The Western Cape High Court has granted a provisional sequestration order against a Cape Town businessman after finding that he failed to satisfy a nearly R6m judgment debt owed to Fleet Africa, a fleet management and leasing unit of JSE-listed Super Group.

IoL reports that the court also raised concerns about transactions involving assets transferred to a company linked to the businessman’s son, saying it warranted further investigation by a trustee.

In a judgment handed down this month, Acting Judge Van Zyl ruled in favour of Fleet Africa following years of litigation linked to a vehicle lease agreement.

The dispute before the court dates back to 2016, when MK Exotics leased vehicles from Fleet Africa and businessman Mahmood Khatib signed surety for the agreement.

After MK Exotics defaulted, Fleet Africa pursued claims of almost R6m. The matter eventually went to arbitration. The arbitrator awarded Fleet Africa R5.99m in November 2022, with the award later made an order of court in January 2024.

A writ of execution was issued against Khatib in April 2024 and movable assets, including household items and four vehicles, were attached.

However, Khatib’s son later claimed ownership of one vehicle and said the other three belonged to a company called SA Destination Management Company (SADMC), where he was sole director.

The son also claimed SADMC had bought Khatib’s home and its contents in May 2024, with transfer taking place in July that year.

According to the judgment, Khatib later informed the sheriff he owned no movable or immovable assets and could not satisfy the debt.

According to IoL court found this amounted to an act of insolvency under the Insolvency Act.

Van Zyl said there was reason to believe sequestration could benefit creditors because further investigation might uncover assets or transactions that warranted scrutiny.

The judgment noted that SADMC was established after summons had already been issued against Khatib and questioned how the company operated, given the son was a student at the time.

The court said ‘one requires little imagination to realise that all of this may well be a sham, and that SADMC was established so that the first respondent could avoid owning assets in his own name’. 

The judge said the matter warranted investigation by a trustee under insolvency proceedings.

The provisional sequestration order will return to court in August, when interested parties will have an opportunity to argue why a final sequestration order should not be granted.

Full IoL report