Louis Liebenberg claims there’s no evidence to support bankruptcy and Ponzi scheme claims

Controversial business personality Louis Liebenberg on Thursday filed court papers to oppose his sequestration by court appointed liquidators. The diamond dealer’s business was ordered into liquidation in April this year by the Mahikeng High Court.

In his affidavit, Liebenberg said that while he has already instructed his attorneys to appeal the liquidation of Tariomix (Pty) Ltd, better known as Forever Diamonds and Gold, Thursday’s affidavit challenged the grounds for his sequestration, labelling the application as part of an “ongoing campaign of harassment and character assassination” by the applicants, the joint provisional liquidators of Tariomix: Hermanus Johannes Vaughn Victor, Johanna Nini Mahanyele, and Caroline Mmakgokolo Ledwaba.

The liquidator-collective alleged that Liebenberg was insolvent and had engaged in fraudulent activities through Tariomix, including operating an unlawful Ponzi scheme.

A significant portion of the affidavit focused on the actions of AE Switch, a third-party e-wallet service provider to Tariomix. Liebenberg alleged that AE Switch’s abrupt termination of services in February 2023, coupled with accusations of dubious activity against his business, had a devastating impact on the company and its clients.

At the time AE Switch said in a statement that it cannot allow criminal activities on its platform. Its chief executive Tiaan Lombard, said: “Louis Liebenberg has already withdrawn hundreds of millions of rands from the platform recently, and in his own words, he has only left a few million with us.” According to AE Switch, “there is nowhere near enough money in any of Liebenberg’s accounts to pay even a fraction of the money he owes his investors. This amount runs into several hundred million.” In short, an accusation of a Ponzi scheme.

Consequently, the e-wallet company froze accounts of investors into Liebenberg’s firm. “AE Switch’s conduct was found to be unlawful, vindicating Tariomix’s position,” Liebenberg wrote and accused the liquidators of deliberately ignoring the facts.

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Liebenberg questioned the motive to liquidate Tariomix in the first place, arguing that the company operated a legitimate business within the diamond industry, acting as a facilitator and financier for licensed diamond transactions. He described Tariomix’s operations as complex.

“Contrary to the applicants’ unsupported assertions, Tariomix operated a legitimate business,” he said and added that no court had upheld the claims that his company operated a fraudulent Ponzi scheme.

He added that there had also been no investigation into Tariomix’s business activities by any authority. “The applicants have not brought this court into their confidence in this application. Their hope – very transparently – is that if they throw enough mud, some will stick,” he said in his affidavit.

They liquidators argued that Tariomix should have been wound up already because the company was insolvent and claimed that Liebenberg had been hiding assets from them. Additionally, they accused him of siphoning off money for personal benefit, gambling away investor funds, and failing to pay his debts. They asserted that his sequestration was necessary to protect creditors and stop ongoing unlawful schemes.

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Liebenberg in turn refuted the claims of bankruptcy, stating that the applicants had not provided any factual evidence to support their allegations. He insisted that he had no creditors and paid his debts as and when they were due, questioning the motivation behind the further sequestration application.

“The applicants place no facts before this court to support such a case. Instead, they make sweeping unsubstantiated statements in the hope to support such a conclusion,” he wrote.

Liebenberg’s affidavit also accused the three liquidators of “improper conduct” including unauthorised raids, media manipulation, attempts to access preserved funds without proper authority. “The applicants (liquidators) have engaged in textbook cherry-picking of facts in an attempt to establish their case,” he said.

Liebenberg also challenged what he said was the lack of evidence of him using company funds to maintain a lavish lifestyle.

In addition, in an email seen by The Citizen, the Masters Office is presently investigating the liquidators for misconduct; it’s called at Section 381 complaint, laid by Liebenberg. It’s an enquiry where the liquidators have to answer for their conduct and, if found wanting, they could face removal from the estate and face civil and criminal charges.

Liebenberg requested the court to dismiss the sequestration application with costs, describing it as an abuse of the court process. “This sequestration application has not been brought in good faith, constitutes an abuse of court process, and should be dismissed with punitive costs,” he said.

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