Police are investigating SA farmer and businessperson Arno Steenkamp after his Dubai partners laid a criminal complaint of financial fraud against him, accusing him of duping them of $1.5m (about R26m) in a deal that went pear-shaped.
Steenkamp, who has been active in commercial hunting and farming operations, is being pursued by Dubai-based Esco Group.
Esco allegedly came into contact with Steenkamp in early 2023 in a fruit buyer’s office in Dubai.
Esco says in its complaint that in December 2023 Steenkamp’s outfit Route2Fruit offered it a partnership in the trade of grapes and oranges.
After the discussions Esco contracted Steenkamp to supply 300,000 cartons of grapes from SA, priced at $10-$12 per carton in the selling markets.
The agreement, according to Esco, was that it would fund the preseason supply-booking advances of $5 per carton, which came in at $1.5m to farmers.
The funding agreement was that Steenkamp would provide proof of disbursements to farmers of previous tranches before he was handed the next tranche.
Esco investigates in SA
To this end, Esco sent one of its managers to SA who met some of the farmers proposed by Steenkamp.
However, Esco alleges that it later discovered that the farmers presented to it differed from the farmers Steenkamp actually funded from its funds.
To make matters worse, Esco says that two months after it advanced $1.5m to Route2Fruit, it was informed just before Christmas of 2023 that Route2Fruit had entered into liquidation.
Esco says it believes Route2Fruit wilfully defrauded it and that the company was a Ponzi scheme, and that Steenkamp used the finance received from it to repay previous debts he had from the fruit sellers in SA and not for securing the fruit supply he had contracted with it.
‘Hiding behind’ voluntary liquidation
The Dubai group accuses Steenkamp of using provisions in SA company laws such as those about voluntary liquidation to shield him from the “fraud” he has committed.
Steenkamp denies the allegations, saying he will defend his actions in court.
“Our client denies that he is guilty of any offence and [believes] that he will be fully vindicated at trial,” Steenkamp’s attorneys said.
“As this case is [in] its infant stage, we will not become embroiled in correspondence regarding the allegations and the facts our client intends to put before court in due course, save to confirm that our client denies the allegations against him.”
History of fraud
Despite his innocent plea, in another matter involving Route2Fruit and one of its creditors, Enable Capital Enterprise, Steenkamp before the Cape Town high court admitted to engaging in fraudulent business practices.
The case stems from a multimillion-rand bridging finance agreement Route2Fruit entered into with Enable.
Steenkamp represented Route2Fruit and bound himself personally as surety and co-principal debtor.
However, Route2Fruit failed to meet its payment obligations under the bridging finance agreement and after negotiations between the parties the deed of settlement and suretyship were concluded in December 2023.
The surety signed by Steenkamp bound the Arno Steenkamp Trust, which owns about seven farms in the Karoo. However, he signed the deed of settlement and suretyship purporting to bind the trust in favour of Enable without the consent of his fellow trustees.
‘Desperate and overwhelmed’
Steenkamp has admitted to his indiscretion in this matter, telling the court that he knowingly misrepresented the consent of his fellow trustees, saying he was “desperate and overwhelmed” by the dire financial position in which Route2Fruit found itself at the time and was trying to buy himself time to rescue the business.
However, evidence shows that weeks after the purported surety agreement, Route2Fruit commenced voluntary winding-up at Steenkamp’s instance, a process that quickly ended up in voluntary liquidation — with Enable sharing the same fate as Esco.
Steenkamp’s estate was sequestrated in November last year.
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