Former Chemspec boss sequestrated

Durban - Strath Wood, the former boss of JSE-listed Durban paint company Chemspec, has been provisionally sequestrated and a trustee, armed with the insolvency legislation, will now dig into his affairs to see if he has hidden money from his creditors.

Wood left South Africa for the US under a cloud in 2010, soon after he resigned as chief executive of the company after a judge ruled he had lied and fabricated evidence as he tried to bat off an almost R3 million claim from one of his creditors, International Financial Advisors (IFA).

Tipped off that Wood was in South Africa for a brief visit in March, IFA’s lawyers acted quickly, serving the sequestration application on him and his wife, Kathleen. The matter was heard by Durban High Court Judge Yvonne Mbatha in September.

In spite of claims by Wood that he had no assets and there would be no benefit to creditors, the judge ruled yesterday that his protestations fortified “a genuine expectation that a proper investigation into his affairs would lead to a substantial windfall for his creditors”.

Apart from probing the extent of his “family trust”, the trustee will also probe his stake in two companies which were involved in the acquisition of the Chemspec site, north of Durban, said to be worth R144m.

The IFA debt relates to a case in which it successfully sued him after accusing him of buying 25 million shares on its behalf in the Don Hotel Group, selling them and pocketing the money.

Stripped

When the sheriff tried to serve a writ of execution at Wood’s home in uMhlanga, the house had been abandoned and stripped of everything.

IFA attorney Greg Larson said in the court papers that this was “a classic case of a debtor fleeing the country to avoid his debts”.

The property yielded only about R1m at auction because of an outstanding bond.

Wood’s former colleague, attorney David Randles, is also suing him for 10 million Chemspec shares, which he claims Wood promised him as an incentive to join the company.

Wood, who is living in Medina, Ohio, claims to be unemployed and to have no assets of any value. But the judge said that IFA had itemised various assets in which Wood might have a financial interest.

“It must be added that these assets were not uncovered with his assistance. This application was a decidedly acrimonious one,” she said.

She said the sequestration would “not be helpful in their ambitions” to become US citizens.

IFA, she said, had made a case that Wood was the “controlling mind” of his family trust and that the trust was a shareholder in Chemspec, with 5 861 shares in the listed company.

“In addition, he is alleged to have been a director of some 28 other companies.”

She aligned herself to IFA’s contention that Wood used the trust and companies “to insulate his wealth from creditors” and that a trustee needed to “pierce the veil” and locate assets which, in reality, belonged to him.

The matter will be back in court early next year.

The Mercury