High court grounds VBS bank debtor for Porsche Cayenne loan, R5m bond

The high court has flagged one of VBS Bank’s debtors trying to wriggle out of a luxury car debt and R5m bond.

VBS liquidator Anooshkumar Rooplal hauled Mmuso Solomon Pelesa before the high court in Pretoria to recover money the bank lent to him. Pelesa splurged the cash on an upmarket property in Midstream Estate, Ekurhuleni in Gauteng worth R5m, and a Porsche Cayenne GTS worth R1.55m which was “written off” in an accident.

Pelesa, who told the court he did “good work” for the bank, did not take the fight lying down. He lodged a counter-application in which he dismissed the loan agreements as “invalid, as he obtained credit without spousal consent as required by the Matrimonial Property Act”.

He pulled all the stops and even played the victim by accusing VBS of contravening the National Credit Act by recklessly lending him money, resulting in him “becoming over-indebted”. Pelesa told the court Rooplal had no case.

Rooplal told the court VBS “fell prey to an elaborate yet unsophisticated fraudulent scheme perpetuated by some members of its management and their related entities”.

The VBS scandal, which led to the bank’s demise, is detailed in a report compiled by advocate Terry Motau SC titled “The Great Bank Heist”.

Judge Norman Davis ordered Pelesa to pay his debt, plus interest, and slapped him with legal costs.

According to the 11-page judgment, Pelesa entered into an agreement with the bank to purchase the luxury vehicle on April 6 2017 and 12 days later signed the multimillion-rand mortgage credit agreement.  

“After some initial instalments had been paid by the respondent, the vehicle was ‘written off' in an accident, causing the insurance company to make payment of R1,319,000 to VBS on October 4 2017. After this Pelesa paid only one further partial instalment. The liquidator is claiming the balance outstanding of R200,722 (plus interest),” the judgment reads.

According to the judgment, after borrowing more than R5m from the bank, Pelesa built a “luxury dwelling” and his “now estranged” wife lives on the property.

In his argument, Pelesa detailed the alleged “fraudulent schemes” allegedly “perpetrated on VBS bank by its director and managers”.

“After raising these issues himself, [Pelesa] referred to his co-operation with criminal investigations conducted by the Hawks and concluded thereafter he was blameless of any wrongdoing and that these were arm’s length transactions,” the judgment reads.

Pelesa sought to dispute the facts in the vehicle finance litigation, “alleging some parts of [the agreement] had not been completed by him, but by some other bank official”.

“Significantly, however, [Pelesa] did not deny his signature on the application or deny the subsequent agreement,” the judgment reads.

“That VBS’ financial statements may have been manipulated does not mean all individual agreements are automatically implicated. Insofar as the respondent claims there is a factual dispute regarding ‘the authenticity’ (as he calls it) of the agreements, I find that no real or bona fide dispute of fact has been established which cannot be resolved on the papers.”

Davis found there was no merit in Pelesa’s reckless lending argument.

Pelesa told the court he had “fallen on hard times” after his income from Gorogo Projects, “which had done good work for the Venda king and VBS bank had dried up”. Based on his financial status, he argued regarding his over-indebtedness that his “agreements should be restructured and payment postponed for three years”.

However, in his judgment Davis said before his counter-application Pelesa had “failed to react to the notices sent to him”, which provided for “referral to a debt counsellor”.

“[Pelesa] has also not made any proposals regarding the basis upon which his debt should be postponed and how repayments should be restructured,” the judgment reads.

“He had been reminded in prior correspondence that courts have found a defaulting debtor, seeking relief by way of restructuring, should not seek to retain the purchased property while failing to make payment, but should consider avenues by which their debt could be liquidated. This would include the sale of the immovable property. [He] refused to even consider this option.

“[He] appears to simply throw himself at the mercy of the court, claiming over-indebtedness and a postponement of his liability.”

Davis also found that in his applications for credit, Pelesa “ticked the box ‘single’ in respect of his marital status” and confirmed his status, which VBS relied upon, under oath in an affidavit.

“The extensive credit check done by VBS indicated some risk due to previous judgments or unpaid accounts (which had been old and which risk had been assessed and resolved) but did not indicate any ‘joint loan participants’ in respect of any of the accounts or loans, including a previous vehicle finance agreement.

“The offer to purchase the immovable property in question was also only made by [Pelesa], again indicating himself to be single,” the judgment reads.  

“The only indication of a marriage is the handwritten certificate produced by [Pelesa] in his answering affidavit, issued by a marriage officer, indicating a fairly recent marriage on January 30 2017 (some 10 days before the offer to purchase and some three months prior to the agreements). No indication is given in the certificate as to the marital property regime applicable.

“The extracts from the marriage register produced by [Pelesa] are also incomplete, both in this regard and in regard to supporting documents. No indication has been given whether this marriage has been registered at the department of home affairs at the time of the agreements (or at all).

“It follows further that the contention that the liquidator had not made out a case should fail.”

Davis ordered Pelesa to pay R200,722. “plus interest at the agreed rate of 11.5%, calculated daily and compounded monthly in areas from February 29 2020 until date of full payment”.

Pelesa was also ordered to pay R6,247,582 “plus agreed interest at the rate of 10.50%, calculated daily and compounded monthly in arrears from February 29 2020 until date of full payment (both dates inclusive)”.