Sultan’s millions sink with broke yacht firm
UAE royal trails R18m allegedly blown by top SA boat builder
● Sultan Ahmed Ghunou Al-Hameli was promised his dream yacht: a luxury cruising catamaran to be built by one of SA’s top boat builders.
Six years later the enraged United Arab Emirates royal is piecing together an incomplete paper trail of his misspent millions after he fell victim to a R100m alleged ponzi scheme described in court liquidation proceedings.
Court papers show that instead of delivering his yacht, the boat builders spent much of the sultan’s cash on other clients’ boats as well as company cars and personal items including alcohol and home improvements, according to testimony in the company’s liquidation hearing which has recently come to light. They did this while hiding that the company was technically insolvent, witnesses said.
Al-Hameli, who invested about R18m and eventually sold his unfinished hull for R100,000, has emerged as the key figure in an investor fightback against Tag Yachts, which culminated last week in two arrests.
Tag Yachts SA CEO Tim van der Steene and his co-director, Ryan Osborne, appeared on fraud charges in the Port Elizabeth commercial crimes court earlier this month. They have yet to plead.
According to the charge sheet, Van der Steene lured investors with the promise of a stellar luxury boat business. But it only ever produced three vessels and left a trail of bad debt. Investor funds were used to plug holes in company finances, and South African taxpayers were exposed via an earlier loan from the Industrial Development Corporation.
The arrests brought some relief to AlHameli, who testified at the liquidation hearing. “On behalf of my client Mr Al-Hameli, we would like to express our recognition and gratitude to the prosecuting authority for giving our client an opportunity to have his case brought before a South African court,” the sultan’s lawyer in SA, Imraan Lockhat, told the Sunday Times.
“We look forward to watching the process unfold. The decision by the National Prosecuting Authority vindicates our client’s ongoing faith in the South African criminal justice system.”
Others caught up in the affair include an Argentine steel company CEO who invested R33m and a Swiss private equity adviser who invested R18m, the court heard.
It is unclear to what extent Van der Steene is to blame or whether he was partly a victim of mismanagement in the firm. Earlier this year his former bookkeeper, Bridgette Wait, admitted to stealing R3m by substituting her banking details for those of creditors.
The businessman told the Sunday Times in a WhatsApp: “Sorry, can’t say anything more other than not guilty of the charges against me, that I intend to plead accordingly and that I have no further comment.”
Van der Steene met Sultan Al-Hameli in September 2013 at the Festival De La Plaisance Boat Show in Cannes, France, where a Tag yacht was on display. The Sultan agreed to buy a Tag 50 for $1,347,433 (about R14m at the time), to be completed by February 2015.
The sultan, under the impression Tag was building a facility in Port Elizabeth, was persuaded to become an investment partner.
“The truth, however, was that Tag SA was not as well-established and successful as [Van der Steene] pretended it to be in Cannes,” the charge sheet says. “Tag SA was deep in debt at the time, owing many millions to shareholders and financiers; the company was trading at a loss and its liabilities exceeded its assets by far.”
Some of the sultan’s funds invested in the investment company Tag 50 were transferred to Van der Steene’s company, Tag Yachts SA, and used for unrelated purchases, some personal. Van der Steene acknowledged some of these purchases at a time when the company was still unprofitable, including a R450,000 Toyota Land Cruiser “for business use”. And while the company was struggling he made personal purchases from his private account, including a R30,000 couch and a R40,000 bicycle, it emerged under cross-examination by Lockhat during the liquidation inquiry.
Osborne, who resigned from Tag in 2016, told the court that at one stage the sultan’s investment was the company’s only source of income. He said the sultan was not kept informed of the company’s financial plight, earning a rebuke from one of the sultan’s lawyers, Paul Preston, who said: “What did you take the sultan for? An idiot that you could just not disclose this info to him, or were you just trying to leach as much money off him as you could?”
The demise of Tag shocked the boatbuilding industry, partly because the company was a flagship recipient of R20m in government funding via the department of trade & industry’s manufacturing competitiveness enhancement programme.
In an interview with Boating SA last year, Van der Steene denied knowledge of any financial irregularity. He blamed the demise of the investment company on clients withdrawing their support.
Al-Hameli could not be reached for comment but aired his views when testifying in court in July last year. He said potential investors in SA should ensure they find “the right people”.