David van Niekerk loses interdiction case

The founder of GetBucks Botswana (now FirstCred), David van Niekerk, has lost with costs a case in which he sought to interdict The Business Weekly & Review against publishing any information relating to the mismanagement and creative looting of hundreds of millions which were raised from a P500 million domestic medium note programme listed on the Botswana Stock Exchange (BSE). In a judgement that was delivered by Justice Ookeditse Maphakwane of the Lobatse High Court on the 5 December 2022, David van Niekerk’s urgent application was dismissed and costs awarded to The Business Weekly & Review on an ordinary scale including costs of two attorneys. [ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,3,4" ihc_mb_template="3" ] Justice Maphakwane’s reason for dismissing van Niekerk was that he did not satisfy his requirements for an interim interdict, leading to the refusal of his application. Minchin & Kelly represented van Niekerk while Rockfall Lekgowe Law Group represented The Business Weekly & Review . In arguing his points of law, Justice Maphakwane noted that the court found that van Niekerk’s remedy lay in defamation charges rather than an interdict. Further, he said it was all within van Niekerk’s power to galvanise himself into action and seek appropriate remedy of damages for defamation action. According to Justice Maphakwane, in order to be granted the interdict, van Niekerk was required to prove the existence of a prima facie right and a well-grounded apprehension of harm, ensure that the balance of convenience favours him, as well as prove that there is no other satisfactory remedy available. While Justice Maphakwane stated that van Niekerk may have established a prima facie right to protect his human dignity and reputation against any defamatory publications, the issue is whether van Niekerk had demonstrated a well-grounded apprehension of harm for purposes of the interdict he applied for. “The inherent difficulty would equally provide an answer to the issue of whether the reliefs sought are competent in circumstances of this case,” said the judge, adding that even though van Niekerk sought to limit the scope of his argument to existing online publications of the alleged defamatory material, it appeared that he actually sought an interdict against future publications when he had not proved or provided evidence that there was any intended future defamatory publication. Further, the judge said van Niekerk could not seek a speculative interdict when he did not satisfy the court of the possibility of such future publication. That essentially meant, the judge added, that van Niekerk had failed to prove a well-grounded apprehension of harm. Further, Justice Maphakwane said another challenge that undermined van Niekerk’s apprehension of irreparable harm was that the alleged defamatory material, as demonstrated by the series of the said offending articles, had already been published in both print and online platforms. With regard to the alleged defamation, the judge stated that The Business Weekly & Review had not shown to have any difficulty in proving its defences, particularly reasonable publication, which is predicated on the answering affidavit of Dudu Garekwe, the current CEO of FirstCred (former GetBucks), which was availed in this legal proceedings. Further, the judge spoke of the Audit Report on FirstCred which points to van Niekerk as being responsible for FirstCred’s financial doldrums; a report that has also been availed. “This is not to say the Respondents ( The Business Weekly & Review and its Managing Editor) have proved their defences, but as having no difficulty in demonstrating the potency of their defences. “This therefore is not an appropriate case in which an interdict may be granted to curtail or restrain the freedom of the press,” Justice Maphakwane said, adding that the right of the freedom of expression must prevail because van Niekerk had failed to meet the requirements for interim interdicts. In September last year, van Niekerk, through his attorneys, filed an urgent application to interdict this newspaper from publishing information relating to allegedly mismanaged funds by the company under the former management, which were raised from a P500 million domestic medium note programme listed on the BSE. The looted FirstCred Van Niekerk sought stop The Business Weekly & Review from reporting on the contents of documents filed at the Gaborone High Court, amongst them a petition written by a group of creditors seeking for FirstCred to be liquidated because it was basically insolvent as a result of mismanagement chronicled in FirstCred CEO, Dudu Garekwe’s court filing. In the papers, Garekwe has blamed the company’s former directors and shareholders for the microlender’s cash constraints and declared herself and current management free of any wrongdoing. Van Niekerk forms part of the previous management referred to by the current FirstCred CEO in court documents. The CEO, in her submission before court, sought to and successfully blocked the liquidation of the lender, arguing that the company’s cash crunch is in “no way attributable to the business management and acumen of the current directors and shareholders”. She testified that “the cash constraints experienced by FirstCred are the result of maladministration by its erstwhile directors and shareholders”. However, Van Niekerk said The Business Weekly & Review was defaming him and wanted it blocked from reporting further details regarding the funds alleged to have been mismanaged. FirstCred had issued a note programme of P500 million, guaranteed by its mother company, MyBucks SA Luxembourg. GetBucks Botswana (as it was known) raised funds through the note programme which provided for notes to be issued in various series and tranches. Garekwe told the court that the first tranche of notes