Massyn in crosshairs
SEQUESTRATION BID: R2BN OWING TO IMAGINA INVESTORS
Process based on two claims of R9.1m and R5.7m owing to Imagina FX and Octox.
The liquidators of Imagina FX, the failed investment company that was placed in final liquidation in November 2020, have trained their sights on the founder and chief operator, Craig Massyn.
An application has been made in the Cape High Court for the sequestration of Massyn and his wife, Mara-Lee, based on two claims of R9.1 million and R5.7 million owing to two companies formerly under his control: Imagina FX and Octox.
The liquidators claim the Massyns are insolvent and are unable to pay their debts.
Massyn is opposing the application, claiming it is an abuse of the court process, and that he is not insolvent, but his court filings offer no indication as to what happened to the estimated R2 billion the liquidators claim is owed to investors.
Moneyweb previously reported on the failed investment scheme, which traded under a variety of names, including Imagina FX, Praesidium and Octox.
According to the liquidators, the companies managed to attract more than R2 billion from investors by apparently showing annual returns of 43.5% and even as high as 74.3% in one year.
All this was nothing more than a Ponzi scheme, say the liquidators, with newer investors’ funds being used to pay older ones.
Things started unravelling last year when Covid hit
The company blamed this “black swan” event for a 40% drawdown in funds under management.
Just a few weeks after the “black swan” announcement, things seemed to be back on track. On 26 May last year investors were informed that the returns for that month would be about 1.5%. This was false, say the liquidators.
Several investors became nervous and started asking for their money back. Their requests for withdrawal were met with a string of messages explaining technical and regulatory hurdles that had to be crossed before money could be released.
In a letter to creditors on 9 March this year, Imagina FX joint liquidator Christian Bester advised that many investors were paying funds into the FNB banking account of Octox, believing this was the banking account of Imagina FX.
“During our investigations it was discovered that amounts totalling R1.5 billion were deposited into the banking account of Octox (Pty) limited.
An application was launched for the provisional liquidation of Octox and was granted on 9 December 2020, with final liquidation being granted in the Western Cape High Court on 22 January 2021.”
Sequestration request
The liquidators of Imagina FX and Octox are now asking the high court to sequestrate the Massyns and to hold them personally responsible for the debts and liabilities of both Imagina FX and Octox in terms of section 424 of the 1973 Companies Act.
On 27 October last year the liquidators were granted an Anton Piller order to search (without warning) the business and residences of directors of the company for information as to the whereaSteinhoff bouts of the missing money.
Massyn claimed the Anton Piller order was unlawfully executed, and brought a case seeking to overturn this on 25 February this year. The court rejected Massyn’s application, and he is now appealing this.
Of the R1.5bn paid into the Octox bank account, only R21 000 was left
According to the liquidator’s court filings, from July 2014 to October 2020 about R1.5 billion was paid into the FNB account of Octox. By October last year there was only about R21 000 left in the account. More than R2 billion was received in the bank accounts of both Imagina and Octox.
Where did all this money go? Massyn’s replying affidavit in the sequestration case provides almost no clues whatsoever. The sequestration application will be heard in court next week.