Home NEWSBusiness The Untold Story of the Liquidation of Baba Danpullo’s Companies in South Africa (Part 3)

The Untold Story of the Liquidation of Baba Danpullo’s Companies in South Africa (Part 3)

by Atlantic Chronicles
AC
  • What Happened That Danpullo’s Bestinver Group Could not Repay by Monthly Installments Loans it Obtained from FirstRand Bank?
  • Even in Court, the Group was still given an Opportunity to pay Arrears for the Matter to be Dropped
  • But Danpulo’s Besinver rather ran behind Standard Bank for a Loan to pay the Arrears Owed FirstRand Bank, in Vain
  • The Story of Trying to Dig a New Hole to Get Soil to Fill an Old Hole, but to end up having a New Hole

Even after FirstRand Bank in December 2019 filed the applications for the liquidations of Baba Danpullo’s Bestinver Company South Africa Propriety Limited and the Group’s three affiliates, that is Leopont 193 (Pty) Limited, Joburg Skyscrapers (Pty) Limited, and Bestinver Prop 01 (Pty) Limited, the Group was still given a chance both by bank and  the court to save itself including its affiliates from being placed on liquidation.

The Attorneys of the First Respondent in the matter, Bestinver Group, and those of the Second Respondent, FirstRand Bank, continued to address correspondences to each side, though there was no substantial progress towards resolving the issue of the payment by Bestinver Group of all outstanding amounts under the current loan agreement.

Even when the matter went to court, Baba Danpullo’s Bestinver Group was still given an opportunity to save itself. There was an opening for Bestinver Group to resume the repayment of the loans by monthly instalments, even though FirstRand Bank insisted that the Group must pay in a lump sum all outstanding amounts under the loan agreement.

However, after paying the monthly instalment for a few months in 2020, Bestinver Group again started defaulting. The complaint this time around was that Coronavirus also known as COVID-19, had seriously affected the business.  The Group said that tenants occupying their buildings in the three cities where they were operating, that is Cape Town, Port Elizabeth and Johannesburg, had failed to pay rent because of the pandemic.

 

Yasmina Baba’s Affidavit At High Court In Cape Town

Yasmina Baba, one of the shareholders of Bestinver Group was at The High Court of South Arica (Western Cape Division, Cape Town) on June 18, 2020, where he declared as well as signed a 16-page affidavit.  The Commissioner of Oath that was present for that affidavit was Andile Seth (Attorney’s Commissioner of Oath).

Yasmina in the declaration blamed the new defaults on the loan repayment by the Bestinver Group to FirstRand Bank, on the COVID-19 pandemic.  Also, he was not certain when things will be better for the Group. Point No.27.1 of the affidavit of Yasmina Baba read: “The pandemic has caused the companies’ tenants to default on rental, and as a result, the Respondent’s companies have not paid the full monthly instalments due to FirstRand bank since April 2020”.  Yasmina Baba added in Point No. 27.2 that:  “The pandemic will probably continue to have negative effects on the companies “cash flow and their ability to meet their financial obligations for another few months”. Suffice to say that Yasmina Baba asked for a moratorium of six months.

 

FirstRand Bank Rejected Blame On COVID-19                                                                      

But in its reaction, FirstRand Bank did not accept Yasmina’s blame for the defaults in the loan repayments on the Coronavirus pandemic. The bank rather accused the Bestinver Group of playing games and being in bad faith. FirstRand Bank reminded the Bestinver Group that they were in court because the Group defaulted several times in the loan repayment in 2018 and 2019 when there was no Coronavirus.

At this point, FirstRand Bank made it clear that its long period of patience with Bestinver Group had come to an end. And so came the court ruling that approved FirstRand Bank’s four applications for the liquidation of Bestinver Company South Africa Propriety Limited and its three affiliates.

 

Danpullo Complaints Of Allege Unfair Treatment, But – – –

When Ahmadou Baba Danpullo himself appeared at the High Court in Johannesburg on December 8, 2020, where he presented the 20-page affidavit on oath, he also blamed the failure by the Bestinver Group to respect the programme for the monthly repayment of the loans, on Coronavirus. Danpullo accused FirstRand Bank of having allegedly treated his Group unfairly.  He fumed that whereas some clients of the bank that had obtained loans were given a break or granted a moratorium due to the Coronavirus pandemic that seriously affected businesses, the same bank refused to grant Bestinver Group the same treatment.

This is what Baba Danpullo said:  “it is my considered view that the First Respondent (Bestinver Group) has not been treated fairly by the Second Respondent (FirstRand Bank).  The First Respondent has not been treated equally like other businesses who like the First Respondent faced financial difficulties during the COVID-19 pandemic. The Second Respondent assisted them to ensure that their businesses stayed afloat”.

 

FirstRand Bank Rejects Accusation

However, the response of FirstRand Bank to the accusation that was raised by Baba Danpullo, was similar to the response that was given to Yasmina  Baba a couple of months before. The Bank said the situation of the other clients that Danpullo referred to, was very much different from that of Bestinver Group.

FirstRand explained that the other clients were companies that were regularly repaying the loans they obtained from banks, before COVID-19 came in early 2020 and put their businesses into difficulties. But the bank asserted that Bestinver Company South Africa Propriety Limited, the Group defaulted countless times in the repayment of the loans in 2018 and 2019, that is before the coming of COVID-19. The bank recalled that it brought the matter to court with the applications for liquidations in late 2019, which was before the outbreak of COVID-19.

