Lawyer ‘lured by big and easy money’
A CAPE Town lawyer who was “lured from the path of righteousness by the attraction of big and easy money” was asked to surrender his certificate of enrolment as an attorney within 10 days after he was struck off the roll last week.
Dines Gihwala, a senior practitioner was given the boot by Cape Town High Court Judge Mark Sher last Tuesday after being found guilty of 10 counts of unprofessional and dishonourable conduct.
Gihwala was taken to court by Karim Mawji, chief executive of Swiss-based asset management company Montague Goldsmith, to the Cape Law Society regarding several “underhanded and fraudulent” business dealings and investments.
One was paying fees to Stellenbosch University for the daughter of a beneficiary of his family trust using “interest” that belonged to Montague.
According to court papers, Mawjii was introduced to Gihwala in 2001 by a longtime friend of his, Anil Narotam, who was employed as Montague’s chief operating officer.
Montague is said to have acted as an investment adviser and agent of investment company Grancy Property Limited.
The relationships turned sour when Gihwala introduced Mawjii and Narotam to two investment schemes in 2005.
The first was known as the “Spearhead” investment, a commercial property loan stock company which was listed on the JSE.
The offer was said to be part of a Black Economic Empowerment (BEE) opportunity, as Spearhead wanted to attract black investors to raise additional capital.
In order to take up this opportunity, Gihwala suggested they use a “black empowerment company” Ngatana Property Investments (Pty) Ltd, which was apparently conceived by a business partner of his, Lancelot Manala.
Manala apparently did not have the necessary financial means to meet the cost of his one-third contribution to the venture and it was agreed that Grancy and Gihwala would each lend him half of the cost.
The deal was done on the basis of a handshake in a hotel room in Joburg on February 3, 2005, as Mawjii was led to believe that time was of the essence.
Judge Sher said one would have expected that as experienced asset managers Mawjii and Narotam would have ensured that the necessary written contracts.
“Mawjii said that he went ahead because Gihwala held out that he was a member of an honourable profession, which subscribed to a code of ethics which would make it ‘unthinkable’ for him to act in an unprofessional, let alone a wrongful or fraudulent manner.”
The second investment was through another JSE-listed company, a local mining company called Scharrig Mining Ltd that was said to be BEE compliant.
Montague apparently transferred R3.5 million into the trust account of Gihwala’s law firm. The money was then deposited into Manala’s loan account. This allowed Manala to draw considerable sums of money out.
Gihwala is also said to have transferred R10m of Montague’s investment from his law firm’s account into an interest-bearing investment account, but the money was reflected as belonging to the law firm.
When Narotam asked Gihwala to provide details on the investment, Gihwala eventually refunded the capital amount but withheld the interest.
Judge Sher said cracks began to appear in the trio’s relationships and a “mind-boggling plethora of law suits and expansive and costly litigation ensued between the parties, over many years, following the termination of their business relationship”.
This went up all the way to the Supreme Court of Appeal that found Gihwala and Manala had constituted wilful misconduct.
Judge Sher said Gihwala, who had over 40 years of experience in law, had an impressive resumé and quoted from it during his judgment.
“It will illustrate the startling disparity between the heights to which he soared in his professional life and the depths to which he has fallen.”
Judge Sher mentioned that Gihwala was the managing partner and former chairman of one of the largest and most wellknown and respected law firms in South Africa, Cliffe Dekker Hofmeyr.
He also served as an acting high court judge for some time.