Dr DS Grieve Special Insolvency Inquiry Part 5 - 3 August 2010

Web Address: http://mysite.mweb.co.za/residents/pak06278
RealTime Transcriptions
64 10th
Avenue, Highlands North, Johannesburg
P O Box 721, Highlands North, 2037
Tel: 011-440-3647 Fax: 011-440-9119 Cell: 083 273-5335
E-mail: realtime@pixie.co.za
TRANSCRIPTION OF THE
INSOLVENCY INQUIRY
IN TERMS OF SECTION 417, 418 OF THE COMPANIES ACT
INTO THE AFFAIRS OF THE INSOLVENT ESTATE OF
DRS DS GRIEVES BRIDGING SOLUTIONS
(PTY) LIMITED
(IN LIQUIDATION)
MASTERS REFERENCE T0240/10
BEFORE
MS R BEKKER
HELD ON
03 AUGUST 2010 PAGES 1 TO 93
HELD AT
BOWMAN GILFILLAN, WEST STREET, SANDTON

3rd August 2010 Drs DS Grieves Bridging Solutions (Pty) Ltd (in Liquidation) Inquiry
Tel: 011 021 6457 Fax: 011 440 9119 RealTime Transcriptions Email: realtime@pixie.co.za
Page 1
1 [PROCEEDINGS ON 3 AUGUST 2010]
2 COMMISSIONER: Thank you very much. We
3 are on record. Today is the 3rd of August 2010. We are
4 commencing our inquiry in terms of Section 417, 418 of the
5 Companies Act in the matter of Drs DS Grieves Bridging
6 Solutions (Pty) Limited (in liquidation). Master’s
7 reference number T203/2010. I am going to ask Mr Haroon
8 Laher from Bowman Gilfillan to place himself on record and
9 then we will go around the table thank you.
10 MR LAHER: Yes thank you very much, Madam
11 Commissioner, my name is Haroon Laher. I am conducting
12 this inquiry in the name of the liquidators of the
13 insolvent company Drs DS Grieve Bridging Solutions
14 (Proprietary) Limited (in liquidation). The Master’s
15 reference is T0240/10. Also present in the room, this
16 morning, as we commence is my assistant Bianca Masterton
17 and on my right is Attorney Willem Storm, representing the
18 director of the insolvent company, Mr David Grieve. The
19 name in the insolvent company, “Dr DS Grieve” represents
20 his full names and initials. I also have a vac student
21 from Rhodes University, Robin, who will be sitting through
22 these proceedings. And across me we have Attorney Adrian
23 Engelbrecht, who is representing a witness Mr Paul Marais.
24 COMMISSIONER: Thank you for that. Can I
25 proceed to place Mr Marais under oath?
Page 2
1 MR LAHER: Thank you, you may.
2 COMMISSIONER: Mr Engelbrecht is there
3 anything in limine before we start?
4 MR ENGELBRECHT: No.
5 COMMISSIONER: No?
6 MR PAUL MARAIS [d.s.s.]
7 COMMISSIONER: Please proceed.
8 MR LAHER: Madam Commissioner, I am just
9 wondering if we shouldn’t rewind it and just check that the
10 recording is quite clear.
11 COMMISSIONER: We can do that. Thank
12 you, let’s proceed. Mr Dewald Breytenbach is present he is
13 one of (inaudible) today, thank you very much. Please
14 proceed.
15 MR LAHER: Thank you, Madam Commissioner.
16 Mr Marais, you received a subpoena requiring your
17 attendance. And in that subpoena you were required to
18 bring along certain documents. I just want to go through
19 that schedule. You have got a copy of that subpoena in
20 front of you. It is the very last page of the subpoena.
21 There is a list of documents that were attached. Item
22 number 1 is a written Loan Agreement that was entered into
23 between Presidium and M&M Fundprop (Proprietary) Limited
24 and M&M Fundprop (Proprietary) Limited, is your company?
25 MR MARAIS: That’s right.
Page 3
1 MR LAHER: That agreement was concluded
2 on the 11th of September, in terms of which Presidium lent
3 and advanced an amount of R13 700 000.00 to M&M?
4 MR MARAIS: That is right.
5 MR LAHER: Do you have a copy of that
6 agreement? It is in those files that Presidium gave you.
7 Madam Commissioner, what Mr Marais is referring to is
8 something that I will deal with as soon as we are finished
9 with Mr Marais, is, in total three people were subpoenaed
10 for the inquiry today. One of them is a representative of
11 Presidium. The representative is based in Cape Town. We
12 had, in engagements with the attorneys of record of
13 Presidium, Edward Nathan Sonnenbergs, through their Cape
14 Town office, come to an arrangement whereby the documents
15 were provided to us and received this morning by overnight
16 courier. And the witness in question was excused from
17 attendance today, on the basis that the witness will attend
18 the adjourned proceedings, save and except for a particular
19 period where the attorney had indicated their
20 unavailability and that has become somewhat of an error,
21 because of the date of the inquiry, where you postponed.
22 COMMISSIONER: That is fine. Thank you.
23 MR LAHER: Mr Marais, the second document
24 was the written Sale and Assignment of Claim Agreement
25 between M&M and the insolvent company, in terms of which
Page 4
1 the insolvent company disposed of certain right, title and
2 interest in and to certain claims to M&M for a purchase
3 price of R13 700 000.00, which is the equivalent price of
4 the loan that was advanced by Presidium to your company, is
5 that correct? Do you have a copy of that?
6 MR MARAIS: Also in those files.
7 MR LAHER: Item number 3 is a list of the
8 debtors or the claims was sold and assigned by the
9 insolvent company to M&M. Do you have a list of those
10 debtors that form the subject matter of that agreement?
11 MR MARAIS: I do.
12 COMMISSIONER: Thank you for that.
13 MR LAHER: Madam Commissioner, what we
14 have is, for record purposes, an e-mail that was addressed
15 by Paul Marais on the 31st of August 2009 to David Grieve
16 and St John Banjee. Mr Marais, who is St John Banjee?
17 MR MARAIS: He is the representative of
18 Presidium, the fund manager.
19 MR LAHER: And the e-mail is headed,
20 “final offer for your book”, with your permission, Madam
21 Commissioner, if I may mark this as Exhibit A?
22 COMMISSIONER: That is fine. Thank you,
23 you can mark it. It can be part of the bundle we can mark
24 it A1.
25 MR LAHER: Mr Marais, I haven’t had a

Page 5
1 chance to go through this very carefully, except when you
2 showed it to me just before these proceedings started. But
3 just on a quick summary, there’s a list of nine debtors on
4 this piece of paper.
5 MR MARAIS: Correct.
6 MR LAHER: Are those the nine debtors
7 that you acquire in terms of the Sale and Assignment
8 Agreement?
10 MR LAHER: And the purchase price of
11 these debtors was R13 700 000.00?
12 MR MARAIS: That’s correct.
13 MR LAHER: And the value of each debt
14 outstanding as at the time you acquired and took cession of
15 the rights of those debtors is reflected next to the name
16 of each debtor in points 1 to 9?
18 MR LAHER: And you are involved, as we
19 speak at the moment, in a process for the collection of
20 these debtors?
21 MR MARAIS: The operative word is,
22 “trying to collect”.
23 MR LAHER: We will get to that in
24 engagements, Madam Commissioner. I just want to place on
25 record that Mr Engelbrecht has offered his assistance in
Page 6
1 relation to the debtors and determination of the status of
2 the collection of each of these debtors.
3 COMMISSIONER: Thank you for that.
4 MR LAHER: Mr Marais, the next item on
5 the list of documents was, “forensic reports in respect of
6 the insolvent company”.
7 MR MARAIS: I do not have that, because I
8 never received it. I was not part of the forensic report
9 or the forensic investigation.
10 MR LAHER: Can you tell the Commissioner
11 more about this forensic report and what?
12 MR MARAIS: What happened there is I
13 think Presidium after realising what Dave Grieve has done
14 and that he did not repay a few loans, they asked a
15 forensic auditor, I think the guy’s name was Jaco Spies.
16 They appointed him to conduct a forensic audit of the book
17 and also exactly the status of repayment and the monies
18 being repaid to Dr Dave Grieve Bridging. I think he
19 realised after his forensic report that approximately R4
20 million was lost and misappropriated by Dr Dave Grieve.
21 That particular auditor, however, was a forensic auditor,
22 but he was not a developer or did not understand property
23 (inaudible) of property development itself. Or for that
24 matter bridging finance transactions. Presidium asked me
25 to go and look at it and I looked at the files and I wrote
Page 7
1 a report, which is the e-mail I have got here back to
2 Presidium and just gave them my quick summary of what my
3 investigation, which took about two days, found after I
4 read some of the reports of Jaco Spies. But I do not have
5 a full forensic report, which was given to Presidium and I
6 engaged twice with Jaco Spies just to get some of the files
7 that was my involvement with the forensic auditing of the
8 books.
9 MR LAHER: So can I safely assume that
10 the forensic report should be included in this bundle of
11 documents that we have received from Presidium?
12 MR MARAIS: Ja.
13 MR LAHER: Just tell us more about these
14 debtors now? What’s your experience as regards the
15 collectability or otherwise of these debtors?
16 MR MARAIS: Can I read this?
17 COMMISSIONER: Yes, of course you may
18 read –
19 MR LAHER: No just generally. We
20 probably will take that as an exhibit as well, but just sum
21 it up quickly?
22 MR MARAIS: On the 11th of June 2009 after
23 I had spoken to Jaco Spies, I wrote this report to Roanne
24 and Singent both representatives of Presidium. And I said,
25 “Hi Roanne, Singent, I have just had my last meeting and
Page 8
1 feedback with Dave Grieve, what a compulsive liar. The
2 situation is as follows” and I just gave them the book.
3 And I said, “legal investigation. His legal documentation
4 is shocking to say the least. Some places where personal
5 sureties should have been signed were never signed.
6 Initials at the bottom from borrowers sometimes not there,
7 domiciliums of clients left out. His legal’s for his
8 underlying securities all based on letter of undertakings,
9 which can be cancelled at any time. He basically has no
10 hard security for the principle debt. It will be hard to
11 enforce and client and smart lawyers can keep you busy for
12 some time.” I think that basically sums up his legal
13 documentation.
14 MR LAHER: What have you collected in
15 respect of these debtors?
16 MR MARAIS: Of the R13.7 million, which
17 we bought of the nine clients, we basically spent about R1
18 million in further advances to protect the assets. And
19 about R380 000.00 on legal fees and about R1 million on
20 interest payments to Presidium for the facility that brings
21 you back to a sales price of about R16.8 around there. Of
22 that R16.8 up till now I received, we bought or we took
23 over one flat of R600 000.00 and that is the basis of our
24 collection in the past nine months – ten months. And
25 Adrian is busy with the legal process with other debtors.