was in an aggregate amount of P200 000 000. The funds were primarily raised from AS Mintos MarketPlace and from a listed bond on the Botswana Stock Exchange whose investors included ALCB Fund managed by Lions Head and Ecsponent Limited (now Afristrat Investment Holdings Limited). The creditors ALCB Fund and AS Mintos Market Place approached the High Court seeking to wind up the company, arguing that it was unable to repay its debts because it was burning cash. In their petition, the creditors stated that it had come to their attention that the company had instituted a forensic investigation into how the proceeds received by the company in terms of the bonds note programme were utilised. “There is an allegation that the proceeds were improperly diverted from the accounts of the company to those of the parent company,” the petitioners wrote. “That there is a real risk that the assets of the company are being dissipated dictates (that) a provisional liquidator be urgently appointed in order to assess the position of the petitioners and take control of the assets for the benefit of all the creditors.” According to Garekwe, forensic examinations have established that P160 million was raised between 2017 and 2019 and that “a considerable portion of the funds raised by GetBucks Botswana was misappropriated by its former board of directors, led by the original CEO, Dave van Niekerk”. “P120 million of these funds was grossly and inappropriately misused and this resulted in its loss,” she said. “Such was the level of malfeasance that investor funds only spent two days in the then Getbucks Botswana bank accounts before they were taken out of Botswana and spent.” As a result of “misdeeds by previous management”, Garekwe said it is almost “impossible for the now FirstCred to repay investors who became victims of previous management’s mismanagement and poor governance practices between 2017 and 2019”. She asserted: “We have reported the findings of the forensic reports to the regulatory authorities for investigation and have retained counsel with a view on legal action against individuals implicated.” However, in his founding affidavit, which is part of his application to interdict The Business Weekly & Review from publishing any further information regarding the alleged mismanaged funds at FirsCred by the erstwhile management and directors, van Niekerk said in the majority of the funding for the lending operations carried out by FiestCred up until 2016 had been obtained through US Dollar-denominated loans obtained from its parent companies, GetBucks Mauritius Limited, at an annual interest rate of 20 percent. Further, he said as at 30 June 2016, the balance of the loan due from FirstCred to GetBucks Mauritius was P58million. Ecsponent Limited, now Afristrat Investment Holdings Limited, a company incorporated in South Africa and managed by George Manyere, provided most of the funding to GetBucks Mauritius. Van Niekerk further stated that a bridging finance facility had also been provided from RBC Trustees backed by businessman and a major shareholder in My Bucks SA Limited, Chris Rocos, by the My Bucks Group which he said was also US Dollar-denominated and bore a 28 percent interest rate annually, part of which was advanced to FirstCred by GetBucks Mauritius. He also mentioned the UK-based company, TLG Capital, to have provided a US Dollar-denominated loan to My Bucks Group, bearing an interest rate of between 7 and 20 percent, part of which was extended to FirstCred. By listing the bond programme, van Niekerk said FirstCred was trying to reduce the cost of funding, especially from US Dollar-denominated loans, and to reduce currency risk exposure. The bond, he stated, was intended to expand FirstCred’s operations and loanbook, refinance existing financing facilities to reduce cost of funding, and to limit currency exposure. As a result, van Niekerk said the P116 million raised from the bond programme was used to settle US Dollar-denominated loans from the FirstCred offshore related companies and pay for loan management services, while some were used, according to him, to advance about P31 million to GetBucks Mauritius Limited as intercompany loan bearing a 20 percent annual interest rate guaranteed by My Bucks SA Limited. He further stated that contrary to what was reported by The Business Weekly & Review (which is basically what was stated by the FirstCred CEO in court), the funds deployed by FirstCred offshore were actually used in accordance with the purpose set forth in the bond programme. Although Van Niekerk stated so in his affidavit seeking to interdict The Business Weekly & Review from publishing anything regarding the GetBucks allegedly mismanaged funds, papers filed before court, which include First Cred CEO’s affidavit as well as a petition by the creditors (who saught to liquidate FirstCred), suggest that the funds were mismanaged, and by the former management and directors for that matter. Further, there is a forensic investigation done specifically on the matter that also shows that funds were not used in accordance with the purpose of the P500 million medium term note programme. What van Niekerk also said in his affidavit is that he ceased to be part of the FirstCred managemet in 2019, when MHMK Botswana bought the shares of My Bucks SA Limited in FirstCred. Further, he stated that when he left FirstCred it was profitable until the current management took over. Van Niekerk wanted the court to issue an order interdicting The Business Weekly & Review from publishing anything that is related to the GetBucks mismanagement and said he intended to sue for defamation. The Business Weekly & Review has successfully defended itself against such an interdiction, which was aimed at intimidating this publication and oppressing media freedom. [/ihc-hide-content]

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