed that the two shareholders breached the material terms of the sale of shares agreement by failing to pay for the 50 per cent shares.
“The response is that it is not clear in the face of the shareholders agreement. In law, however, this is another reason why the applicant’s case must fail on his founding affidavit.
Even if the court were to admit the position that the E12 million is in respect of taxes and statutory obligation by the company the money first and foremost is not due to Van Der Heever, but to the government of Eswatini and Provident Fund.
Also, the money is not owed by the shareholders but the company that ought not to be treated as an entity without rights and obligations,” said the judge.
The court identified the company as a fully-fledged legal persona discharging its duties through the hands of its directors of whom Van Der Heever is not spared.
The judge also noted Van Der Heever’s lamenting that he is a minority with 33 per cent in the company but does not state how the two shareholders were able to get shares combined which outnumber his.
The interference according to the court is that he either sold part of his 50 per cent shares to Josephs or a third party who in turn sold it to Calvitis who is the first respondent in the matter. Or, he could have sold more shares to Calvitis after the shareholders’ agreement of March 3, 2015.
“What is clear, however, is that he is responsible for dwindling his shares which stood at one point in time at 50 per cent as was stated in the agreement. The court cannot come to his rescue once he is outvoted by the other shareholders. He is the architect of his downfall,” he said.
The court further stated that another circumstance that cannot be ignored in the application is Judge Mamba’s judgement which was attached in the founding affidavit at the instance of the applicant where Calvitis and Josephs were the applicants, and Van Der Heever was the respondent.
Amongst the orders sought was to compel and direct the Gaming board and the Ministry of Tourism and Environmental Affairs to recognise Calvitis and Josephs as shareholders and directors to operate Q Swaziland’s affairs.
They also prayed for the court to declare that the public Lottery Licence be granted in favour of the company and not in Van Der
Heever’s capacity.
Judge Mamba refused to grant the orders sought on the grounds that the arrangement by the applicants was contrary to the law. They had split the company into two in that they were running it for their benefit, while Van Der Heever was running the same company for his profit.
The other directors had also not been vetted in terms of Section 13 (1) of the Lotteries Act No 4 of 1963 as amended.
In the present case before Judge Mumcy, Van Der Heever prayed for the court order directing the Gaming Board to expunge Calvitis and Josephs as directors of the company.
The court questioned what ill would granting such an order cure in the light of the judgement by Judge Mamba.
“Its upshot is that the two men cannot lay claim of directorship in the company whose objective is to carry out gambling activities in the country by reason that they were not vetted for purposing of licencing.
“Therefore, the prayer to have the two shareholders expunged as directors from the records of the Registrar of Companies is moot under Judge Mamba’s judgement.,” the court said.
Judge Mumcy referenced Judge Mamba’s judgement where he stated that all three shareholders including Van Der Heever are not without blame.
Judge Mamba stated that consequently in his discretion, he did not think that any of them were entitled to an order for costs in the application.
Judge Mumcy said he holds a similar view, adding that what aggravates Calvitis and Joseph’s position is that they failed to even spot from Van Der Hevver’s founding affidavit the obvious and glaring contradictory grounds of the claim of E12 million.
“The application is dismissed with no order to costs,” ordered the learned judge.
The application was dismissed with no order to costs.