Page 9
1 If I can go through the debtors? Do you want me to go
2 through the debtors?
3 MR LAHER: Before we get there, I mean,
4 you must understand that Madam Commissioner is in the dark.
5 MR MARAIS: Okay.
6 MR LAHER: And she needs to understand
7 how is it that you got involved with these debtors, as I
8 understand, not having had the advantage of going through
9 the documents in that much detail. Presidium advanced, and
10 please correct me where I am wrong, Presidium advanced a
11 facility to the insolvent company, am I correct? That
12 facility was secured by a cession of the debtors?
14 MR LAHER: When the insolvent company
15 defaulted on its obligations to Presidium on the repayment
16 of those loan facilities, the forensic team was sent in to
17 investigate what was happening within the organisation
18 being the insolvent company. And in particular what the
19 status was of those debtors?
21 MR LAHER: The forensic team then
22 submitted a report to Presidium on the debtors? As you say
23 that the forensic team, not being well attuned with
24 property matters, gave some credence to the level of these
25 debtors?
Page 10
1 MR MARAIS: Yes.
2 MR LAHER: And it appears from there that
3 you then engaged in a transaction with Presidium?
5 MR LAHER: Now can you just explain to
6 Madam Commissioner how you understood that transaction
7 between you and Presidium?
8 MR MARAIS: The normal, I am in the
9 business to buy the said debt, assessed properties on
10 liquidations and debtors’ books. I looked at the files and
11 I said, I actually looked at nine debtors and I said those
12 are the debtors I feel comfortable that there is more than
13 a 30% chance to recover some of the debt. Then I looked at
14 the files, just to look at the investigation and the
15 paperwork. And I spoke to Singent and spoke to David
16 Grieve and I said I will buy those nine debtors from you.
17 Subsequently I received a facility from Singent of
18 Presidium for 13.7 I bought that. And that 13.7 was
19 deducted from the exposure of David Grieve to Presidium.
20 The loan facility from Presidium to ourselves was based on
21 exactly the same principle as the loan facility from
22 Presidium to David Grieve and that is there is a loan into
23 the company. And your security for that loan is basically
24 your debtors’ book and your personal surety and your
25 company surety.
Page 11
1 MR LAHER: In other words, you stepped
2 into the shoes of Presidium?
3 MR MARAIS: No, I stepped in to the shoes
4 of David Grieve, because Presidium was my creditor.
5 MR LAHER: Sorry. You stepped into the
6 shoes of the insolvent company?
8 MR LAHER: Took over the insolvent
9 company’s obligations to Presidium and took, in lieu of the
10 debt that you acquired, took over Presidium security in the
11 cession over the debtors?
13 MR LAHER: You spoke that you had in
14 front of you a list of the debtors and the current status.
15 What is the date of that communication?
16 MR MARAIS: That was the 11th of June
17 2009.
18 MR LAHER: Are you able to report any
19 progress since that date on the collection of the debtors
20 or is the status no different from what is reported in that
21 communication?
22 MR MARAIS: 95% of the cases are in the
23 legal process right now, being liquidated and sequestrated.
24 [Interruption in recording.]
25 COMMISSIONER: Thank you very much for
Page 12
1 that, let’s proceed. You were laughing, Mr Marais, you say
2 you are an optimist?
3 MR MARAIS: The hopes of recovering is
4 your guess is as good as mine. It is basically going
5 through the legal process now and after liquidation, as you
6 guys know, you have to go through the same inquiry and the
7 same process of looking at the assets, the underlying
8 assets, what the guys have and also collecting a personal
9 surety. If they have assets you are lucky. If they don’t
10 have assets it is a done deal.
11 MR LAHER: Madam Commissioner, I think
12 except for the handing up of that June communication – how
13 many pages is that? Pages marked A2 and A3.
14 COMMISSIONER: That is fine, thank you.
15 MR LAHER: I have no further questions
16 for Mr Marais. Except that I think Mr Marais must be
17 warned. I have an arrangement with his attorney that to
18 the extent that he will not be required, we will notify him
19 -
20 COMMISSIONER: Perfect.
21 MR LAHER: As well in advance as
22 possible, after going through these documents.
23 COMMISSIONER: That’s fine. Thank you
24 for that. Do you have anything in re-examination Mr
25 Engelbrecht?

Page 13
1 MR ENGELBRECHT: Nothing.
2 COMMISSIONER: Okay thank you. Mr
3 Marais, thank you very much for your attendance and your
4 patience. I am going to warn you for the 1st and the 2nd of
5 November 2010 9:30 same premises. We will liaise with Mr
6 Engelbrecht and we will make a plan for accommodation.
7 Thank you for that gentlemen you may be excused.
8 [INQUIRY ADJOURNS INQUIRY RESUMES]
9 COMMISSIONER: Let me place on record
10 that creditors have now joined us. Just for the record and
11 for housekeeping let’s just get the creditors’ names
12 please. Sir, your name please?
13 MR FOURIE: I am Dawid Fourie.
14 COMMISSIONER: Okay.
15 MS FOURIE: My name is Rosa Fourie.
16 COMMISSIONER: Thank you.
17 MR AARDENDORF: Hans Aardendorf.
18 MR BESTER: Louis Bester.
19 COMMISSIONER: Thank you very much.
20 Okay, let’s proceed. Dr Grieve or let me just ask, Mr
21 Fourie is there anything in limine before you proceed?
22 MR FOURIE: No.
23 COMMISSIONER: Okay. Dr Grieve are you
24 comfortable in giving your evidence in English?
25 DR GRIEVE: Ja.
Page 14
1 COMMISSIONER: Full names please?
2 DAVID STEPHEN GRIEVE [d.s.s.]
4 May I just for record and for clarification purpose give
5 [cell phone interference] terminology, I think we can refer
6 to the witness as, “Dr Grieve” and to the insolvent company
7 as “the Grieve Company” if that is okay with everybody.
8 When we talk about the company we call it the Grieve
9 Company and when we talk about Dr Grieve, we will talk
10 about Dr Grieve, simply because the name is reflected in
11 the corporate entity.
12 COMMISSIONER: A good idea thank you very
13 much.
14 MR LAHER: Dr Grieve, you are a medical
15 doctor by qualification, is that correct?
16 DR GRIEVE: Yes.
17 MR LAHER: When did you qualify and where
18 did you qualify?
19 DR GRIEVE: I qualified in 96 and the
20 University of Pretoria, Tukkies.
21 MR LAHER: Did you practice as a medical
22 practitioner?
23 DR GRIEVE: Yes, I did.
24 MR LAHER: For how long?
25 DR GRIEVE: For quite a while about six
Page 15
1 or seven years. And I went into business after that and
2 occasionally I would still help people out as locum.
3 MR LAHER: When you practised as a
4 medical practitioner did you practice for your own account?
5 Or did you practice at a hospital or a clinic?
6 DR GRIEVE: A little bit of both.
7 Initially I worked at One Military Hospital then I went
8 into private practice for my own account.
9 MR LAHER: When did you start business?
10 DR GRIEVE: Medical business or the?
11 MR LAHER: Anything non medically
12 related?
13 DR GRIEVE: Non medically related that
14 would be about 2002.
15 MR LAHER: And what was that?
16 DR GRIEVE: I started to build spec
17 houses, as well as in the process of that, one of the
18 attorneys introduced me to bridging finance, where we
19 started to do bridging finance as well.
20 MR LAHER: So you initially ventured in
21 the property development market?
22 DR GRIEVE: Ja.
23 MR LAHER: And how many of those property
24 developments did you complete?
25 DR GRIEVE: Up to today? I couldn’t give
Page 16
1 an exact number, probably about 50.
2 MR LAHER: The various sizes of those
3 developments?
4 DR GRIEVE: Only small. We did a few
5 small township developments, subdivisions of stands, things
6 like that. And then obviously we built a couple of houses.
7 Some of them were larger houses, some of them being small
8 houses, but to put an exact rand value on it, I am going to
9 struggle to do that.
10 MR LAHER: And when did you become
11 interested in the bridging finance business?
12 DR GRIEVE: Well Attorney Bert Smith, who
13 is a friend of mine, and one of the properties that sold
14 there was a bit of money lying in his trust and he had a
15 client needing bridging and he said would you be interested
16 in doing something like this. And I said yes, why not.
17 And I did one by accident like that and another and
18 another. And I think from 2002 we did the ad hoc for his
19 firm and it just grew from there and we ventured into other
20 firms from there.
21 MR LAHER: Now I think I may understand
22 what bridging finance is and I think I am not even sure if
23 that understanding is correct. But can you tell the Madam
24 Commissioner what bridging finance is and what it entailed?
25 DR GRIEVE: I will do my best to keep it

Page 17
1 accurate and short. But typically if somebody has a
2 property and he has some debt on it. Let’s say he has a
3 house and just as an example, it is the easiest way to try
4 and explain it. He owes the bank, say, R500 000.00 and he
5 has just sold it for R1 million to somebody else that guy’s
6 finance is in place. Now the guy selling the house needs
7 that money very quickly and due to our country’s
8 bureaucracies it can take three months easily for a
9 transfer like that to happen. So what we would typically
10 do is we would buy the proceeds of the profit portion. So
11 he was due 500 profit and 500 would go to the bank. So we
12 would say okay we will buy that 500 from you, but we will
13 probably buy it at about R450 000.00 or something like
14 that, depending on [background noise].
15 And we would advance him the money and then we
16 would wait for the transfer to take place. So then the
17 attorneys would typically settle us. That is one example.
18 Another example –
19 MR LAHER: Sorry, let’s just stop with
20 that one example.
21 DR GRIEVE: Ja.
22 MR LAHER: That type of transaction is
23 almost secure?
24 DR GRIEVE: Ja.
25 MR LAHER: It is backed up against a
Page 18
1 guarantee from the conveyancing attorney that on
2 registration of transfer, you will receive R500 000.00 the
3 surplus after the settlement of the bond?
4 DR GRIEVE: That’s correct. A letter of
5 undertaking we normally get from those firms.
6 MR LAHER: Yes.
7 DR GRIEVE: The second scenario would be
8 the same client owes 500 on a house. There is equity
9 available. He goes to the bank, asks for a second bond,
10 because he needs money for something. And they grant him
11 an additional facility of 400 or 500 or whatever it is and
12 when we have some sort of letter from the attorneys saying
13 that this has been approved and will be paying out at some
14 stage, we are willing to buy those proceeds as well. So it
15 would not only be a sale proceed, but we would also do a
16 bond proceed. And then –
17 MR LAHER: Then again that is also
18 secure?
19 DR GRIEVE: Ja.
20 MR LAHER: So the transaction that you
21 would be bridge in respect of that second bond would be
22 settled the moment the second bond is registered and the
23 proceeds are released by the second bondholder?
24 DR GRIEVE: That’s correct, ja.
25 MR LAHER: Are there any other types of
Page 19
1 bridging finance that you are engaged in?
2 DR GRIEVE: Yes. Typically rates and
3 taxes, but those would be very much smaller amounts where
4 somebody has now sold that property. They don’t even have
5 the cash flow to settle the rates and taxes, which are in
6 arrears. And then we would advance, also, on the basis of
7 the money that is coming in from the bond, from the buyer.
8 So it is very much the same as the first scenario, but it
9 happens to be for rates and taxes and not necessarily for
10 the client’s pocket, per se.
11 MR LAHER: And again the proceeds are
12 secure?
13 DR GRIEVE: Ja. And then we had a couple
14 of developers as well, they had finished the build and they
15 would also have sale agreements in place with some letters
16 of undertaking, exactly the same thing, but they might have
17 had more than one unit. They might have had multiple units
18 that they had various guarantees from different buyers in
19 place. And then we would buy the proceeds as well.
20 MR LAHER: And again that would be
21 secure, based on the letter of undertaking that you got on
22 the committed sale?
23 DR GRIEVE: Yes.
24 MR LAHER: So where was the risk in this
25 business?
Page 20
1 DR GRIEVE: The risk? Hindsight is very
2 easy, so the risk was if you ended up with a dubious or a
3 dodgy, if I can use such a term, attorney that gives you an
4 undertaking and then reneges on that undertaking.
5 MR LAHER: As long as you exclude the
6 present company you can use that.
7 DR GRIEVE: No, that’s fine. And that
8 would be a risk. And a risk would be insolvency or a
9 sequestration during a transaction, would be a risk. We
10 actually had one such one at the beginning of last year,
11 but we even managed to get some of the funds out of that
12 transaction, but that is also a risk and a debt during such
13 a transaction. It would be a potential risk.
14 MR LAHER: And death or insolvency would
15 be a risk to the extent that the transaction does not
16 proceed after death or insolvency?
17 DR GRIEVE: Yes.
18 MR LAHER: In the meanwhile you have
19 advanced the money, based on the transaction taking place?
20 DR GRIEVE: Ja.
21 MR LAHER: And how many of such
22 transactions did you come across in the years of your
23 business?
24 DR GRIEVE: I just want to clarify. You
25 mean those that didn’t go through?

