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Embattled Aids nutrition company Edge to Edge Global Investments was placed in provisional liquidation yesterday and, if the order is made final early next year, an investigation will begin into allegations that the firm’s directors stole its shareholders’ money.
The liquidation application was argued before Durban High Court Acting Judge Blessing Msani yesterday morning.
He made a swift ruling at 2pm.
“I heard both sides, I have read the papers and I feel the applicants have made out a very strong case,” he said.
Earlier this year, the shareholders, led by Durban businessman Anthony Pinfold, secured from Judge Esther Steyn the first ever order under the new Companies Act, giving them permission to initiate li-quidation proceedings against a public company on allegations of fraud.
Judge Steyn then refused the company’s application for leave to appeal.
The directors, Jan Louw, John Ellis and his wife, Kathy, claimed that they were going to approach the Supreme Court of Appeal, but this has not been done.
The firm’s financial statements for the past two years had not yet been done, the shareholders’ advocate, Greg Harpur, argued yesterday.
And this was in spite of repeated promises, some of which were made after the litigation began.
In his heads of argument, Harpur said that the statements for last year were drafts, and were “seriously deficient” and there was still no sign of the latest statements.
The investors alleged they were duped out of between R70 million and R80m and they wanted a liquidator to probe what happened to their money and if, as they suspect, it was used by the directors to fund their lavish lifestyles.
They said they were assured their money would be used to develop a nutrition pack which was a possible cure for Aids and which would be sold across Africa.
They were told tests were to be conducted by Nobel Prize winner Professor Luc Montagnier and the company had the patents on water-purifying drops and the pack itself. But these were all lies.
While opposing all the court applications, the directors have issued bland denials of any wrongdoing and promises that the financials were being done.
Ellis resigned, saying it was “in the best interests of the company” because he was the one who had done the deals and his resignation negated the need to liquidate the company.
In his resignation letter, he persisted with his claim that the company was “on the verge of finalising the most important clinical trials”.
In spite of his resignation, Ellis was at court yesterday and Harpur argued that “it is probable that his resignation is mere subterfuge”.
The company attorney, Nicolaas Janse van Rensburg, said it was in negotiations with a “big investor”. Answering questions put by Judge Msani, he conceded that there were still no financial statements.
The directors have until the end of next month to file papers opposing the order’s being made final and the matter will be back in court on February 6. - The Mercury