R160m fraud: NGO’s, mosques & religious organisations set to lose millions in investments, dividends

The Citizen has learned that a number of non-governmental organisations (NGO), places of worship including mosques, religious organisations and individuals who invested in Amaanat Investment Holdings (AIH) stand to lose millions of rand in returns and dividends.

This after a father and son allegedly stole R160 million from the investment company through fraudulent and unauthorised payments.

Over the past few weeks, The Citizen has reported how the money was allegedly stolen by the former chief executive officer (CEO) and board member, 68-year-old Hussun Abdool Khalek (HAK) Omar and his 41-year-old son, Mahomed Hussun Omar, who was a company director at the time.

ALSO READ: R160m fraud: Father, son allegedly stole millions from investment company – Report

A forensics report by Integrated Forensic Accounting Services revealed that a significant portion of the millions of rand were utilised by HAK Omar for his personal benefit and gain.

According to the forensic report, the matter dealt exclusively with the allegations of improper and unauthorised payments classified as share issue expenses, of which a substantial amount was allegedly misappropriated by HAK Omar.

It also revealed expenses totalling R160 million were debited against Stated Capital over a period of approximately 10 years.

Related payments were also made by Amaanat Investment Holdings to either the Kreston or the Kreston Agency account.

While the forensics report found the accounting records maintained by Kreston on behalf of AIH were inadequate and improper, the circular to the AIH board members and shareholders expounded on the alleged corruption.

It stated the loot was also paid into the Mahomedy, Omar Paruk Agency account, and other related accounts which were controlled exclusively by HAK Omar.

Integrated Forensic Accounting Services also said AIH should consider registering a criminal complaint with the South African Police Services (Saps), seeking further police investigation into the alleged fraud and corruption by HAK Omar.

It is unclear if the blatant fraud by the father and son has been reported to police, but Mahomed Hussun Omar told The Citizen his father and himself have met with their lawyers to discuss the allegations.

The father and son’s lawyer was unreachable after numerous attempts by The Citizen to contact them.

Following the resignation of HAK Omar and Mahomed Hussun Omar from the company, The Citizen also reported that at least 10 other AIH directors are also expected to resign.

It is unclear what the reasons are for the mass resignations of the directors are, or if it is related to the alleged theft of millions of rand by the father and son duo which has sent ripples through the investment market.

AIH has since issued a notice of a special general meeting (SGM) on 1 April to the shareholders of the company with the main purpose being to note the resignations of certain directors who have indicated their intention to resign, with effect from when the SGM closes, and to appoint 10 new directors.

A person familiar with the matter confirmed to The Citizen, the rot of Hussun Abdool Khalek Omar and Mohamed Omar’s devious actions are likely to have far-reaching and consequences and implications for many Muslims and other organizations affecting their returns and direct value of their investments in AIH.

He said the value of AIH is worth an estimated R4.5 billion with millions being invested in the company.

“A value of what they invested will be largely depleted as a result of all of the shenanigans there, and that value could be affected and I am talking about now all shareholders value could be affected by anything between 25% and 50% (sic).”

The source said mosques, NGO’s and religious organisations invested millions in AIH and are expected to lose a substantial amount of their investments.

This return of investment he said is used for the maintenance of the mosques and staff salaries among other expenses, while the NGO’s use the return of investments and dividends for humanitarian projects.

“They had a lot more than five million invested. Millions that could be lost by NGO’s and religious institutions from two perspectives. The investors were getting paid a dividend of R26 a quarter two years ago which gives you a R104 a year. Currently, that is going to be reduced by between sixty and seventy percent.

That’s the first problem. So, those institutions that were having some ideas about receiving this return to run their organisations, pay salaries etc, they are not going to have those funds to do anything with.”

“The second problem is if they paid R1 million to invest in this company, one million is no longer worth one million, the question is, what is it worth?

“The assessment has not been done to understand what the actual value is, but most certainly there is going to be reduction in that value of anything up to 25% of that value, maybe more,” said the source.

With the current economic climate, rising interest rates and spike in petrol prices, the severity of the impacted organisations is expected to be catastrophic.

The source said that besides the NGO’s, religious organisations and places of worship, many others have also been impacted by the alleged theft by HAK and Mahomed Omar which has put a stigma on investment companies.

ALSO READ: R160m fraud: 10 directors set to resign after father and son allegedly stole millions from investment company