Page 21
1 MR LAHER: Yes.
2 DR GRIEVE: In the years of my business
3 very very few initially. But in the last year we did pick
4 up a bit of stress or strain. And towards the end of last
5 year, there was a big crash in the property market and the
6 result speaks for itself, it put a lot of pressure on a lot
7 of people in the same business as what I was doing.
8 MR LAHER: We are going to come to that,
9 the latter part of the business before.
10 DR GRIEVE: Prior to 2009, I want to go
11 as far as to say that there was no bad debts on my books.
12 MR LAHER: What period of 2009,
13 middle/early 2009?
14 DR GRIEVE: No.
15 MR LAHER: 2008.
16 DR GRIEVE: I would like to correct that
17 for the record, sorry, until the end of 2008 I can quite
18 confidently say for many years there had been no bad debts
19 in the book at all.
20 MR LAHER: This was a very secure
21 business?
22 DR GRIEVE: Ja, I was very confident in
23 the business until the end of 2008 and then obviously
24 during 2009 we picked up our first insolvency, we managed
25 to get that money out and then much later on in the year we
Page 22
1 picked up a few hassles.
2 MR LAHER: But can you tell the
3 Commissioner the level of those problems, the financial
4 dips, the SARS things?
5 DR GRIEVE: Sure. I could do so very
6 accurately if I still had the records that somebody had
7 taken from my offices. But just one example of such would
8 be a firm called Ebersohn and Grobler, who brought four
9 transactions to me with good letters of undertaking. And
10 we are talking about R5 million just there at the end of
11 last year, where these guys literally lied to me, the firm.
12 MR LAHER: Give me more information on
13 the transactions?
14 DR GRIEVE: Supposedly, typical,
15 presented to me as typical bridging transactions. I was
16 informed that there –
17 MR LAHER: At a purchase level or at a
18 bond level?
19 DR GRIEVE: [Cell phone interference] I
20 would have to find those records to give you the exact, but
21 it was a bit of both, some bonds, some purchases. And each
22 one of those was about 750 – 800 each and obviously there
23 is an interest, discounting factored in, we are talking
24 about just over R4 million that that one firm hurt me with.
25 MR LAHER: And what happened to your
Page 23
1 attempts to try and recover that money?
2 DR GRIEVE: The attempts that I have
3 tried to recover that money, I will have to say, as far as
4 I know, I have a letter where the Law Society of South
5 Africa had removed that firm from the Registrar. I am not
6 sure if that is still the case, but they were removed and
7 I handed them over to an attorney’s firm, Tim du Toit and
8 obviously at the end of last year, I could not afford to
9 pay Tim du Toit any further. So those files are still
10 lying on their table and I do not have any further access
11 to them.
12 MR LAHER: Let’s try and focus a little
13 on the capitalisation of the company, of the Grieve
14 Company. How did you capitalise the company when you
15 started?
16 DR GRIEVE: Initially with my own funds
17 and then I took some bonds on some of my properties and put
18 that in as well. And then it got to a point where I was
19 running a bit low and I spoke to a couple of my friends and
20 some of them were willing to put some money up for me as
21 well.
22 MR LAHER: What do you mean “running
23 low”? Is it that the business was growing at such a rapid
24 rate that you needed more capital injection?
25 DR GRIEVE: Exactly.
Page 24
1 MR LAHER: And you approached your
2 friends for that injection?
3 DR GRIEVE: Yes.
4 MR LAHER: Of capital?
5 DR GRIEVE: Ja.
6 MR LAHER: And I assume that some of the
7 friends that you are referring to are people sitting around
8 the table?
9 DR GRIEVE: Indeed.
10 MR LAHER: And the business then grew
11 even further?
12 DR GRIEVE: Yes.
13 MR LAHER: And tell me a little about
14 Presidium, the structure, finance fund and the involvement
15 of the Grieve Company with that entity?
16 DR GRIEVE: Well we had grown to a fairly
17 decent size and things were still going well and markets
18 were going positive on all the bridging houses that were
19 doing similar business to myself. Property was still going
20 up and these guys were sitting with money and they were
21 willing to offer it as a form of funding and we entered
22 into negotiations and they offered me funding.
23 MR LAHER: When did the agreement
24 commence for that funding?
25 DR GRIEVE: I cannot give you an exact

Page 25
1 date. I don’t know you guys may be able to answer that
2 better, because you will have a copy of those records, but
3 it was in the middle of 2008, somewhere, I can’t give you
4 the exact date I can’t recall.
5 MR LAHER: And what did you see as the
6 purpose of that funding?
7 DR GRIEVE: To grow my book substantially
8 more. And also the opportunity to, as we grow, walk with
9 the Presidium Strategy Finance Fund to hopefully grow and
10 nurture a good relationship and even get further funding
11 from them.
12 MR LAHER: And what were the terms and
13 conditions of the Presidium facility?
14 DR GRIEVE: That is quite a … [problem
15 with recording].
16 COMMISSIONER: Thank you, are we on
17 record? Thank you very much, let’s proceed, thank you Mr
18 Laher.
20 Dr Grieve, we were at the Presidium agreement and I asked
21 you just before we broke your recollection of the broad
22 terms and conditions and structure of that Presidium
23 agreement. Can you tell Madam Commissioner what you
24 understood to be the terms and conditions of the facilities
25 that were advanced by Presidium to the Grieve Company?
Page 26
1 DR GRIEVE: I will do my best with what I
2 can recall on that. They gave me a facility of R20 million
3 and there was an interest rate connected to that facility.
4 I am not now a 100% sure if it was 2.25% per month or if it
5 was 2.5% per month, but you can check that on the
6 agreement. The terms and conditions were that I would
7 service that facility on a monthly basis. It was also a
8 draw down agreement. So as I had transactions I would
9 approve them in my office and I would send the transaction
10 and the undertaking through and they would have a look at
11 it and then they would agree on their side that they were
12 happy to advance the funds and they would advance those
13 funds.
14 Typically we would have a facility of R20 million
15 and we would limit the exposure for them to R750 000.00 per
16 security that was my understanding at the time. And if we
17 went higher, we would just speak to them and then they
18 would probably ask for more information on the transaction
19 and they would either approve it or not approve it. Before
20 they advanced any monies though, they would also sign off
21 on the agreement and then they would advance the monies,
22 which I would then advance to the clients. And that’s the
23 short version of the agreement.
24 MR LAHER: In other words, let’s go back
25 to the first type of bridging facility you postulated at
Page 27
1 the beginning.
2 DR GRIEVE: Ja.
3 MR LAHER: What I want to call the “sale
4 bridge”.
5 DR GRIEVE: Okay.
6 MR LAHER: So if you had a sale agreement
7 presented to you, where you needed to bridge a portion of
8 that purchase price, you would secure an advance from
9 Presidium out of your facility?
10 DR GRIEVE: Yes.
11 MR LAHER: To enable you to meet that
12 request?
13 DR GRIEVE: Yes.
14 MR LAHER: You would send a draw down
15 notice or a request for payment to Presidium?
16 DR GRIEVE: Indeed, a draw down notice.
17 MR LAHER: And that draw down notice
18 would be supported by the underlying transaction in the
19 form of the sale agreement?
20 DR GRIEVE: Yes.
21 MR LAHER: In other words, Presidium
22 would verify the drawn down notice against the actual
23 transaction?
24 DR GRIEVE: Well at the minimum, at least
25 the letter of undertaking from the attorneys would be
Page 28
1 provided. And then they would come and visit me and go
2 through some of the agreements on an ad hoc basis as well.
3 They would use that letter of undertaking or as you termed
4 it, the guarantee, as a security and they would advance on
5 that. But they would visit me on a regular – irregular
6 basis, once a month, once every two months maybe, if they
7 were up in Johannesburg more frequently. And then they
8 would just check that the letter of undertakings were
9 supported by the actual contracts and agreements that we
10 say there were.
11 MR LAHER: In other words, they would not
12 advance any funds to you under the Facility Agreement,
13 unless they were satisfied that the advance was secured?
14 DR GRIEVE: That would be my
15 understanding, ja.
16 MR LAHER: And in each and every
17 transaction, the draw down notice would be supported by
18 that level of information?
19 DR GRIEVE: Yes.
20 MR LAHER: And satisfaction on the part
21 of Presidium?
22 DR GRIEVE: That would be my
23 understanding, yes.
24 MR LAHER: Was the Presidium facility a
25 long term facility – short term facility, because it seemed

Page 29
1 to me like it was like some kind of overdraft facility?
2 DR GRIEVE: I think that’s a good way to
3 look at it, indeed. Some sort of overdraft facility and
4 the initial idea would be the contract made provision for
5 12 months with a renewable option. And then the
6 understanding over the table initially was that they were
7 in for the long haul to build a big business.
8 MR LAHER: So let’s now take the
9 transaction when it is finalised and registered. So, the
10 purchaser has been – the seller has been bridged to the
11 level required?
12 DR GRIEVE: Yes.
13 MR LAHER: The transaction is registered.
14 The purchaser’s funds comes into the conveyancer, the
15 conveyancer then pays those funds in terms of the letter of
16 undertaking to you?
17 DR GRIEVE: Yes.
18 MR LAHER: What would you do with those
19 funds? Would you repay Presidium or would you use those
20 funds after deducting your costs and presumably bearing in
21 mind the return that you had to give to your other
22 investors?
23 DR GRIEVE: I would return the capital
24 that I used to advance.
25 MR LAHER: To Presidium?
Page 30
1 DR GRIEVE: To Presidium. And I would be
2 servicing the interest separately.
3 MR LAHER: So how did you service the
4 interest, from the profit?
5 DR GRIEVE: From the profit portions yes,
6 which made it tricky sometimes, because they wanted the
7 interest serviced on a monthly basis. And I would have to
8 wait sometimes 90 days, 120 days to actually get the
9 capital and the profit back to service that interest. Does
10 that make sense?
11 MR LAHER: Was this not the risk in the
12 business then?
13 DR GRIEVE: That was the risk in
14 hindsight, yes. One that I did not foresee to be a big
15 problem, no, but it was.
16 MR LAHER: When was the Presidium
17 facility repayable?
18 DR GRIEVE: The Presidium facility was
19 repayable according to my recollection here after 12
20 months, alright, or renewable or repayable, alternatively,
21 if I was in breach they could call it back sooner.
22 MR LAHER: And were you in breach?
23 DR GRIEVE: There was on occasion time
24 that I was in breach, because of their issues with interest
25 and obviously the book might not turn as quickly as what we
Page 31
1 had hoped for. So there were occasions where I was in
2 breach, yes.
3 MR LAHER: We probably will go into a lot
4 more detail the next time we reconvene on the R20 million.
5 Did you utilise the full facility of R20 million from
6 Presidium?
7 DR GRIEVE: Yes, I did.
8 MR LAHER: And at what point did you
9 reach the capacity of the facility?
10 DR GRIEVE: At what point?
11 MR LAHER: At what point did you utilise
12 the facility in total?
13 DR GRIEVE: Are you talking about a date
14 – a time?
15 MR LAHER: Yes, more or less.
16 DR GRIEVE: More or less in December
17 2008.
18 MR LAHER: And the facility would then be
19 repayable in accordance with its terms and conditions if it
20 was 12 months?
21 DR GRIEVE: Yes, but it wasn’t 12 months
22 on 2008 as far as I recall. It would have been much later
23 on, but –
24 MR LAHER: Let me just maybe give you
25 this agreement. In the file of documents that we looked at
Page 32
1 in the short adjournment we had just a few seconds ago, as
2 you know, we subpoenaed a representative of Presidium and
3 we received, this morning, two boxes of documents. And
4 paging through, I think it was file number 1 where you
5 would ordinarily start, I found a Facility Agreement
6 between Presidium and the Grieve Company, which is signed
7 on the 3rd of July 2008. And it was signed in Centurion and
8 I am going to get out the last page, the signature page
9 just to confirm that that is in fact your signature. And
10 if you could identify for Madam Commissioner who those
11 witnesses are?
12 DR GRIEVE: The signature is mine. The
13 one witness is Andre Botha and I must confess I have no
14 idea who the second witness is and I can’t remember who
15 that second witness is.
16 MR LAHER: Who is Andre Botha?
17 DR GRIEVE: He is my brother-in-law that
18 was working for me at the time.
19 MR LAHER: In what capacity was he
20 employed?
21 DR GRIEVE: He was actually employed as a
22 project manager in a construction business that we also
23 ran.
24 MR LAHER: Was he employed by the
25 construction business and by Grieve Company?

