An insolvency inquiry, a closed process aimed at investigating the finances and any potential malfeasance by a company and its directors, has been established by the liquidators of Bosasa. It marks a significant milestone in the downfall of a company that has for decades been synonymous with allegations of corruption.
The children and nephew of late Bosasa CEO Gavin Watson – Lindsay, Roth and Jared Watson – have been subpoenaed to appear before a confidential insolvency inquiry where they are set to be interrogated about the corruption accused company’s affairs.
The subpoenas mark the next chapter in the acrimonious battle between the liquidators and Watsons who have been fighting in the courts to keep Bosasa alive since February last year.
The liquidators approached the High Court earlier this year to obtain an order granting the establishment of the inquiry. The court granted the application which also sought to convert the voluntary liquidation to a compulsory one.
Retired Judge Meyer Joffe was appointed by the court as commissioner. He presided over the corruption trial of former police commissioner the late Jackie Selebi.
The young Watsons are the first individuals to be subpoenaed by the inquiry and it is understood the list of individuals, which will include recipients of suspicious payments and other directors, will be lengthy.
Liquidator Cloete Murray would not confirm to News24 whether President Cyril Ramaphosa’s son, Andile Ramaphosa who had a questionable deal with Bosasa through his company, Blue Crane Capital, was one of the individuals who would be subpoenaed.
He said he was precluded from commenting on any specific transaction, persons or institutions that “might have benefitted” from one or more of the [Bosasa] companies until the liquidator’s investigations have been properly concluded.
In March last year, News24 reported Andile Ramaphosa had admitted to being paid R2m by Bosasa in accumulated monthly “retainer” fees for advisory work on a “pipeline” of more than 20 projects in East Africa.
Bosasa, or African Global Operations (AGO) as it is now known, was placed under voluntary liquidation in February 2019 – which the court has now converted to a compulsory one.
“In pursuance of these investigations, the liquidators have applied for and have been granted a consent order to hold an inquiry in terms of sections 417 and 418 of the Companies Act by the High Court. In these inquiry proceedings several individuals have been identified and subpoenaed to appear,” Murray said.
“The inquiry will, among other matters, focus on impeachable transactions in terms of … the Insolvency Act. The inquiry will also focus on the reasons for the failure of the company and the possible personal liability of the directors of the companies,” he added.
Murray emphasised the proceedings were confidential and only creditors could attend.
The establishment of an insolvency inquiry marks a significant milestone in the downfall of Bosasa, a company that has been shrouded in allegations of corruption for more than a decade.
It started in February 2019 when Absa and FNB both issued letters to Bosasa notifying the company and its executives they would be closing their accounts – a direct result of nine days of bombshell testimony before the Zondo commission into state capture by former Bosasa chief operations officer Angelo Agrizzi.
Soon thereafter government departments, including home affairs and justice, announced they would be cancelling long-standing and lucrative tenders Bosasa had held. According to a schedule of payments compiled by National Treasury, Bosasa was paid more than R12bn between 2004 and 2019 by various provincial and national departments.
The company’s directors, accepting legal advice, placed the Bosasa group (11 companies) under voluntary liquidation later the same month.
Since then, the decline of Bosasa has been marked with litigation and the shock death of Gavin Watson, considered a central figure in allegations of corruption, in August last year.
The directors successfully set aside the voluntary liquidation in the high court, only for the liquidators to approach the Supreme Court of Appeal (SCA) and succeeding in overturning the high court’s decision, effectively placing the liquidators back at the helm.
On the eve of a well-publicised auction of Bosasa‘s assets, Jared Watson, then a newly appointed director of Bosasa, filed an application in the High Court to have the companies placed under business rescue instead.
The South African Revenue Service (SARS) is opposing the application for business rescue.
It said in court papers Bosasa owed the taxman more than R500m. News24 understands this figure may increase.
The R500m figure stemmed from a secret tax inquiry looking into the tax affairs of Bosasa and its executives convened last year. It is understood that SARS, once it has raised an assessment of the taxes due, will become and remain by some margin Bosasa’s largest creditor.
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