R77m rescue plan for Africrypt could see Cajee brothers avoid criminal prosecution

In what has been described as a ‘get out of jail free’ card for the Cajee brothers, the liquidators for failed crypto scheme Africrypt say an unnamed investor has proposed stumping up $5 million (around R77 million) for a 51% stake in the company – provided all criminal proceedings against the Cajees are dropped.

Creditors get to vote on the compromise offer on Friday, November 12.

One creditor, who asked not to be named, described it as an “audacious” offer.

As Moneyweb previously reported, Raees and Ameer Cajee, have a history of ‘hacks’ against their various crypto schemes, the first being in May 2019 and then again earlier this year when an amount of about R200 million was allegedly hacked and spirited away.

Though the Cajees have stuck to the hack story, forensic investigators are less sure.

ALSO READ: Rotten luck or dodgy tactics: Alleged crypto scammers in the spotlight again

The compromise offer presented to creditors proposes paying $4 million (R61.6 million) towards the payment of creditor’s claims which are reckoned to amount to about R200 million, and a further $1 million (R15.4 million) as capital for purposes of continuing the business.

The unnamed investor willing to inject $5 million into the business will receive 51% of the shares in Africrypt, with the balance of shares going to creditors pro-rata to the balance of their claims.

The proposal also calls for the hiring of the two Cajee brothers by the company. In addition, it calls for one of the liquidators, Eugene Januarie, to be appointed to the board, alongside an appointee representing the investor.

One of the conditions of the offer is that any criminal charges laid by creditors against the Cajees be dropped, and that they agree to alternative dispute resolution instead.

Ruann Kruger, legal representative for the liquidators, said he did not want to comment on the compromise offer ahead of the Friday meeting with creditors.

One creditor contacted by Moneyweb, who asked not to be named, described the offer as “preposterous”.

“It’s a ‘get out of jail free card’ for the Cajees. Who would invest in a business like this as if it had any credibility or chance of success, other than someone very close to the Cajee family?”

There is still no certainty as to the value of claims against Africrypt, and the figure of R200 million given by the liquidators represents the deposit amounts, not the subsequent value of the cryptos deposited.

Bitcoin is up roughly 200% over the last year, and Ethereum more than 1 000%. It means investors in Africrypt – who were being offered 10% a month – have potentially lost hundreds of millions of rands.

ALSO READ: Crypto market value tops $3 trillion for first time

The offer requires 75% support from creditors to be accepted, at which point it will be made an order of court.

Another creditor told Moneyweb the offer is likely to be accepted by 75% of creditors, as the alternative is to receive nothing.

While creditors will sign away their rights to pursue criminal charges against the Cajees if they vote in favour of the offer, law enforcement authorities and ordinary citizens may take a different view.

The Cajees were living the high life prior to the collapse of their companies and, despite being in their early twenties, appeared to have enough money to purchase several luxury cars and houses – and then boast about it on social media.

“This proposed compromise certainly comes at a convenient time considering the current prices of Bitcoin and Ethereum,” says attorney Darren Hanekom, who is representing a number of creditors.

“We trust that the general body of creditors will make the right decision when the proposal is tabled for a vote,” he adds.

NOW READ: South African brothers allegedly steal R54bn in biggest crypto scam ever

---

By Ciaran Ryan

This article first appeared on Moneyweb and was republished with permission. Read the original article here.