Page 33
1 DR GRIEVE: No, not by Grieve Company
2 just the construction business.
3 MR LAHER: Madam Commissioner, with your
4 permission, if I may just pass this document –
5 COMMISSIONER: Yes, of course.
6 MR LAHER: At this stage –
7 COMMISSIONER: You can make a bundle
8 later.
9 MR LAHER: I am sure if I want to refer
10 to it, because it is in the file of papers.
11 COMMISSIONER: No, absolutely.
12 MR LAHER: Dr Grieve, can you identify
13 the document that I have just given to you for the record?
14 DR GRIEVE: Facility Agreement between
15 Presidium Capital Management and Grieve Bridging Solutions,
16 as you referred to as the Grieve Company.
17 MR LAHER: Is that the Facility
18 Agreement?
19 DR GRIEVE: It looks like it, yes.
20 MR LAHER: That we have been talking
21 about?
22 DR GRIEVE: Yes.
23 MR LAHER: And if I can help you? Not
24 that I have had a very very good or had an opportunity to
25 study it very very carefully, but just to assist you to get
Page 34
1 your mind across this agreement. If you go to page 7 and
2 look at the definition of the term “principle” in clause
3 1.1.38 that, in your mind, is that reference to the loan
4 facility, the overdraft, the Presidium facility, whatever
5 we call it of R20 million?
6 DR GRIEVE: Ja.
7 MR LAHER: And if you go to clause 3 on
8 page 9, can you read the content of clause 3? It is just
9 two lines long for the record?
10 DR GRIEVE: “The agreement shall commence
11 on the signature date and shall terminate on the date on
12 which the facility outstanding is reduced zero, which date
13 the parties agree shall not be later than the 31st of July
14 2009.”
15 MR LAHER: In other words, it seems to me
16 that this was not an open ended facility. It had a
17 termination date, which could not go beyond 31 July 2009,
18 unless you had brought the facility down to zero at any
19 point in time, before 31 July 2009, am I correct?
20 DR GRIEVE: That should be correct.
21 MR LAHER: So apart from the nitty gritty
22 of any interest defaults, etcetera this facility came to an
23 end on 31 July 2009?
24 DR GRIEVE: Okay.
25 MR LAHER: I know and I place on record
Page 35
1 that what we don’t have is a copy of the agreement signed
2 by both parties, but no doubt we will search in the
3 records. I just want to get your understanding that this
4 constituted the Facility Agreement to your knowledge?
5 DR GRIEVE: Yes.
6 MR LAHER: So this full facility was
7 repayable on the 31st of July 2009?
8 COMMISSIONER: Is that how you understood
9 Doctor?
10 DR GRIEVE: That is what the agreement
11 says. We had various meetings as well and there was an
12 agreed further funding for December, which never realised.
13 MR LAHER: December of which year, sorry?
14 DR GRIEVE: December between the start
15 and the finish of this contract, so it would have been
16 December 2008. There was an agreed further funding of R5
17 million, which never realised and also put me in a bit of
18 bother. And the further understanding was that before the
19 closure of this we would probably set up a new agreement in
20 a different structure with larger funding, if they were
21 satisfied, if they were happy.
22 MR LAHER: What happened after 31st of
23 July 2009?
24 DR GRIEVE: We ran into trouble. We
25 attempted to find replacement funding, which we believed we
Page 36
1 had found, which never realised. And I looked very hard to
2 try and find somebody to replace them and it never
3 realised. And on top of that, we suddenly sat with a
4 couple of bad debts as well, which we never had in all the
5 years before that. And a mixture of that with the general
6 rise in, I am going to use that term again “dodgy
7 attorneys” we came across a couple of fraudulent
8 transactions that hit us quite badly. And a combination of
9 that, the pressure from Presidium.
10 They forced me to discount a part of my book and
11 I had very little choice with the pressure that they gave
12 me to discount a large portion of our book to Paul Marais.
13 And in the process we took quite a knock on the book with
14 that move as well. And I still, at that point, had hoped
15 that if the other funding had come in I could still rectify
16 the situation. And a couple of months after that when we
17 realised that it wasn’t going to realise, we approached
18 Willem Storm to help us out with legal proceedings.
19 MR LAHER: You said a lot of things and
20 let’s take it step by step.
21 DR GRIEVE: Okay.
22 MR LAHER: It appears to me that during
23 the tenure Presidium Facility Agreement you were in default
24 in your interest repayment obligation?
25 DR GRIEVE: Ja.

Page 37
1 MR LAHER: You then defaulted on the
2 repayment obligation as at 31 July 2009?
3 DR GRIEVE: Yes.
4 MR LAHER: Now something must have
5 happened and it appears that something did in fact happen,
6 because that is the indication we got from Mr Marais, who
7 was here before you. Something occurred between Presidium,
8 Mr Marais’ company and yourself. And I want to just get to
9 the bottom of what that transaction was.
10 DR GRIEVE: Alright.
11 MR LAHER: It appears, if I may just take
12 you step by step.
13 DR GRIEVE: Yes.
14 MR LAHER: And you can add to whatever I
15 say. It appears that on default Presidium became concerned
16 about their exposure, am I correct?
17 DR GRIEVE: That would be a fair
18 statement, yes.
19 MR LAHER: And when that level of concern
20 became serious, they sent a team of forensic experts to
21 investigate your business?
22 DR GRIEVE: Yes.
23 MR LAHER: Can you identify the team of
24 forensic people?
25 DR GRIEVE: I cannot recall their names,
Page 38
1 but if you offer their names to me I will tell you it was
2 them. I just need a bit of –
3 MR LAHER: Jaco Spies was mentioned.
4 DR GRIEVE: Jaco Spies is indeed and he
5 had a friend that was there once or twice with him, as
6 well.
7 MR LAHER: What was your assessment of
8 Jaco Spies, their involvement from whom they were holding a
9 mandate or a brief and what is it that they found in the
10 Grieve Company?
11 DR GRIEVE: I think they went through
12 everything and they came back with some harsh findings. A
13 couple of the transactions I had rolled on into new
14 transactions after I didn’t get that extra R5 million
15 funding and they were not totally happy with that, but they
16 could see that all the money was still there in the book.
17 And we had to re-securitise some of those rolled on
18 transactions and that was the short version of their
19 findings.
20 MR LAHER: Whatever findings and I
21 haven’t seen this forensic report and again I assume that
22 we will find it in this bundle of 12 or 10 files that were
23 provided this morning. Whatever findings the forensic team
24 made on your business and the debtors that gave rise to a
25 secondary transaction?
Page 39
1 DR GRIEVE: Yes.
2 MR LAHER: Can you tell Madam
3 Commissioner what your understanding of that second
4 transaction was?
5 DR GRIEVE: I just want to confirm. This
6 is the transaction now that Paul Marais entered into?
7 MR LAHER: Yes.
8 DR GRIEVE: I was given a lot of pressure
9 by Presidium and their attorneys. And they were
10 threatening the company with liquidations if we did not
11 enter into a transaction with Paul Marais. So I had a look
12 at the transaction of Paul Marais. He was willing to take
13 over Presidium’s part of the book.
14 MR LAHER: Who introduced Paul Marais to
15 you?
16 DR GRIEVE: I happen to have known Paul
17 Marais previously, because he was in similar business to
18 myself. He used to be involved with Metal. But in terms
19 of this transaction Singent introduced him to me for the
20 purposes of the transaction. And he also went through the
21 book. He was happy to identify the transactions that he
22 was willing to buy over and he also bought them over at a
23 further discount, after Presidium had hit me with a – what
24 is the word, penalty interest as well as the normal high
25 interest. And then he still forced me to discount those
Page 40
1 transactions to him.
2 MR LAHER: Let’s get to that transaction.
3 What is the transaction that you concluded with Paul
4 Marais’ company?
5 DR GRIEVE: In short, the transaction
6 would be that he would buy over, I can’t remember the exact
7 amount, say, R15 million it was a little less I don’t quite
8 know the exact amount.
9 MR LAHER: R13.7 million?
10 DR GRIEVE: That could be close, ja. He
11 brought over a certain amount of the book and he would
12 settle Presidium with that. So he never paid me the R13.7,
13 he would have paid Presidium.
14 MR LAHER: And just going back to that
15 agreement, did you understand Presidium to hold any form of
16 security in terms of the Facility Agreement?
17 DR GRIEVE: Yes.
18 MR LAHER: What was that security?
19 DR GRIEVE: For the transactions I had on
20 the book that they had approved that would be the security
21 that would be my understanding. If there is some more
22 semantics or small stuff that I am not familiar with, fair
23 enough, but my basic understanding is that the agreement
24 would be that they would hold security on the transactions
25 registered to them.

