Richard Ngwenya’s property empire targeted in R20m investment fraud battle
Controversial businessman and investment banker Richard Simanga Ngwenya is facing fresh legal scrutiny after a Nigerian-listed financial services group launched an urgent high court application to freeze properties allegedly linked to him, accusing him of orchestrating a scheme that diverted R20m meant for a corporate acquisition.
VFD Group, one of Nigeria’s largest listed financial institutions, has approached the Gauteng local division of the high court in Johannesburg seeking an interim anti-dissipation interdict over five immovable properties while it pursues a civil claim to recover R15.5m it alleges remains outstanding following the collapse of an investment transaction.
Ngwenya, who has cultivated a high-profile image on social media by regularly showcasing his luxury lifestyle, is also facing separate criminal charges of fraud and money laundering arising from the same investment transaction.
The application places Ngwenya squarely at the centre of the dispute. He is cited both in his personal capacity and as the individual who allegedly exercises control over Nisela Property SPV and Vicric Investment Properties, while Elevate Investment Partners is cited as the vehicle through which the investment transaction was concluded.
According to the founding affidavit, the application is not aimed at determining liability but at preventing the identified properties from being sold or otherwise disposed of before VFD has an opportunity to pursue its civil claim.
The company argues there is a real risk that the assets could be alienated, frustrating any future judgment in its favour.
“The applicant seeks an order preserving five identified immovable properties under the control of the first to third respondents pending the institution and final determination of civil proceedings for the recovery of R15.5m.”
At the heart of the dispute is a R20m convertible debt facility concluded in March this year between VFD and Elevate Investment Partners.
According to the affidavit, the funding was intended to finance Elevate’s acquisition of a 71% controlling interest in A2Pay Holdings. In return, VFD would ultimately convert the loan into a 50% shareholding in Elevate, establishing a joint venture between the parties.
The court papers state that VFD executives first met Ngwenya in October last year when he presented an investment opportunity involving Elevate and A2Pay Holdings.
Over several months, representatives of the Nigerian company allegedly met Ngwenya repeatedly in South Africa and Nigeria as negotiations progressed.
The affidavit says Ngwenya introduced himself as a representative of Elevate and played a central role throughout discussions surrounding the proposed transaction.
On March 30 this year, VFD transferred the R20m into Elevate’s nominated First National Bank account in accordance with the agreement.
Ngwenya responded by fabricating an explanation that the funds had been delayed as a consequence of South African Reserve Bank exchange control requirements … that explanation was entirely false.— VFD
The company says it believed several conditions had already been fulfilled, including that it had been registered as a joint signatory on the account and that the necessary capital contribution from Ngwenya’s side had been made.
According to the affidavit, the company later discovered Ngwenya was not, in fact, a director of Elevate despite allegedly presenting himself as its representative throughout negotiations.
The papers further allege that when VFD began demanding updates on the implementation of the transaction, Ngwenya repeatedly claimed the money had been delayed because of South African Reserve Bank exchange control requirements.
The company says he even furnished what was purported to be an Elevate bank statement showing the funds as being tied up in a foreign exchange process.
Investigators later concluded the statement had allegedly been altered.
“Ngwenya responded by fabricating an explanation that the funds had been delayed as a consequence of South African Reserve Bank exchange control requirements … that explanation was entirely false.”
According to VFD, banking records obtained during a subsequent police investigation revealed a very different picture.
The affidavit says subpoenas issued during the criminal investigation enabled investigators to reconstruct the movement of the money.
Rather than remaining in Elevate’s account for the intended acquisition, the entire R20m was allegedly transferred the following day into the bank account of Nisela Property SPV using the reference “Nisela VFD”.
The company alleges Nisela SPV had never featured in the negotiations and that it had no contractual relationship whatsoever with the entity.
A forensic tracing exercise later concluded that Nisela SPV was under Ngwenya’s control.
The affidavit alleges that almost immediately after the money landed in the account, it began flowing to numerous third parties over a relatively short period.
Among the transactions identified were a R5m payment to Strauss Scher, payments totalling R3.55m to Zim Group, R2.515m to Garic, R850,000 to Platinum Wheels, R1.57m to an account bearing the narration “Nisela” and various payments totalling R347,500 carrying the reference “Opulence”.
The papers further allege that “Opulence” is a trading name used by companies associated with Ngwenya’s daughter.
VFD contends the banking records demonstrate the funds were dispersed to recipients with no apparent connection to the acquisition of A2Pay Holdings.
“The bank statements demonstrate that the applicant’s funds were not utilised for the purpose contemplated in the agreement. Instead, shortly after their receipt by Nisela SPV, they were dispersed to numerous recipients who … had no apparent connection to the transaction contemplated by the agreement.”
The company says it eventually demanded repayment of the full R20m.
Court papers reveal that a partial payment of R4.5m was later received in June.
However, VFD says it accepted the payment without prejudice and continued to demand repayment of the outstanding balance.
The affidavit also records that correspondence exchanged between the parties attempted to characterise the dispute as an ordinary commercial disagreement concerning repayment of an advance.
VFD rejects that characterisation, insisting the matter involves fraud and the misappropriation of investment funds rather than a contractual dispute.
The company says it subsequently laid criminal charges with Sandton police, alleging fraud, money laundering, contraventions of the Companies Act and offences under the Prevention of Organised Crime Act.
According to the affidavit, those investigations culminated in Ngwenya’s arrest on fraud and money laundering charges.
The civil application also relies heavily on disclosures allegedly made by Ngwenya in an affidavit supporting his bail application.
According to VFD, Ngwenya confirmed under oath that he is the sole director and shareholder of Nisela SPV, controls numerous companies holding substantial immovable property interests, resides at a property owned by Nisela SPV in Bryanston and directly or indirectly controls a property portfolio valued at more than R31m.
VFD says those admissions proved instrumental in identifying assets against which preservation relief could be sought.
The company argues that when the disclosures in the bail affidavit were compared with banking records, company registrations and WinDeed searches, investigators were able to identify properties allegedly linked to the movement of the investment funds.
It now wants the high court to preserve those assets pending the outcome of its civil proceedings, arguing that unless restrained, there is a genuine risk they may be sold, mortgaged or otherwise placed beyond the reach of creditors before judgment is obtained.
The allegations contained in the affidavit have not yet been tested in court, and Ngwenya will have an opportunity to respond as the proceedings continue.