Paul Makhavhu, dethroned Vhavenda king Toni Mphephu-Ramabulana's legal adviser, must pay the joint liquidators of VBS Mutual Bank’s majority shareholder, Vele Investments, almost R6.5m he irregularly received in unjustified enrichment.

A Sunday Tribune report says the 2018 investigation into the affairs of VBS described Makhavhu as a practising attorney who acted as adviser to Mphephu-Ramabulana. He and the ousted monarch received vast sums of money for lending the support and influence of the royal family to VBS and Vele Investments.

In the application by Vele Investments, the joint liquidators wanted Makhavhu to repay nearly R6.5m he received in 38 payments made to his Nedbank account, VBS home loan account and his current account held with VBS between January 2017 and February 2018.

According to Limpopo High Court (Thohoyandou) Acting Judge Itumeleng Khosa, Vele Investments was all times insolvent as it did not have any legitimate income, and with every payment the company received from VBS Mutual Bank, a corresponding liability was created to repay that money to VBS.

Vele Investments was wound up in July 2018 by a High Court order and was duly represented by the joint liquidators – Richard Pollock, Nurjehan Abdool Gafaar Omar, Oscar Sithole, Ignatius Shirilele and Michelle Schutte.

Makhavhu tried to get the matter postponed, but his application was rejected.

According to the Sunday Tribune, the court found that his reasons for the request for postponement were that he lacked funds to travel from Limpopo to Sandton for inspection of documents.

This, when they were tendered by the joint liquidators, and his legal representative was not available to attend the inspection, as well as the fact that the documents provided were voluminous. 

‘The respondent's (Makhavhu) historic conduct displays a general disregard of time limits set in court rules, orders and directives. Such a conduct is unbecoming of a legal practitioner. In my view, the respondent tactically failed to attend this matter with the earnestness it deserves,’ reads the judgment handed down by Khosa.

Khosa found Makhavhu’s lack of funds and unavailability of preferred counsel could not serve as a basis for a postponement and that he failed to show good cause for the postponement of the hearing of the main application.

‘The respondent (Makhavhu) is liable to repay Vele Investments the 38 payments, totalling to the sum of R6 491 430 to Vele Investments as they are dispositions made for no value to Vele Investments when Vele Investments' liabilities exceeded its assets,’ Khosa ruled.

Makhavhu was also liable for interest on each amount at the rate of between 10.5% and 10.25% per annum to the date of final payment.

Full Sunday Tribune report

Judgment