Inside liquidator Murray’s last days
• Millions missing from Constantia
Insolvency specialist Cloete Murray was gunned down just two days after he launched an urgent application with the South Gauteng High Court to invoke section 417 of the Companies Act in his bid to follow the money trail of millions of rand siphoned from Constantia Insurance Company.
The section 417 inquiry is an intrusive tool in the hands of liquidators looking to recover misappropriated assets, and whose conclusions can lead to directors being declared delinquent and facing criminal charges.
A 10-month investigation by Business Day has established that Murray on March 16 2023 applied for a section 417 inquiry to assist in tracing money and assets missing at Constantia.
Murray’s application was to be heard in camera on March 22 of that year. He and his son, Thomas, were brutally killed in broad daylight on March 18 on the N1 north in Gauteng. Their killers have not been found.
Murray’s affidavit reveals his concerns about Constantia, whose books he suspected were cooked to hide money siphoned from the company. He asked the court to enable him and the joint liquidator to launch the inquiry, which would give the commissioner of the inquiry the authority and individuals to subpoena “companies to make available documents, books, records and other evidential material in their possession and/or under their control”.
This was to “contribute to the discovery of assets and/or assist with the investigation into the trade, dealings, affairs and/or property of the company”.
Constantia is a subsidiary of JSE-listed investment holding company Conduit Capital, the stock of which was suspended in September 2022 after Constantia was placed under provisional liquidation. Constantia was at the time Conduit’s largest subsidiary, generating more than 90% of its revenue.
Murray, who had built a reputation as a no-nonsense liquidator, was not short of enemies, having tackled some notorious characters and entities, including state capture-linked Trillian and Bosasa, which implicated several high-profile individuals and politicians.
In his 50-page Constantia affidavit, Murray outlined the main objectives of the inquiry. The first was to investigate the reasons behind Constantia’s insolvency. He also wanted to investigate what had happened to nearly R160m missing from the company’s coffers.
“We as liquidators of Constantia have furthermore established there is, inexplicably so, ... about R156m missing from the insolvent estate of Constantia. The only people who have knowledge of the inner workings, trade dealings and affairs of the company before liquidation are the very people who are directly or indirectly responsible for mismanagement of and depredations of the company.”
Murray’s other interest was in the R60m “high-risk invest
ment” made in the JSE- and Namibia-listed Trustco Group.
“In this regard, we understand from the books and records of Constantia that Conduit’s CEO — Sean Riskowitz — had bound Constantia towards a R60m investment commitment undertaken towards Trustco’s MD/CEO, Quinton van Rooyen, in circumstances where, objectively viewed, Trustco was a failing entity and the risk associated with the so-called investment totally eclipsed any prospect of a reasonable return on investment for Constantia.”
Riskowitz resigned as CEO of Conduit in May 2022, two months before Constantia was placed in liquidation.
He and Van Rooyen have a long history of deal making. Trading in shares of Van Rooyen’s investment vehicle, Trustco, was suspended in November 2022 after the JSE accused it of failing to comply with listing requirements and International Financial Reporting Standards in its 2019 annual and 2020 interim results.
The suspension was lifted in March 2023 after the publication of Trustco’s restated audited annual financial statements for the period to August 31 2022, with independent auditors issuing an unmodified audit report.
Van Rooyen did not respond to a request to comment, while attempts to get hold of US-based Riskowitz failed.
Murray also wanted to probe R580m in claims made against Constantia by policyholders and to recoup R228m owed by debtors. The liquidators had already identified “various individuals whose testimony will assist with our investigations”.
Murray asked the court to hear the application in camera and without the knowledge of Constantia. “We reasonably apprehend that, should this application become public knowledge, there exists a real threat that those possibly responsible for dissipating, misappropriating and/or concealing the assets of Constantia may well employ efforts to defeat the purpose of the inquiry sought to be convened,” Murray said.
He said in the affidavit Constantia management lied to the Prudential Authority (PA) about its financial position in June 2022, particularly minimum capital requirements and solvency capital requirements. Constantia had told the PA its solvency capital requirements were R304m and its minimum capital requirements R272m, against actual figures of R909m and R227m.
Business Day has not been able to establish the fate of the inquiry after Murray’s death. His joint liquidator did not respond to questions. Present and past management of the company also did not comment to questions sent to them. The likelihood of finding the Murrays’ killers is diminishing daily.