Ousted VhaVenda king’s adviser must pay VBS firm R6.5m

Screengrab of the www.vbsmutualbank.co.za website

Screengrab of the www.vbsmutualbank.co.za website

Published Mar 3, 2024


PAUL Makhavhu, dethroned VhaVenda king Toni Mphephu-Ramabulana's legal adviser, must pay the joint liquidators of VBS Mutual Bank’s majority shareholder, Vele Investments, almost R6.5 million he irregularly received in unjustified enrichment.

The 2018 investigation into the affairs of VBS described Makhavhu as a practising attorney who acted as adviser to Mphephu-Ramabulana.

He and the ousted monarch received vast sums of money for lending the support and influence of the royal family to VBS and Vele Investments.

Makhavhu described the receipt of those payments as "shameful" to Advocate Terry Motau, who conducted the probe. The attorney also admitted that there was no lawful cause whatsoever for these payments.

In the application by Vele Investments, the joint liquidators wanted Makhavhu to repay nearly R6.5m he received in 38 payments made to his Nedbank account, VBS home loan account and his current account held with VBS between January 2017 and February 2018.

According to the Limpopo High Court in Thohoyandou dated February 16, Vele Investments was all times insolvent as it did not have any legitimate income, and with every payment the company received from VBS Mutual Bank, a corresponding liability was created to repay that money to VBS.

Vele Investments was wound up in July 2018 by a high court order and is duly represented by the joint liquidators – Richard Pollock, Nurjehan Abdool Gafaar Omar, Oscar Sithole, Ignatius Shirilele and Michelle Schutte.

Makhavhu tried to get the matter postponed, but his application was rejected. The court found that his reasons for the request for postponement were that he lacked funds to travel from Limpopo to Sandton for inspection of documents.

This, when they were tendered by the joint liquidators, and his legal representative was not available to attend the inspection, as well as the fact that the documents provided were voluminous.

”The respondent's (Makhavhu’s) historic conduct displays a general disregard of time limits set in court rules, orders and directives. Such a conduct is unbecoming of a legal practitioner.

“In my view, the respondent tactically failed to attend this matter with the earnestness it deserves,” reads the judgment handed down by Acting Judge IM Khosa.

The acting judge found that Makhavhu’s lack of funds and unavailability of preferred counsel could not serve as a basis for a postponement and that he failed to show good cause for the postponement of the hearing of the main application.

In his response to Vele Investments in court, Makhavhu stated his basis of defence as that there was value or benefit to the company for the payments he received as well as that he was a service provider and has rendered services to Vele Petroport.

He maintained that Vele Investments benefited from the services he rendered to Vele Petroport, which is a separate legal entity and autonomous, but have a subsidiary or shareholder relationship.

”The respondent (Makhavhu) is liable to repay Vele Investments the 38 payments, totalling to the sum of R6 491 429.81 to Vele Investments as they are dispositions made for no value to Vele Investments when Vele Investments' liabilities exceeded its assets,” the acting judge found.

Makhavhu was also liable for interest on each amount at the rate of between 10.5% and 10.25% per annum to the date of final payment.

Makhavhu said his legal team is still considering the judgment and the decision whether to appeal the judgment or not will be arrived at in due course.