 

The Long And Short Of The Story

So the long and short of the story is that Ahmadou Baba Danpillo took loans from the FirstRand Bank Limited in 2016 and 2017, and mortgaged his real estate companies for the loans. But less than a year after obtaining the second loan package, the Group started defaulting on the repayment of the loans in monthly instalments.  The situation dragged on that way up to late 2019, pushing the bank to file applications for liquidation, or better still placing the buildings that were owned by the real estate companies on sale.   That is what happens everywhere in the world, including Cameroon, when there are repeated failures to repay loans that were obtained on mortgages.

 

What happened That  Danpullo’s Group Could not Repay Loans?

This is the yet unanswered question or the puzzle in the story of Baba Danpullo’s Group in South Africa placed on liquidation by a court ruling, because of several failures that were registered in the repayment by monthly instalment of the loans that the Group took from FirstRand Bank in 2016 and 2017. Worthy of note that before 2016 Baba Danpullo (Bestinver Company South Africa Propriety Limited) had been treating with FirstRand Bank Limited for several years.

That was why the bank could grant the Group overdrafts, and especially the reason why the bank accepted to grant the Group two big loans in two successive years.  That was also probably one of the reasons why FirstRand Bank exercised a lot of patience with Bestinver Group over the several defaults in the repayment of the loans.

But what to happened that the Bestinver Group which was a thriving in business suddenly slumped to the extent that the Group could not repay loans and even an overdraft as well as being unable to pay taxes, remain the big question.

 

FirstRand Bank’s Observation

Meanwhile, back In May 2018, FirstRand Bank took a look at the records of Bestinver Group in line with the terms of the loan agreements. The bank realised that all was not well with the Group.  In the correspondence that FirstRand Bank addressed to the Bestinver Group on May 31, 2018,, after the meeting that the two parties had on May 29, the bank first observed that the business as of then was doing well, as the Group had just realized a surplus of R3 million.

But FirstRand Bank expressed concern that despite the surplus in monthly cash flow, the Group had not repaid the overdraft of R 5 million that it took from the bank.  The bank expressed deep concern that there was pressure on the cash flow of the Group not only for maintenance and repair works on the Group’s buildings but also for what it said was “the extent of the Group’s cash flow commitment to the family and other non-operating requirements”. The family mentioned in the excerpt was of course the family of Baba Danpullo. So the family was getting money for private use directly from Bestinver Group’s coffer. So also was money that was going for other things.

Here is an excerpt of the concerns that FirstRand Bank raised in the correspondence that was addressed to Bestinver Group on May 31, 2018, after the meeting on May 29 when the records of the Group were examined by the bank:  “Though cash flow visibility was limited, there was clear pressure given that notwithstanding the monthly cash flow surplus in excess of R 3 million, the temporary overdraft could not be repaid and there were concerns in respect of repairs, maintenance and capital expenditure obligations on cash flow as well as THE EXTENT OF CASH FLOW COMMITMENT FOR THE FAMILY AND OTHER NON OPERARING  REQUIREMENTS”.

 

What Baba Danpullo Said In Court

In the affidavit that Baba Danpullo gave on oath at The High Court of South Africa, Gauteng Local Division Johannesburg on December 8, 2020, he declared that his business which was thriving in South Africa, ran into problems in 2016 when his Bestinver Group acquired a building in Cape Town. But he did not give any details as to what happened.

This is what Baba Danpullo said: “The First Respondent has existed in South Africa for over thirty years, with solid business operations which continuously thrived for over thirty years, and during the many years of business activities, the First Respondent has entered various successful business partnerships with financial institutions, until the acquisition of the last commercial building located in Cape Town”.

Richest Man In Francophone Africa?

Ahmadou Baba Danpullo is being presented by some media organs as the richest man in Francophone Africa.  The first question that comes to mind then, is why he did not save his real estate companies in South Africa from being placed on liquidation, by paying the money that FirstRand Bank insisted upon. That is the payment of the outstanding amounts under the loan agreements.

It should be noted that the agreement for the loans that Bestinver Group obtained from FirstRand Bank in 2016 and 2017, was signed by Baba Danpullo himself on behalf of the Group.  The agreement included the terms under which Bestinver Group obtained the loans from FirstRand Bank. When the Bestinver Group was defaulting on the repayment of the loans by monthly instalments as contained in the two loan agreements,  FirstRand Bank addressed some of the correspondences to complain about the several defaults,  directly to Baba Danpullo. But he took no measure to redress the situation.

Even when the matter went to court, the supposedly richest man in Francophone Africa (Danpullo) could not still raise money from his supposedly big businesses across the African Continent, to pay the areas of the debt repayment, that is the outstanding amounts under the loans agreements.  Rather, Danpullo’s Bestinver Group instead tried to borrow money from Standard Bank to pay for the debts in FirstRand Bank.  That is, trying to dig one hole to use the soil to fill another hole, but at the same time creating another hole. Richest man in Francophone Africa!!!

 

By Joe Dinga Pefok  (Uncle Joe)

Facebook: The Mentor

Email: djpefok@yahoo.com

Contacts – Telephone / WhatsApp:  (237) 677 17 54 51 / 699 71 82 92

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