Page 41
1 MR LAHER: Are you contending that
2 Presidium held a limited security over the debts that were
3 owing under the underlying transactions to the Grieve
4 Company?
5 DR GRIEVE: I would like to do that, but
6 I would need to go and study the agreement to make sure
7 that I am making the right statement.
8 MR LAHER: Dr Grieve, turn to page 17 of
9 that agreement?
10 DR GRIEVE: Okay.
11 MR LAHER: For the record we are at
12 clause 22, will you read out the heading of that clause
13 please?
14 DR GRIEVE: “Cession of debts”.
15 MR LAHER: And will you read out the
16 definition of “ceded claims” in clause 22.1.1?
17 DR GRIEVE: “It means all claims and
18 rights of action, which the borrower now has and may at any
19 time in the future have against the debtors of the borrower
20 in the ordinary course of the borrower’s business. And
21 which are listed in a draw down notice, provided that all
22 claims and rights of actions, which are listed in all draw
23 down notices, taken together shall constitute the ceded
24 claims.”
25 MR LAHER: In other words, your limited
Page 42
1 construction is related to the debtor listed in the draw
2 down notice? Is that what you are saying?
3 DR GRIEVE: Ja.
4 MR LAHER: So the first right of priority
5 that Presidium would have over the debt would be limited to
6 the debt in respect of which the facility was advanced by
7 Presidium in terms of the draw down notice?
8 DR GRIEVE: That is how I understand it,
9 yes.
10 MR LAHER: Now let’s just try and fast
11 forward a little. We are now at the transaction involving
12 Paul Marais’ organisation. Can you recollect the debtors
13 that you sold to Paul Marais’ company in terms of that
14 secondary transaction that I referred to earlier? In other
15 words, to get to the point, were those debtors in fact the
16 debtors that formed the subject matter of the draw down
17 notice or were they debtors outside the draw down notice?
18 In other words, were they debtors funded by Presidium or
19 were those debtors funded by, for example, my creditors’
20 funds or other funds that you obtained from other investors
21 into the business?
22 DR GRIEVE: That’s a difficult one to
23 answer, because I do not have the full set of records with
24 me. They were taken from my offices from Paul Marais.
25 MR LAHER: Maybe I can assist you?
Page 43
1 DR GRIEVE: Please.
2 MR LAHER: Can you remember Percy
3 Masinga?
4 DR GRIEVE: Yes, I can.
5 MR LAHER: Was he one of the debtors?
6 DR GRIEVE: Of Presidium, if I can use
7 such a term.
8 MR LAHER: Yes.
9 DR GRIEVE: Yes, he was.
10 MR LAHER: Rapivest?
11 DR GRIEVE: Yes, he was or they were.
12 MR LAHER: Annatjie Botha?
13 DR GRIEVE: Yes.
14 MR LAHER: Ice Wind Trust?
15 DR GRIEVE: Yes.
16 MR LAHER: Suzette?
17 DR GRIEVE: Yes.
18 MR LAHER: Kanizay Holdings?
19 DR GRIEVE: To a portion.
20 MR LAHER: Delonicus.
21 DR GRIEVE: Can I interrupt you there.
22 Just go back to Kanizay what was the principle capital?
23 MR LAHER: R1 900 000.00.
24 DR GRIEVE: Okay, I am going to say yes,
25 but I would like to double check. There might be a small
Page 44
1 portion of that that would have been other funding.
2 MR LAHER: Delonicus, sounds like a Greek
3 term D-e-l-o-n-i-c-u-s.
4 DR GRIEVE: The majority of that list
5 will be Presidium stuff, but yes.
6 MR LAHER: Marais Spies?
7 DR GRIEVE: Yes.
8 MR LAHER: Monte Trust?
9 DR GRIEVE: Yes.
10 MR LAHER: This is a list that Paul
11 Marais gave us this morning.
12 DR GRIEVE: Ja.
13 MR LAHER: Of the debtors that he
14 acquired.
15 DR GRIEVE: Ja.
16 MR LAHER: For R13 700 000.00.
17 DR GRIEVE: Okay that sounds good.
18 MR LAHER: And it seems to me that the
19 vast majority of that list form part of debts that were
20 created and funded through the Presidium Facility
21 Agreement?
22 DR GRIEVE: Yes.
23 MR LAHER: In other words, Presidium held
24 a cession over these debts?
25 DR GRIEVE: Yes.

Page 45
1 MR LAHER: You mentioned in your papers
2 that – and when I refer to “papers” I refer to your
3 application brought to liquidate, not only the Grieve
4 Company, but various other companies early December – mid
5 December, followed by the exchange of an application that I
6 brought to liquidate the Grieve Company, on behalf of your
7 brother. And in your application to voluntarily surrender
8 your estate, you refer in these papers to the cause of your
9 financial demise as being, and I quote from your
10 application for voluntary surrender, “Synde Presidium On
11 Track en moes ek ? bedrag van ongeveer R21 miljoen aan
12 hulle direk oorbetaal.” Where did this figure of R21
13 million come from?
14 DR GRIEVE: That was the total
15 outstanding. The fact that he bought over the amount you
16 said now that close to R14 million –
17 COMMISSIONER: 13.7.
18 DR GRIEVE: 13.7 does not necessarily
19 mean the total that was outstanding, there was still some
20 outstanding and I could not find that money to pay
21 Presidium, not by the time lines they were giving me, no.
22 MR LAHER: Are you suggesting in these
23 papers that Presidium claimed R21 million not that you paid
24 Presidium R21 million?
25 DR GRIEVE: Exactly.
Page 46
1 MR LAHER: You see you end of here
2 saying: “moes ek ? bedrag van ongeveer R21 miljoen aan
3 hulle direk oor betaal.
4 DR GRIEVE: Ja, maar ek kon nie dit doen
5 nie.
6 COMMISSIONER: No absolutely you are
7 making a valid point. You are saying in your – sorry to
8 interrupt. You are saying in your application that you had
9 to pay Presidium R21 million, but that is not actually
10 correct, because we know now that the 13.7 the M&M, Paul
11 Marais’ company has now stood in the shoes in the
12 Presidium. So you only owed, well on that figure, what is
13 that 7 or nearly R8 million, if I understand that
14 correctly, which is not exactly what you are saying in your
15 liquidation application.
16 DR GRIEVE: Sure, if that is the case
17 then it must be incorrect then, but that is not the
18 intention of what is said there. The fact was I had to at
19 that stage give them about 21, I couldn’t. Paul entered
20 into the agreement and there was still about 6 or 7
21 outstanding.
22 COMMISSIONER: Yes, but hang on. The
23 date of the liquidation application is nearer December I
24 take it.
25 DR GRIEVE: Yes.
Page 47
1 COMMISSIONER: The Paul Marais
2 transaction was done in September.
3 DR GRIEVE: Ja.
4 COMMISSIONER: So at that stage that you
5 went on oath, on affidavit, the Paul Marais transaction had
6 already been done and dusted.
7 DR GRIEVE: I was referring to the
8 pressure of the 21 that I had to pay them. I wasn’t
9 referring to that I had partially paid them. That was the
10 pressure I had. Ja, I tried to do it. That is what we
11 did, ja.
12 COMMISSIONER: No, it is not just “ja”.
13 There you go under oath, Dr Grieve; you are now under oath
14 Dr Grieve.
15 DR GRIEVE: Ja.
16 COMMISSIONER: So I am asking you to
17 think very clearly and carefully before you answer a
18 question, because it has serious ramifications and Mr Storm
19 will advise you accordingly. Please proceed, Mr Laher.
20 MR LAHER: You see we started off this
21 little exchange with me expressing some reservation about
22 this Presidium Facility Agreement. To me, and I know I am
23 just a simple lawyer, no business expert, but it seemed to
24 me that this was just a hole that was getting deeper and
25 deeper and deeper as the days were going. But what I could
Page 48
1 not understand or what I cannot understand is that the
2 facilities that were advanced by Presidium were in
3 themselves guaranteed, because in terms of the draw down
4 notice you had to provide proof of the undertaking or the
5 guarantee or the underlying security in the transaction to
6 Presidium before they agree to advance the facility under
7 the draw down notice, correct?
8 DR GRIEVE: Ja.
9 MR LAHER: Now comes the 30th of July,
10 technically speaking, if all the draw down notices as you
11 said earlier had been settled when the transactions had
12 been concluded, you would have had to need R20 million
13 worth of transactions to collapse on you, for fraud, theft
14 or as you called it crooked attorneys.
15 COMMISSIONER: Dodgy.
16 MR LAHER: Dodgy attorneys. You actually
17 needed R20 million worth of transactions on 31st of July to
18 collapse on your face for you to be unable to pay R20
19 million on the 31st of July. Now, when one goes a step
20 further and looks at the Marais transaction, what you have
21 done is that R20 million worth of transactions “existed”
22 and you transferred R13.7 million worth of those
23 transactions to Paul Marais.
24 DR GRIEVE: Ja.
25 MR LAHER: In other words, you

Page 49
1 substituted Presidium or Presidium was substituted, not in
2 your books, but discharged to the level of R13.7 million
3 and it became Paul Marais’ baby to go and look for R13.7
4 million.
5 DR GRIEVE: Yes.
6 MR LAHER: So how then do you comment on
7 the statement, which I will read out again? “Een van my
8 grootste beleggers synde Presidium On Track en moes ek ?
9 bedrag van ongeveer R21 miljoen aan hulle direk oor betaal.
10 In other words, literal translation, Presidium withdrew or
11 strictly speaking came to an end of its facility and you
12 paid R21 million to Presidium.
13 DR GRIEVE: I am not sure how to respond
14 to that.
15 MR LAHER: You don’t have an answer to
16 that?
17 DR GRIEVE: No.
18 MR LAHER: Let’s go to the next part of
19 that paragraph. “Hierdie knou” in other words a dent “in
20 my kontantvloei van die besigheid het tot gevolg gehad dat
21 die besigheid nie verder voort kon gaan nie. In other
22 words, a R21 million debt in your cash flow resulted in the
23 collapse of the company. Now I can, to a degree,
24 understand R13.7 million because that has gone out of your
25 coffers.
Page 50
1 DR GRIEVE: Ja.
2 MR LAHER: What happened to the other
3 R8.5 million, the difference between R21 million and the
4 R13.7 million?
5 DR GRIEVE: There were a string of
6 discounting charges, a couple of bad debts and a specific
7 firm that really hurt me with quite a large amount of
8 money.
9 MR LAHER: And you will be able to, in
10 due course, in engagements with us, through your attorney,
11 explain where that other R8.5 million odd is?
12 DR GRIEVE: Yes.
13 MR LAHER: You see because I just and if
14 I am wrong, please tell me. I looked at this and said
15 well, you paid R21 million to Presidium that is clearly not
16 what happened. You never physically paid R21 million to
17 Presidium?
18 DR GRIEVE: I never physically paid the
19 R13.7 myself either.
20 MR LAHER: Well in a sense you did –
21 DR GRIEVE: Yes.
22 MR LAHER: - because you transferred your
23 right, title and interest to those debts.
24 DR GRIEVE: Yes.
25 MR LAHER: To M&M?
Page 51
1 DR GRIEVE: That’s correct, ja.
2 MR LAHER: And Paul Marais’ entity?
3 DR GRIEVE: Yes.
4 MR LAHER: So we have established that
5 Presidium advanced a facility, which in a sense you
6 operated as an overdraft facility. And which, at the end
7 of the day, I don’t think you can establish in the form of
8 R20 million received, Presidium here is R20 million for you
9 in respect of those transactions that you financed in terms
10 of the agreement. I mean we don’t have R20 million of debt
11 that you can establish in favour of Presidium, correct?
12 DR GRIEVE: Ja.
13 MR LAHER: And you say that the shortfall
14 is represented by other dodgy attorneys’ deals and defaults
15 that you experienced in that period?
16 DR GRIEVE: Yes.
17 MR LAHER: We have also established that
18 Presidium have some kind of cession, not some kind, but
19 Presidium held a cession over all the transactions that
20 they financed.
21 DR GRIEVE: Yes.
22 MR LAHER: A list of which we read out.
23 DR GRIEVE: Yes.
24 MR LAHER: The nine debtors.
25 DR GRIEVE: Yes.
Page 52
1 MR LAHER: And therefore in the
2 transaction that you concluded for the assignment of those
3 rights to those debtors to Paul Marais’ organisation, Paul
4 Marais’ organisation stepped into the shoes of Presidium
5 insofar as that security is concerned.
6 DR GRIEVE: Yes.
7 MR LAHER: So instead of Presidium
8 locking the door and going to each of those debtors, Paul
9 Marais is now collecting those debtors?
10 DR GRIEVE: Yes.
11 MR LAHER: And he is left with the
12 burden?
13 DR GRIEVE: Yes.
14 MR LAHER: And the Grieve Company has
15 reduced the Presidium debt from R20 million odd to R7
16 million odd?
17 DR GRIEVE: Yes.
18 MR LAHER: Now somewhere in your papers,
19 and forgive me, I cannot find the exact reference to it,
20 but somewhere and maybe it is in engagements I had with
21 your attorney and he can correct me as well. But somewhere
22 we spoke about this constituting some sort of preference
23 that Presidium has received a preference in respect of its
24 claim, ahead of other creditors.
25 COMMISSIONER: Mr Storm?

