The SCA has dismissed an appeal by the black investment firm, Lebashe, to halt the liquidation of Bophelo Life and Nzalo Insurance, reports Fin24.

The two insurers were placed under provisional curatorship in 2018 and eventually under provisional liquidation in February 2019.

But Lebashe objected and took its case to the SCA, arguing that the liquidation orders were premature.

Bophelo became one of the casualties of the VBS ‘bank heist’ when the R100m it had invested for one of its clients, Transport Sector Retirement Fund, was stolen, along with almost R1bn that vanished from VBS accounts.

As a result, the Prudential Authority stepped in and placed Bophelo under provisional curatorship in November 2018.

The regulator also placed Nzalo Insurance Services, a short-term insurance arm of the Bophelo Insurance Group Limited, under provisional curatorship.

While the insurers were under provisional curatorship, the Prudential Authority applied for a winding-up process, arguing that they were ‘hopelessly insolvent’.

Eventually, the Gauteng High Court (Johannesburg) issued final liquidation orders for both insurers.

However, Lebashe, which was now the insurance group's majority shareholder and creditor, tried to stop the liquidation, taking the High Court's ruling to the SCA.

It argued that the liquidation orders were premature, as the curator had not yet reported on the steps Lebashe took to recapitalise the insurers.

It wanted the SCA to overturn the liquidation orders and reinstate curatorship instead. 

But the SCA handed down a ruling this week, saying that the curatorship was only a means to an end – a temporary measure before possible liquidation and was never meant to rescue the insurer's business.

The SCA said the High Court ended the curatorship when it issued an order for the final winding-up of the two insurers.

Full report on the Fin24 site

Judgment