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Battle over inheritance turning to ConCourt

Zelda Venter|Published

A claim by a family against the Public Investment Corporation, for the payment of R1.35 trillion. Picture: File

ZELDA VENTER

zelda.venter@inl.co.za

A claim by a family against the Public Investment Corporation, for the payment of R1.35 trillion – money which is said to the PIC is holding, has turned to the Constitutional Court.

The apartheid government’s policy of precluding any person from paying money over to a foreign creditor, citizen or country, will also come under the spotlight.

The legal wrangle concerns the wife and executrix of the estate of the late Abdul Razak Tayob Surtie.

The Surtie family say Surtie is the beneficiary of offshore inheritance assets which were repatriated during 1984, after the repatriation was initiated at the time by the Lesotho Branch of Barclays Bank Limited.

The source of the funds was from diamond mining claims and investments done with a share certificate portfolio, after having been involved in commercial trade as far back as 1896. The Share Certificate Portfolio Number 7315 is globally recognised as a financial trading instrument for precious metals and is commonly known as trust bonds, paying dividends every three years.

The plaintiffs said the share certificate and the accompanying rights and obligations were transferred to the deceased during 1923 and, by operation of law, the deceased became the beneficiary of the assets and funds held by the certificate.

The share certificate was put on the stock exchange trade with the London Stock Exchange which was managed by Barclays Bank International.

The second plaintiff in the case, Edward Jeffrey Koorbanally, a financial and forensic expert instructed by the family to assist them in instituting the claim, said he established from the Absa Group (the second defendant) that assets relating to the share certificate belonging to the deceased, in the amount of $36 billion, was transferred into the deceased’s account on December 10, 1984.

In June 1985, six months after the date of transfer of the funds, it was converted to South African currency, in the amount of R87.84bn, the family’s particulars of claim stated.

It is said the funds of the deceased were invested in government bonds RSA 150 and RSA 153. The amounts earned from the aforesaid investments equalled a total of R1.35 trillion.

The funds, it is said, were deposited into a special restricted account in the 1980s. Under apartheid government’s regulations and laws, such payment was prohibited.

The PIC subsequently invested the fund in South African government bonds which were underwritten by the South African Reserve Bank, the claimants said.

According to the summons issued against the PIC and Absa, in October 2001, the value of the bonds were respectively R77.3bn and R91.9bn.

They said the Financial Services Board (now Financial Sector Conduct Authority) confirmed the bonds in USD denominations.

The plaintiffs accordingly seek payment of R1.35 trillion which they calculated at R87.84bn plus interest over the years.

The PIC, however, noted an exception to the plaintiffs’ particulars of claim, and stated that the pleading did not sustain a cause of action. Their exception included that the claimants had failed to seek an order that the apartheid government’s policy of precluding any person from paying money over to a foreign creditor, citizen or country was declared unconstitutional and invalid or reviewed and set aside.

The plaintiffs, on the other hand, submitted that the provisions of the regulations of the Currency and Exchange Act gazetted in October 1993, that prevented payment to the plaintiffs, had lapsed in August 2001and were not replaced by similar provisions.

They further submitted that the lapse of the regulations placed them in a position that they were able to claim payment of the money held for the benefit of the deceased’s estate.

They said the PIC’s argument in respect of them having to pursue a declaration of constitutional invalidity was without merit as the regulation in question was non-existent.

However, last year, the Gauteng High Court, Pretoria, however, upheld two of the PIC’s exceptions.

The claimants, in turn, launched an unsuccessful application for leave to appeal the judgment.

They are now turning to the Constitutional Court, asking for leave to appeal.

The family’s lawyer, Donovan Sam, said the high court wrongly upheld the two grounds of exception.

He said both grounds of exception raised constitutional issues. It included the issue of whether it was necessary to have policies that were no longer in effect either declared unconstitutional or have them set aside on other grounds before persons could claim for that which the erstwhile policy precluded them from receiving.

The PIC is opposing leave to appeal.

Koorbanally said they hoped the matter would be heard this year, before the court went into recess.

Pretoria News