Page 53
1 MR STORM: I don’t think he can answer
2 that. I think that is a legal question. We did discuss
3 it.
4 COMMISSIONER: Oh I see.
5 MR STORM: We discussed it.
6 COMMISSIONER: I see.
7 MR LAHER: Madam Commissioner, forgive
8 me, but we will come back to that point at the next
9 hearing. But I, unless it is a discussion that is so
10 prevalent in my mind, but I have actually also seen it in a
11 written communication, which I have not been able to lay my
12 hands on between yesterday and this morning.
13 COMMISSIONER: Okay, no, that is fine.
14 MR LAHER: In preparation.
15 COMMISSIONER: Just on that point, Mr
16 Storm, there are legal, obviously legal implications but if
17 you take it just on the facts, where – let’s just take
18 someone around the table. We have the Fourie’s there,
19 where Presidium received an amount and the Fourie’s never
20 received an amount, just on the factual aspects. Presidium
21 was preferred above the Fourie’s.
22 MR STORM: No, I agree.
23 COMMISSIONER: But the legal implications
24 I agree, Dr Grieve, cannot be able to comment on that.
Page 54
1 UNKNOWN MALE: On that note, Madam
2 Commissioner, I would just like to address the audience.
3 We unfortunately have to excuse ourselves from the further
4 discussions. I have spoken with Mr Laher and he indicated
5 that it would be okay, so without further ado, would like
6 to excuse ourselves.
7 COMMISSIONER: Thank you very much for
8 your time, you may be excused.
9 MR LAHER: Madam Commissioner, I just
10 need to get some background so that you understand the next
11 line.
12 COMMISSIONER: Yes thank you.
13 MR LAHER: I am not going to be much
14 longer.
15 COMMISSIONER: No, that’s fine.
16 MR LAHER: What actually happened in the
17 sequence of events leading up to the liquidation of the
18 Grieve company and my understanding is the following, Mr
19 Storm, acting on behalf of Dr Grieve, launched a single
20 application in the Pretoria High Court for the simultaneous
21 orders to be granted against various Dr Grieve related
22 entities, one of them being the Grieve Company. And
23 placing all those entities into liquidation and placing a
24 trust that was operated by Dr Grieve under sequestration.
25 That application was dismissed or refused by the Pretoria
Page 55
1 High Court, am I correct?
2 DR GRIEVE: Yes.
3 MR LAHER: And Dr Grieve thereafter
4 placed the Grieve Company under voluntary liquidation. And
5 an order for the voluntary liquidation, by way of a special
6 resolution, which was registered on the 18th of December
7 2009 was effectively obtained, not an order but a
8 registration of a special resolution was secured on the
9 18th of December 2009. I then, representing Dr Grieve’s
10 brother, Mr William Lesley Grieve, a citizen and I think a
11 resident now of New Zealand, then launched an application,
12 effectively to cut a long story short for the conversion of
13 the voluntary winding up into a compulsory winding up. And
14 an order making the liquidation compulsory liquidation
15 retrospective to the date of registration of the voluntary
16 special resolution.
17 MR STORM: If I can just interrupt? That
18 application, Mr Laher, refers to us, an application for
19 setting aside the special resolution. After he consulted
20 with his counsel and it was decided we both want the same
21 thing, because we all anticipated enquiries in terms of
22 Section 417 and 418. And I had a draft order and that
23 whole application was then settled by the draft order,
24 which we had made an order –
25 COMMISSIONER: Order of court.
Page 56
1 MR STORM: Order of court.
2 COMMISSIONER: Oh I see.
3 MR STORM: So the application was for
4 setting aside, I said well, you know, we both want the same
5 thing we can just settle it while we have a draft order,
6 which we did.
8 MR STORM: And that’s what happened.
9 COMMISSIONER: So the conclusion stays
10 the same on the date of the stamp of the Registrar.
11 MR STORM: Exactly.
13 MR LAHER: And the only significance of
14 sketching that background is to start just with a few
15 questions on a document that was attached to the, let’s
16 call it the setting aside application.
17 COMMISSIONER: Thank you, that is fine.
18 MR LAHER: Dr Grieve, did you or I assume
19 that you were provided with a copy of the application that
20 was brought by your brother in the Pretoria High Court for
21 the setting aside and the conversion of the voluntarily
22 winding up?
23 DR GRIEVE: I don’t think. I don’t
24 recollect it. I actually can’t answer that, because I
25 can’t remember. I might have got a first page or I got

Page 57
1 something that said it was done, but I don’t think I got a
2 full document.
3 MR LAHER: Right, anyway, in that
4 application Annexure C and I will give you a copy in a
5 minute. Annexure C is a very confidential investment
6 proposal dated September 2009 that is not signed by anybody
7 and I will ask you if you had prepared this particular
8 document. Do you want to have a look at it just for a few
9 seconds?
10 DR GRIEVE: Just colour it in? Where is
11 this from?
12 COMMISSIONER: This is the application
13 that your brother brought that your attorney and Mr Laher
14 has just been discussing.
15 MR LAHER: It was attached to the
16 application. I think the first question is whether
17 prepared this document?
18 DR GRIEVE: I want to have a close look,
19 partially yes, 90% of it yes.
20 MR LAHER: Who else would have had a hand
21 in the application, in the document?
22 DR GRIEVE: My brother.
23 MR LAHER: Which brother?
24 DR GRIEVE: William Lesley Grieve.
25 MR LAHER: He would have prepared the
Page 58
1 information?
2 DR GRIEVE: Actually in this specific
3 document. I hear where you say it is coming from, this is
4 something I put together to tell him what we are doing.
5 Okay, it is not a contract. He just wanted to know what
6 are we doing and I prepared something like this. He looked
7 at it and said no, we must add more grass, we must do this,
8 we must do that and he helped me colour this thing in. So
9 yes, I know this document but it is not something that
10 necessarily was open for all to see. But it is something
11 that him and I actually worked on together, although most
12 of the input would be my own.
13 MR LAHER: Yes, the financial input in
14 that document would be yours?
15 DR GRIEVE: Mostly yes.
16 MR LAHER: And this document was used to
17 secure investments from, inter alia, your brother?
18 DR GRIEVE: That is a difficult one to
19 call, because I think we had already secured the
20 investments before we put this thing together, agreed on
21 it. I am not sure.
22 MR LAHER: There were some investments
23 that came in before and there were some investments that
24 came in after.
25 DR GRIEVE: Yes.
Page 59
1 MR LAHER: But it is your brother’s
2 version that the investments that were secured after were
3 clearly premised on this information document that you
4 provided to him.
5 DR GRIEVE: Unfortunately that would be
6 correct, ja.
7 MR LAHER: And this information document
8 is dated and prepared in September 2009, after Presidium
9 has pulled the plug on you, so to speak?
10 DR GRIEVE: It was prepared probably
11 before that, but ja it was dated after that. I can’t
12 remember exact dates and time lines, sorry.
13 MR LAHER: And by the time this document
14 is prepared and further funding is secured from your
15 brother, the business had already collapsed?
16 DR GRIEVE: He was aware of the pressure
17 from Presidium. And the business had not collapsed; we had
18 other funding that was supposed to have come through as
19 well, which he was also aware of. And he was privileged to
20 that information too. So to look at that document in its
21 own wouldn’t be fair.
22 MR LAHER: But in this document, and you
23 can take the time to go through it, but I could not find
24 any reference to the strain on the business put by
25 Presidium or the strain on the business put by dodgy deals
Page 60
1 from attorneys or the strain on the business put by
2 defaulting transactions.
3 DR GRIEVE: There wouldn’t be such
4 information in that. The intent of that document would
5 have been a marketing document and that was obviously
6 before the pressure was as big as it was, irrespective of
7 the date on there.
8 MR LAHER: The intent of the document was
9 clearly to demonstrate that the business of the company was
10 flourishing and was in fact in a growth phase. And all
11 that it required to achieve those levels of growth was
12 additional investment that’s how I read this document.
13 COMMISSIONER: Can you agree with that
14 statement?
15 DR GRIEVE: That is probably what that
16 document would represent, yes.
17 COMMISSIONER: Well not probably. You
18 are the author, 90% of that document you authored, so do
19 you agree with it or not?
20 DR GRIEVE: No, I don’t agree with the
21 content, no.
22 MR LAHER: We are going to have the
23 opportunity to – you don’t agree with the content?
24 DR GRIEVE: Although I put most of it
25 there yes, it doesn’t mean that it is accurate, no.

Page 61
1 MR LAHER: I just want you to have an
2 opportunity to go through this document and if you don’t
3 have a copy we will oblige and give you a copy -
4 DR GRIEVE: I would need a copy, because
5 I do not have a copy.
6 MR LAHER: Of these proceedings, but the
7 document in one section on page 12 of the document says,
8 “Even Investec is willing to provide funding, a return can
9 be given at 15% per annum. And further margin is created
10 to increase profitability for the company.” What’s your
11 comment on that?
12 DR GRIEVE: That would be ideal yes, and
13 I was still hoping that I could pull in sufficient funding
14 to make that realise, which never happened so that is
15 wrong.
16 MR LAHER: September 2008.
17 DR GRIEVE: I was still hoping in
18 September to pull in that funding, before we applied for
19 that liquidation. I had an agreement signed by a potential
20 alternate funder on the table and –
21 COMMISSIONER: Who is this anonymous
22 funder, what’s his – who are they?
23 DR GRIEVE: It is an Adv Derek de
24 Villiers and I put a copy of that on record, I am not sure
25 where, I think with Dewald as well, Breytenbach, the
Page 62
1 trustees. And I had a firm belief that that would have
2 realised. And that would have rectified the situation and
3 given me an opportunity to trade out of the strain, so that
4 would have been the ideal, yes. And that never happened
5 and –
6 MR LAHER: What was Dr de Villiers'
7 background and intent?
8 DR GRIEVE: He is an advocate. He is in
9 property and he introduced himself as somebody that is also
10 into funding and finance. And he represented at least one
11 fund and he was busy setting up another fund and he was
12 willing to step in and take the place of Presidium. And
13 that was what we were hoping for and he actually signed
14 such an agreement, which I have provided copies to, I think
15 to Willem or to Dewald, one of the two of them. And I
16 should be able to find another copy of that. And that is
17 the basis of why I prepared such an agreement, because I
18 still believed I could get that funding in and restore the
19 business at that stage, which unfortunately never
20 materialised.
21 MR LAHER: That is a very important
22 agreement.
23 DR GRIEVE: Yes, I have –
24 MR LAHER: We would like to have a copy
25 of that agreement.
Page 63
1 COMMISSIONER: I will make that order.
2 MR LAHER: Through the – I am not sure
3 what you have in mind, Madam Commissioner, but through
4 either the liquidator or Mr Storm that a copy be provided.
5 COMMISSIONER: Yes.
6 MR LAHER: The quicker we get a copy the
7 better it is for us.
8 COMMISSIONER: Absolutely. Can we have
9 that agreement within a week?
10 DR GRIEVE: I will see if I can find it.
11 I don’t have any records with me, because those records had
12 been lifted out of my office by Paul Marais, all my files,
13 and every single last file is in the possession of Paul
14 Marais. So a lot of these dates and stuff that you have
15 agreements with that have been provided to you by Paul
16 Marais or wherever, I don’t even have a copy of anymore.
17 So it does make things a little bit tricky, because they
18 literally emptied my whole office. So I am a little bit in
19 the dark on time lines, but the essence is in the memory
20 and we will get it sorted and I will find a copy of that
21 agreement somewhere.
22 COMMISSIONER: Okay, then you can just
23 provide it to Mr Storm and he can provide it to Mr Laher.
24 DR GRIEVE: I will.
25 COMMISSIONER: Thank you.
Page 64
1 MR LAHER: Just on Paul Marais, what is
2 your assessment on Mr Marais’ impression this morning that
3 the debtors that he purchased for R13.7 million are –
4 COMMISSIONER: Dodgy.
5 MR LAHER: For want of a better term, to
6 keep the terminology standard this morning. Or in fact
7 wholly uncollectable, is his terminology.
8 COMMISSIONER: He has actually had to
9 spend money according to him.
10 DR GRIEVE: That is very possible. I
11 have also, from the same Paul Marais, this morning outside,
12 heard that he has referred to a few other people that have
13 been put in the same spot as myself. And it seems to be an
14 industry disaster in the field, the likes of his previous
15 company Metal had to write off a couple of hundred million
16 and Allegro, which is in a similar space had to write off a
17 couple of hundred million. Five or six different large
18 bridging houses folded and unfortunately I am one of them.
19 And things in the property market were running smoothly we
20 had, as we quoted earlier, up until was it 2008 I said we
21 had no bad debts and then suddenly 2009 when the property
22 market went south, everything else just went south and a
23 lot of us, including myself, just ended up with bad deals,
24 which previously came from the same attorneys, no problem.
25 And now suddenly these deals are going bad, so it is

