Mercantile Bank accused of illegal asset
Mercantile Bank has been taken to court over allegations it conspired with an alleged fraudster in illegal asset stripping worth hundreds of millions of rands. A Fin24 report says the litigation could not have come at a worse time, as the Portuguese-owned and SA-based bank is up for sale. Alert Steel is seeking damages of R351m caused by alleged ‘mastermind’ Rayhaan Hassim, Mercantile Bank and West Lake Trade and Investments following what it believes was an illegal liquidation process in 2014.
ArcelorMittal SA has joined Alert Steel as a second plaintiff in the matter. Alert Steel’s counsel, Wim Trengove SC and Emmanuel Limberis SC, filed papers in the Gauteng High Court (Johannesburg) on Friday and included the Master of the Court as a defendant, as the court finalised the liquidation.
Mercantile Bank reportedly told Fin24 yesterday that it ‘intends to rigorously defend the matter’ as it believes the case is ‘fraught with factual inaccuracies’.
Detailing the conspiracy, Trengove and Limberis explain how Hassim, Mercantile Bank and others ‘conspired to devise and implement a scheme, to transfer the plaintiff's business and all its assets to a new company held by Mr Hassim (West Lake); to pay the plaintiff's loan liability to Mercantile Bank in full; and to put the plaintiff in liquidation’.
They add: ‘The purpose of the scheme was to appropriate all the plaintiff's assets for the benefit of Mr Hassim and Mercantile Bank at the expense of the plaintiff's other creditors.’
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
