CAPE TOWN – It’s more than 18 months since charges of attempted extortion were laid against South Africa’s so-called richest woman, Magda Wierzycka, the chief executive of JSE-listed asset management company Sygnia, but the case has not yet seen the inside of a courtroom.
On December 11, 2018, African Equity Empowerment Investments (AEEI) and its (now former) chief executive, Khalid Abdulla, laid a charge of attempted extortion against Wierzycka after she allegedly approached AEEI and Abdulla to buy back shares that AEEI and Sekunjalo Investment Holdings (Sekunjalo) have in Sygnia, but at a substantially lower price – far less than their market value.
The investigating officer in the case, Detective Pillay, confirmed the attempted extortion case but declined to comment further as the matter was still under investigation and he was not authorised to speak to the media.
An AEEI spokesperson, who has been following the matter, said yesterday that there was a back-and-forth in terms of the investigation due to the requirement for commercial crimes in South Africa to first go through a prosecutor, who also carries out an inquiry on the docket. This is before it is escalated or otherwise.
The National Prosecuting Authority confirmed this was the case when approached for comment, affirming that while they had knowledge of the matter – through media reports – their office did not as yet have a file or docket of the case in the system.
The AEEI spokesperson also expressed the company’s frustration in that the complaint had been filed more than a year ago and aside from it being referred to a senior prosecutor, not a lot had been done, while Wierzycka’s tirade continues unabated.
“The SAPS has indicated that there is a delay in investigating this serious accusation, due to the ongoing fallout from the lockdown as a result to the spread of the coronavirus (Covid-19) pandemic. They have, however, confirmed that the case is very much open and is being given due consideration.”
The offer, according to Abdulla’s affidavit, was couched in terms of threats from Wierzycka that if AEEI did not sell her the shares, at her decided price, she would continue to use the various media platforms at her disposal to put Sekunjalo, AEEI and its associated company, AYO Technology Solutions (AYO), in a negative light – which would negatively affect their reputation and ability to trade effectively.
Collectively, the three entities own about 3.5 million shares in Sygnia. At the time of the alleged attempted extortion, the benefit to Wierzycka would have amounted to millions of rand.
Written correspondence seen by Business Report reads: “Khalid, I would like to buy your Sygnia shares. We don’t have a good relationship and it will continue deteriorating. If we part company now, I will move on from AYO, Vunani, Sekunjalo stories. It would be, in both parties’ best interest, a once-off offer. Magda.”
According to lawyers specialising in extortion or blackmail, a crime is committed when a person unlawfully and intentionally obtains some advantage, which may be of either a patrimonial or a non-patrimonial nature, from another by subjecting the latter to pressure, which induces him or her to hand over the advantage.
Wierzycka has used some media channels to deny making an offer to buy the shares at lower than market-related valuations.
“I’ve made a couple of attempts to buy back those shares They have rebuked me every single time The last exchange we had was when I offered to buy back the shares at market rates They refused and the next thing I hear is I’m charged with extortion” Wierzycka has been quoted as saying.
Coincidentally, not having been successful in her attempts to re-purchase the shares in question, Wierzycka remains outspoken against the companies she appears to have manufactured a gripe against.
In her correspondence with AEEI, Wierzycka is seen to repeatedly state that she would be willing to “walk away from AEEI, AYO, Vunani, Sekunjalo etc” on condition the shares were sold back at R7.50 a share.
At the time of the initial “threat”, Sygnia shares were trading in the region of R9.20 per share, today they are trading at R13.27. This would have meant an almost R6 million loss to AEEI and at today’s value, that would have been in excess of R20 million. It would also have been Wierzycka’s gain.
Why it is that Wierzycka no longer needed AEEI as a shareholder in her business and offered to buy them out, is anyone’s guess. However, given that both entities are shrewd businesses in their own right, it would seem that as the Sygnia share price continues to perform, AEEI will not be looking to offload its shares any time soon. The day it does, said an AEEI insider, the market should take note.
This story first appeared in the Business Report Online