Banxso client accuses attorneys Mostert and Bosman of ulterior motives

Desiree Martin, a client of Banxso, has accused Pierre Du Toit of Mostert and Bosman of obstructing all efforts to recover funds from Banxso - claiming that while they risked losing money, Du Toit stood to benefit from the company's liquidation.

Du Toit is pursuing Banxso's liquidation, representing some of the clients his firm Mostert and Bosman represented.

Martin is one of Banxso's clients, a prominent online trading platform whose funds had been frozen as part of liquidation proceedings sought after another client, Carol Wentzel, raised allegations of corruption. 

Speaking to IOL, Martin said that she raised doubts around claims Banxso was a scam, arguing that those who took Banxso to court were risking their hard-earned funds should Banxso be liquidated.

“Does Carol Wentzel know she will not get one cent, but these attorneys will score big time? Is she aware that if this liquidation is pushed through, many investors like myself will lose the money still in the Banxso account…

“I stand to lose my R150,000! If Banxso wins its case, I can at least withdraw my R150,000, which I firmly believe Banxso will honour.

“These liquidators are, in fact, only seeing the profits they can make should this forced liquidation go through. From what I have read, they made millions and millions from doing liquidations,” she said.

Martin explained that she had never been made aware of the discussions between Banxso and the liquidators and their attorneys, arguing that she has a right to determine the course of action when an offer is being made.

“Trading is a risk; it is like gambling… sometimes we play and win, sometimes we lose. If she lost her money through trading it's because she was an active trader and before that, she won,” Martin told IOL.

IOL can reveal Banxso offered to secure funds equivalent to the alleged claim values of all intervening parties in the liquidation application against it. 

However, Mostert and Bosman rejected Banxso's offer of R57 million—funded directly by its directors—which would have guaranteed 100% repayment to the applicants if their claims were successfully proven.

This rejection occurred while they maintained a freeze on client funds despite a previous court order directing the release of the funds. 

Approached for comment, Du Toit said a security offer was made but rejected because it didn't make financial sense for the clients.

“In a nutshell, the offer to provide security does not assist any of our clients, as they will still be required to individually institute a High Court action against Banxso to obtain a court judgment for their claims. Banxso will oppose these actions. The legal costs of each action will be more than R1 million, and considering that an unsuccessful party will most probably utilise their right to appeal, each action will take between three to five years.

“If Banxso wanted to resolve the issues with our clients, it could simply have arranged for the payment of their claims and not the meaningless offer to provide security through its liquidity provider, which, as explained above, does not assist any of our clients in any manner whatsoever,” he said.

Last month, one of the female applicants who spoke to IOL on condition of anonymity confirmed she had not received Banxso’s offer and was not informed of the liquidity offer. 

“I’m aware the matter is set to be heard next month, but I'm shocked to hear that an offer was made. This was not communicated to me. If there had been such, then I’m pretty sure we would not have hesitated. The thing is... I’m sick and tired of this. I want to ensure that my funds are back and secure,” said one of the applicants.

At the time, Du Toit told the publication that any agreement regarding the costs is a matter of attorney-client privilege and will not be discussed in the public domain.

Meanwhile, The Financial Sector Conduct Authority (FSCA) provisionally withdrew the financial services provider license of the trading platform Banxso in October last year. Despite the Western Cape High Court's lifting of the preservation order on Banxso's accounts, the FSCA refused to authorise the release of these funds, leaving Banxso's clients in financial turmoil.

"Once the investigation is completed, the FSCA will comply with its disclosure obligations in s251 of the Financial Sector Regulation Act of 2017 (the FSR Act)," the FSCA told IOL.

Hanekom Attorneys, representing Banxso, told IOL they would not comment in detail on settlement engagements due to the matter's sensitive nature, arguing that the liquidators were aware of the liquidity offer made.

The Western Cape High Court is scheduled to hear the matter between Bansxo and its liquidators this month.

thabo.makwakwa@iol.co.za

IOL