Some BHI Trust investors served with letters of demand

Investors who benefitted from BHI Trust in its last six months before it was sequestrated, must now pay back the money.

This is after they were served with letters of demand, about eight months after its founder, Craig Warriner, handed himself over to the police and confessed that he ran it like a Ponzi scheme.

About 2,000 investors lost about R3 billion they invested in BHI Trust that Warriner (60), instead of investing, used to pay interest to earlier investors. He was sentenced to 25 years for fraud in the Palm Ridge Commercial Crimes Court after concluding a plea deal.

The Financial Sector Conduct Authority (FSCA) also barred him for 30 years after investigating the conduct of the BHI Trust and Warriner between 7 February 2013 and 30 September 2023.

The joint trustees of the BHI Trust, in sequestration, Sumaya Mohammed Ali and Gert de Wet, started issuing letters of demand to relevant parties that benefited in the six months before the trust was provisionally sequestrated on 25 October 2023.

The letters were sent after the second creditors meeting on 12 June 2024 where the creditors adopted resolutions and accepted 812 presented claims totalling some R1.5 billion. 

ALSO READ: BHI Trust: Family says Craig Warriner’s Ponzi destroyed them

Letters according to the Insolvency Act

According to Section 29 of the Insolvency Act, which refers to dispositions, the trustees must take action against entities that benefitted from the BHI Trust, during the six month time period before the Trust was placed into sequestration.

In a statement, the trustees say they appointed the firm W S Badenhorst Attorneys to issue the letters of demand to entities that received benefits between 25 April 2023 and 25 October 2023 to endeavour to minimise the legal costs that can accumulate in court proceedings.

The trustees appeal to beneficiaries who receive letters of demand to contact the Attorneys. This legal action is part of the trustees’ fiduciary duty to manage the affairs of the trust according to the Act.

Section 29(1) of the Insolvency Act provides that any property transfer by a debtor made less than six months before their assets are seized can be reversed if such a transfer unfairly favoured one creditor over others.

ALSO READ: FSCA bans Craig Warriner from BHI Trust for 30 years

What this means for BHI Trust investors

This means if some of the investors were paid out and received any benefit whatsoever (including capital and interest) in the six months before BHI Trust was sequestrated, while other investors could not get their invested funds paid out, all benefits made must be returned to the trust.

Warriner founded and managed BHI Trust and lived a high life, rubbing shoulders with the elite of Johannesburg. He was also the former chair of the Old Boys’ Association of St Stithians College. This was a far cry from the man who appeared in court wearing a black T-shirt and sleeveless jersey.

He pleaded guilty to 207 counts of fraud, corruption and practising without a financial services provider license in violation of the Financial Advisory and Intermediary Services Act. Evidence in court showed Warriner used less than 20% of the funds invested in BHI Trust for legitimate trading.

Warriner was sentenced to 15 years for each of 38 counts (570 years) but these will run concurrently. For the remaining counts except count 207, he was sentenced to another 15 years of which he will serve 10 years concurrently with the first sentence. He was also sentenced to 10 years on count 207 which will also be served concurrently with the first and second sentences.

ALSO READ: BHI Trust: provisional trustees trying to find and recover missing funds

Two more arrests in the BHI Trust case

Earlier this month, the Hawks Serious Commercial Crime Investigation Unit arrested Sona Pillay (54) and Michael Philip Adam Haldane (55) who are implicated in the BHI Trust case.

According to a police statement, Pillay was arrested on Friday, 31 May 2024, after he attempted to flee overseas where he was refused entry and sent back to South Africa where he found the Hawks’ investigating team waiting for him at the OR Tambo International Airport.

Haldane handed himself over to police on the morning of 3 June 2024. Pillay and Adam then appeared in the Palm Ridge Specialised Commercial Crimes Court sitting in Palm Ridge Magistrates Court. They were granted bail of R100 000 each on 10 June.

It is expected that more individuals will be arrested in this case.