August 22, 2013
Produced by Peter Moya
Moorgas Naranconna and his wife Hema had a dream of owning a chicken farm. In 2007 they approached Absa bank for a loan and their business plan was approved within a few months. They were now the proud owners of Mokunaa Farm, which was producing over 120 000 chickens every five weeks. However, they fell into arrears three years later.
They argue that as much as they had all the state of the art facilities to produce the chicken, the ‘chicken cartel’ monopolised the market and prohibited them from acquiring lucrative contracts to sell their products. A legal tussle began leading to Absa trying to liquidate them twice to no avail. In court documents seen by Special Assignment, Absa claims to have lost the original loan and the bond documents in a fire at their storage facility at Docufile, based in Johannesburg.
The fire is said to have occurred on 28 August 2008. Join us this week as we raise questions about the alleged discrepancies in the manner in which some banks conduct their relationships with their clients.
This is a follow-up to Part 1 of this series. In the first episode, we exposed the fact that some of the banks that claimed to have lost documents in a fire have in fact sold them to third parties in a process known as Securitisation. Despite this, some of these banks continue to present themselves as the owners of the loans. However, the law stipulates that the bank loses its legal standing to make any claim over that debt immediately when it sells its loan to third parties. In most cases, this is done without the client’s knowledge.
So were the original documents for Mokunaa Farm lost in a fire as claimed by Absa? Why have the records relating to this case allegedly disappeared from the court’s roll at the South Gauteng High Court? Can a client be sued by third party entities such as SPVs if their loans have been sold off or securitised?
We also reveal a Cape Town couple’s battle with First National Bank over a bond for their house. Adhill Abrahams and Zulfa Samsodien’s bond was sold off to a third party who has since succeeded in sequestrating them. What are the legal implications of this?
Are there are any regulatory failures by the Registrar of Banks and the National Credit Regulator that contribute to this state of affairs? We get the inside story from a whistle-blower, who claims that there are gaps in the monitoring system of the Reserve Bank.