Page 65
1 horrible, but ja, I can actually believe it. If those
2 deals take too long to materialise the problems happen and
3 it is unfortunately, I mean, I got hurt badly with that,
4 but I know it is not just my company.
5 MR LAHER: But you said earlier today
6 that all those transactions were supported by underlying
7 guarantees?
8 DR GRIEVE: Exactly, term it a letter of
9 undertaking. Sorry if I am interrupting you, but I think
10 there might be a slight difference technically, but a
11 letter of undertaking from the attorney.
12 MR LAHER: Let’s put it this way, they
13 are relatively secure?
14 DR GRIEVE: Yes.
15 MR LAHER: How is that all R13.7 million
16 and I think we can safely assume the full amount, has
17 suddenly turned to be so sour and rotten?
18 DR GRIEVE: The best answer I can give
19 there is that we are sitting in a situation where people
20 went into these deals, certain guarantees had been issued
21 by banks and attorneys gave their letters of undertaking
22 then those terms and conditions got changed in that
23 process. And either a bank decided to withdraw funding,
24 which we had for the first time in the history, we had a
25 couple of banks that had already issued guarantees then
Page 66
1 suddenly wanted further information and started to pull
2 back on funding, which we had never seen before. Standard
3 Bank was one such bank specifically. I actually
4 experienced it personally as well, because in the other
5 business we had, which was a development business we had a
6 buyer from Standard Bank and suddenly his finance got
7 withdrawn after the guarantees had been issued. And we
8 actually saw quite a lot of that happen at that period of
9 time. I can actually understand that a large portion of
10 that might not be collectable.
11 Some of the attorneys might have legitimately
12 issued letters of undertaking based on guarantees from
13 banks, which were withdrawn. And some others would have
14 given those letters of undertaking maybe not having the
15 full authority to actually to do so and that is where we
16 refer to the dodgy undertakings.
17 MR LAHER: Were you ever approached by
18 Paul to assist in the collection of these debtors?
19 DR GRIEVE: Not –
20 MR LAHER: Since the liquidation of the
21 Grieve Company?
22 DR GRIEVE: No – no. In terms of the
23 stuff he bought over?
24 MR LAHER: Yes.
25 DR GRIEVE: Not really. I think there
Page 67
1 was one or two occasions where he called me about
2 something, because one of the – the Percy Masinga guy he
3 was harassing us because Paul was harassing him to get the
4 money out. And he started to send us all sorts of weird
5 threatening e-mails or SMS’ and stuff. And I asked him
6 just leave me alone and I have sold it off, it belongs to
7 Paul, Paul will collect it. And Paul phoned me and said
8 ja, I shouldn’t interfere with anything, I shouldn’t even
9 answer him, which I then obviously didn’t do. So on that
10 level yes, but not to assist, per se, with the collection.
11 I gave him maybe, after the sale, I had to obviously sign a
12 string of letters on each transaction, which say you know
13 this has now been sold this guy will contact you, so at
14 that level, yes. But not at a level where I literally had
15 to go and do the dirty work or get involved in litigation
16 or collections, no.
17 MR LAHER: Let’s just get back to this
18 proposal. In that investment proposal and let’s not link
19 it to your brother, let’s link it to me, for example.
20 DR GRIEVE: Okay.
21 MR LAHER: I have now been placed in
22 possession with this document and in it you go at great
23 lengths to out line how secure your business model is this
24 is the difficulty I am having Dr Grieve.
25 DR GRIEVE: Ja.
Page 68
1 MR LAHER: You say that this is very
2 secure, the business model is tight. In September 2009 you
3 have already got a developing history, short as it is, from
4 January 2009 to September of defaulting transactions, dodgy
5 attorneys, and deals falling flat in the middle or at the
6 time after you have already advanced monies to bridge the
7 deals. And you go out and you set out to potential
8 investors how secure a business model is this. In
9 hindsight do you think that that was really good and driven
10 with intent to place an investor with the security that I
11 am going to invest my hard earned money into this company,
12 let alone the emotional issues involved with a brother and
13 I am going to come out with this money? What are you
14 comments on that?
15 DR GRIEVE: I should never have done
16 that. And like I said earlier, at that point in time he
17 was aware of the pressure from Presidium. He actually came
18 into South Africa and I explained to him that –
19 MR LAHER: I don’t want to focus on your
20 brother.
21 DR GRIEVE: Alright.
22 MR LAHER: I want to keep it –
23 DR GRIEVE: I wouldn’t have given that to
24 you to be honest. I gave it to my brother.
25 MR LAHER: And you prepared this document

Page 69
1 solely for your brother?
2 DR GRIEVE: If somebody wanted to know
3 what I was doing I might show them that document, but that
4 was prepared for him and he said he might find somebody
5 that would be interested in helping us if we were
6 interested and that never came to fruition. But he helped
7 me prepare it, because he said he likes what we are doing
8 and yes, in retrospect hindsight is easy. We were not
9 aware of the full magnitude of the damage coming down upon
10 us at that point in time. So I regret ever taking a cent
11 from my brother. And I regret having sent that document to
12 him. But the fact is I did.
13 MR LAHER: You know you go on elsewhere
14 in the document to say, “This is an opportunity that an
15 investor has to earn good constant secure return on their
16 money, without having any sleepless nights.”
17 DR GRIEVE: And that was the case for
18 many years, but no, not in 2000 and –
19 MR LAHER: In September 2009 that was
20 clearly not the case.
21 DR GRIEVE: No, it wasn’t. But that was
22 –
23 MR LAHER: Sleepless nights have
24 obviously –
25 DR GRIEVE: But that was not the intent
Page 70
1 for anybody else really to see that, not from my side.
2 MR LAHER: You see your brother only came
3 to South Africa around the time of his birthday and I am
4 sure you are aware of the date of his birthday, around the
5 end of August.
6 DR GRIEVE: Earlier, beginning of August,
7 10th of August.
8 MR LAHER: The 28th of August –
9 DR GRIEVE: No, that is mine.
10 MR LAHER: Your birthday, sorry.
11 DR GRIEVE: Ja that is mine.
12 MR LAHER: 28th of August 2009. He came
13 out after many years to spend the time with you.
14 DR GRIEVE: Ja, and he asked me to
15 prepare something like that for him and he put input into
16 it, ja.
17 MR LAHER: That is not what your brother
18 says. In April your brother had already advanced a certain
19 amount of money, so he could not have advanced this on the
20 strength of the September investment proposal. In April he
21 had already advanced £100 000.00 through his bank account
22 in the United Kingdom that advance was made on the 14th of
23 April. He then advanced further amounts £200 000.00 on the
24 5th of June and £350 000.00 on the 2nd of September.
25 MR STORM: Is he coming to testify?
Page 71
1 MR LAHER: I have his affidavit here.
2 DR GRIEVE: Yes, but he did provide those
3 fundings, ja. I can’t give you the exact –
4 MR LAHER: All those fundings?
5 DR GRIEVE: More or less.
6 MR LAHER: All those fundings? It seems
7 to me were advanced before this investment proposal had
8 even been prepared. And they were advanced, as he says,
9 they were advanced more or less on the same kind of
10 representations, representations that this is a very secure
11 business, you are going to have no sleepless nights once
12 you put the money. It is so tight and secure and you are
13 looking for an investment in September 2009 of R100
14 million. But, in essence, the investment put in by your
15 brother predated this investment proposal and was made
16 against the assurance that the investment was more or less
17 secure, which has clearly not turned out to be the case.
18 What have you got to say to that?
19 DR GRIEVE: Well I regret having sent him
20 that in hindsight. And it is easy in hindsight –
21 MR LAHER: No, that is not the document
22 that I am talking about sorry Dr Grieve.
23 DR GRIEVE: Okay.
24 MR LAHER: That is not the document that
25 I am talking about, but the basis, the representations that
Page 72
1 were made by you to elicit the investments that were made
2 by your brother, were they correct that this was a secure
3 business your return was intact?
4 DR GRIEVE: When I initially started
5 speaking to him yes they were correct. And I am confident
6 that they were still correct at that stage. The trouble
7 really only started in the middle of the year. We had one
8 guy that went insolvent January - February of that year and
9 we managed to still get some of that money out of his
10 estate. And the drama really only came later on in that
11 year, so I would say with the first two investments I am
12 fairly confident that that representation was still close
13 to the truth, alright. And then, ja, we started to pick up
14 trouble from July really and Presidium gave – April we
15 skipped a payment, but we still had enough interest being
16 earned, if I can use the term “interest” loosely,
17 discounting charges being earned on the book that was
18 there.
19 And I still felt okay, we might miss a payment,
20 but if this one comes in, we can come up with the money.
21 And in the interim we can see Presidium is getting a bit
22 uncomfortable so we will go and approach some other people,
23 see if we can replace their funding with a more user
24 friendly cheaper type funding. And we believed we had
25 achieved that, which we in hindsight didn’t. And even that

Page 73
1 thing, I mean, I still believed that we could pull it out
2 the fire up until August, maybe even early September, I
3 still believed that we could fix this. And then we
4 realised we were struggling –
5 MR LAHER: I put it to you did you not go
6 out to your brother and other investors at that time in
7 order to bridge the gap that was looming with Presidium?
8 DR GRIEVE: I would have tried to do that
9 yes.
10 MR LAHER: Were you not just borrowing
11 from Peter to pay Paul?
12 DR GRIEVE: I don’t like to put it that
13 way no; I was trying to find a replacement funder that was
14 my goal that was my intent. So I wasn’t trying to borrow
15 from Peter to pay Paul, I was trying to find a replacement
16 funder and that was what I was ultimately trying to
17 achieve. In hindsight that did not realise and –
18 MR LAHER: Did you use your brother’s
19 money for bridging transactions?
20 DR GRIEVE: Some of it yes. And some of
21 it I did use to pay Presidium.
22 MR LAHER: And how will we be able to –
23 DR GRIEVE: That is going to be very
24 difficult to do. I mean –
25 MR LAHER: Where are the bank statements
Page 74
1 of the Grieve Company?
2 DR GRIEVE: If Dewald doesn’t have them
3 Paul Marais has them.
4 MR LAHER: Why would Paul Marais take
5 possession of the bank statements of the Grieve Company, he
6 only has a right to the debtors?
7 DR GRIEVE: I said this earlier. He
8 removed everything from my office.
9 MR LAHER: Is the theft that you spoke
10 about or is this –
11 DR GRIEVE: There were two sets of
12 thefts.
13 MR LAHER: Yes.
14 DR GRIEVE: There was, in December, a
15 literal break in where they entered through the ceiling
16 boards and the roof through outside, they went through the
17 ceiling and they removed some coffee machines and one or
18 two computers and printers and that was fairly limited
19 damage, because obviously they couldn’t get anything too
20 big through the ceiling boards. And I, at that stage, had
21 already started the liquidation process, so it was my
22 assumption that I didn’t really have any rights to even
23 that property and I was waiting for Dewald and other people
24 to be appointed. And I would assume that they would then
25 go and empty and collect all the documents and furniture
Page 75
1 and everything that was there and work through it and do
2 their process. And unfortunately before they went and
3 collected it, Gateway and Paul Marais were involved in
4 emptying the office, exactly the precise detail I don’t
5 know, but they literally took everything in those offices
6 and that is why I referred to, I am not necessarily in
7 possession of every document I should be in possession of.
8 MR LAHER: Where was the Grieve Company’s
9 bank account held?
10 DR GRIEVE: The bridging company was with
11 Standard Bank and ABSA Bank, but most of the transactions
12 were run from Standard Bank.
13 MR LAHER: Which branches?
14 DR GRIEVE: Centurion and Centurion.
15 MR LAHER: Do you have details of the
16 account numbers or can you memorise them?
17 DR GRIEVE: Not anymore, but what I can
18 do with ABSA 4061313082, let me must write that down. What
19 did I just say?
20 COMMISSIONER: You said 406.
21 DR GRIEVE: Now I am confused.
22 MR LAHER: Can you provide this detail
23 together with that –
24 DR GRIEVE: I can give you contact
25 telephone numbers and names.
Page 76
1 MR LAHER: With the de Villiers
2 agreement?
3 DR GRIEVE: No, the de Villiers agreement
4 is easy.
5 MR LAHER: No, but can you provide the
6 details of the account number with that agreement later
7 next week?
8 COMMISSIONER: Hang on, we have got
9 something here.
10 DR GRIEVE: That is the one, but I mean
11 we speak to the bank and they will give us the other one,
12 so I am sure we can get the account numbers.
13 COMMISSIONER: Okay, can we have that,
14 can we just have a copy of that?
15 MR LAHER: Commissioner, I won’t get the
16 bank to provide me any details unless I give them the
17 specific account numbers.
18 COMMISSIONER: Absolutely.
19 DR GRIEVE: I don’t have a problem, I am
20 just not quite sure where I am going to find it, but I am
21 sure I will be able to make a plan.
22 COMMISSIONER: Well I just have a huge
23 problem with what you have just told us, if that is
24 correct. Who is Gateway by the way?
25 DR GRIEVE: Gateway was the owner of the

Page 77
1 –
2 COMMISSIONER: The landlord?
3 DR GRIEVE: The landlord, ja.
4 COMMISSIONER: But that still does not –
5 I mean the landlord still has to work through Mr
6 Breytenbach. He can’t go on his own steam and remove and I
7 mean Paul Marais, what locus standi does he have to the
8 books and records of the Grieve Company? So I mean he
9 needs to address us on that.
10 DR GRIEVE: Okay, the ABSA account number
11 from Bridging Company is 4064367327 that is the ABSA
12 account. The Standard Bank account I will have to try and
13 get for you.
14 MR LAHER: And these were the only two
15 accounts that were operated by the Grieve Company?
16 DR GRIEVE: Ja.
17 MR LAHER: You had no savings account
18 linked –
19 DR GRIEVE: No savings account linked.
20 MR LAHER: To the cheque account?
21 DR GRIEVE: No – no, but originally when
22 we did our application, you will have to help me with the
23 terminology there. We wanted to do a – what do you call it
24 a corporate veil?
25 MR LAHER: Yes.
Page 78
1 COMMISSIONER: Pierce the corporate veil.
2 DR GRIEVE: Pierce the corporate veil,
3 because if I was running low on cash flow I might take
4 money from my private account and use that to service the
5 interest with Presidium. So there will be a lot of cross
6 transfers that you will see, but I mean my private accounts
7 are open to scrutiny as much as you like as well. I mean
8 it is –
9 COMMISSIONER: And just on that point,
10 sorry to interrupt you, the other entities was that also
11 done by you? If the one, say a CC, was flush with money
12 and you needed to pay Presidium would you then transfer
13 money from the CC into the Grieve Company?
14 DR GRIEVE: Not so much from a CC. I
15 didn’t have accounts for all the companies.
16 COMMISSIONER: Hypothetically?
17 DR GRIEVE: Ultimately that would be an
18 accurate statement. I might say okay this CC has a bit of
19 spare cash, so I transfer it to myself, private individual
20 and then I would support one of the other entities with it,
21 so that I could try and keep the bookkeeping a little bit
22 smoother, so that I would have a loan account with each
23 company. So indirectly yes.
24 COMMISSIONER: Okay and what software did
25 you use to run the books and records?
Page 79
1 DR GRIEVE: Pastel, but I wasn’t so
2 aufait with that, so I had bookkeepers and I must confess
3 in the last year we had a disaster with bookkeepers, we
4 went through one every three months, so how accurate they
5 are is going to be a tough call, but the banks accounts are
6 also there so.
7 COMMISSIONER: And do we have the Pastel
8 software – have you got the Pastel software accounting
9 system?
10 DR GRIEVE: No, let me just make sure. I
11 had computers that were stolen.
12 COMMISSIONER: Oh yes.
13 DR GRIEVE: By a criminal.
14 COMMISSIONER: Yes.
15 DR GRIEVE: Activity and that was one of
16 the computers that were stolen is the one that had the
17 Pastel on.
18 COMMISSIONER: And the backups did you
19 have backups?
20 DR GRIEVE: We have backups as well.
21 COMMISSIONER: Ja.
22 DR GRIEVE: And I am not quite sure where
23 those are backups are. Paul Marais may have them, because
24 I had cupboards in the office and unfortunately the backups
25 are kept on site.
Page 80
2 DR GRIEVE: I didn’t expect a burn or a
3 “this” or a “that”, so I am not quite sure where we are
4 going to find those backups. What I might have as well, I
5 might have access to older backups as well that might just
6 be six months or nine months’ old.
7 COMMISSIONER: Well anything you can
8 assist Mr Storm –
9 DR GRIEVE: I will just see what I can
10 find.
11 COMMISSIONER: Okay thank you, please
12 continue.
13 MR LAHER: Who are the contact persons at
14 the bank ABSA contact?
15 DR GRIEVE: May I switch my phone on?
16 COMMISSIONER: When we stand down.
17 MR LAHER: Okay, we will take that
18 information, if you have got both those contact details –
19 DR GRIEVE: Or actually maybe out of the
20 head, you can just phone. The Standard Bank guys have
21 changed managers so many times I can’t tell you anymore,
22 but at ABSA it was a guy called Chris Joubert initially and
23 he also just left. I was going through these bank managers
24 like crazy. Chris Joubert was in charge most of the time
25 at ABSA Centurion, there was another guy that took over

Page 81
1 from him and I can’t remember his name either – Andre de
2 Jager, there it is, Andre de Jager at ABSA Centurion. He
3 was the one contact. And the guy at Standard Bank I am not
4 quite sure who was the latest manager.
5 MR LAHER: And can you remember where you
6 brother’s money was paid into, which account?
7 DR GRIEVE: Standard Bank, I think that
8 might have been paid into the incorporated account and not
9 the specific company in question’s account, I can’t
10 remember.
11 COMMISSIONER: Okay, explain that?
12 DR GRIEVE: We did transfers and money
13 landed up in the incorporated account when the banks paid
14 it out, it is as easy as that.
15 MR LAHER: The exchange control approvals
16 were all given in the name of the Grieve Company?
17 DR GRIEVE: Ja, I think that we made a
18 bit of a mistake on the account numbers. So I am not
19 saying that it wasn’t paid to the Grieve Company at all,
20 but it was paid to, ultimately to me and it belonged to the
21 Grieve Company, so that is true. It just didn’t land up
22 there.
23 MR LAHER: So if it was paid into Grieve
24 Inc it was transferred out of Grieve Inc into the Grieve
25 Company?
Page 82
1 DR GRIEVE: Ja.
2 MR LAHER: So we would see those – we
3 would see the –
4 DR GRIEVE: There were three accounts, if
5 I may just interrupt and it will flow through one of those
6 three. It would either be Incorporated, which was the
7 building company or it would be in the Bridging or it will
8 be in the private cheque account with Standard Bank, one of
9 those three.
10 MR LAHER: Sorry, what is the second one
11 the ABSA account?
12 DR GRIEVE: No, no, my brother’s money
13 didn’t flow through ABSA at all.
14 COMMISSIONER: The building?
15 DR GRIEVE: The building company.
16 MR LAHER: Oh I see.
17 DR GRIEVE: The building company, my
18 private account and the Grieve Company as you referred to
19 it.
20 MR LAHER: And immediately the monies
21 were received they went into the Grieve Company?
22 DR GRIEVE: I can’t recall if that would
23 be the exact case. They may have gone into my private
24 account and to the Grieve Company, a bit of both possibly.
25 MR LAHER: And can you tell us today
Page 83
1 whether the entire amount received from your brother was
2 used for the benefit of the Grieve Company?
3 DR GRIEVE: That would not be totally
4 correct, no.
5 MR LAHER: In other words, some of the
6 money was used outside the scope and objectives of the
7 Grieve Company?
8 DR GRIEVE: Yes and he was aware of that.
9 MR LAHER: He is aware of it?
10 DR GRIEVE: Yes.
11 MR LAHER: And why do you say that?
12 DR GRIEVE: Well, with all the promises
13 of funding that we had we made a deposit on a house as well
14 that we were intending to buy.
15 MR LAHER: Yes.
16 DR GRIEVE: And he was happy to advance
17 me money for the deposit on that house too. It was a large
18 deposit.
19 MR LAHER: And what has happened to that
20 transaction?
21 DR GRIEVE: Well obviously it hasn’t
22 realised.
23 MR LAHER: And what’s happened to the
24 deposit?
25 DR GRIEVE: The money has been lost.
Page 84
1 MR LAHER: You mean forfeited?
2 DR GRIEVE: Indeed.
3 MR LAHER: To the seller?
4 DR GRIEVE: Yes.
5 MR LAHER: Who is this transaction with?
6 DR GRIEVE: I don’t quite understand?
7 MR LAHER: With whom did you conclude
8 this transaction?
9 COMMISSIONER: Ja, who is the seller?
10 DR GRIEVE: I would have to go and try
11 and find some names there.
12 MR LAHER: Have you got a copy of the
13 sale agreement?
14 DR GRIEVE: No, that would have been left
15 in the office as well, but I can definitely find the
16 attorney that was at least dealing with the transaction I
17 have that number on my phone. So even if I don’t have a
18 copy of the sale agreement, I am sure we can get it.
19 COMMISSIONER: Or the estate agent.
20 DR GRIEVE: Ja, no, the estate agent’s
21 wife – the estate agent is a lady and it is her husband who
22 is the attorney, an Etienne Naude.
23 MR LAHER: In Pretoria?
24 DR GRIEVE: Yes.
25 MR LAHER: And what deposit did you pay?

Dr DS Grieve Special Insolvency Inquiry Part 5 - 3 August 2010

Dr DS Grieve Special Insolvency Inquiry Part 5 - 3 August 2010

Recommended

Recommended

More Related Content

Similar to Dr DS Grieve Special Insolvency Inquiry Part 5 - 3 August 2010

Similar to Dr DS Grieve Special Insolvency Inquiry Part 5 - 3 August 2010 (18)

More from UnitasDokters

More from UnitasDokters (16)

Recently uploaded

Recently uploaded (20)

Dr DS Grieve Special Insolvency Inquiry Part 5 - 3 August 2010