Durban attorney Ahmed Amod has been provisionally sequestrated following allegations that his trust account received millions of rand that have now disappeared.
The court application, brought by businessman Andrey Marimuthu, raised allegations of fake property sales at the upmarket uMhlanga Ocean View apartment building, The Pearls, implicating Amod and estate agents.
Marimuthu said he had paid more than R11m into Amod’s trust account on the advice of agent Shanell Sewpersad. The money that was supposed to be handed over to conveyancing attorneys for the purchase of several properties he bought after being told by Sewpersad they were “distressed sales”.
However, after being “fobbed off” by Amod for several months about the status of the transfers, Marimuthu, in his affidavit, said Amod then claimed the money belonged to his client, Sewpersad. It had nothing to do with property sales but was “investments and loans”.
He said he met Amod with Sewpersad, where the purchase of the properties was discussed, and alleged that the lawyer was complicit in a fraudulent scheme.
Amod, opposing the application, denied any knowledge of the so-called property transactions.
The sequestration application was heard by Durban high court acting judge Alpha Zwane in May this year.
He handed down his ruling on Friday, granting the provisional sequestration order and giving Amod until September 29 to show cause why the order should not be made final.
Zwane said Marimuthu, through his attorney, had eventually made two demands for the money to be paid back to him.
Amod, in his response, had denied that Marimuthu was ever his client. He admitted receiving the funds. He said he had opened a trust ledger account in Sewpersad’s name for the purpose of receiving the money.
Sewpersad had instructed him to pay R670,000 to Johnston & Partners. She then mandated him to pay out further money. She had told him they were “investments and loans”.
The granting of the provisional sequestration order will ensure that his insolvent estate is wound up in an orderly fashion and it will enable a trustee to recover funds paid out on the instructions of Sewpersad
— Acting judge Alpha Zwane
He, however, admitted the deposits were made with the reference “Andrey”.
“His stance is that the funds were received and administered on behalf of Sewpersad. He denies that he is indebted to Marimuthu,” Zwane said.
He said Amod had not denied receiving the funds. But, as an attorney, he was required, when he discovered anonymous and unexplained deposits, to transfer the money to a trust suspense account. He then had to trace the depositor with the aid of his own bank. He had to merely leave the money where it was until he received instructions by or on behalf of the depositor.
“The funds were not deposited by Sewpersad. The deposit reflected the beneficiary as Andray. Amod did not take instructions from [Marimuthu]. He took no steps to verify Sewpersad’s entitlement to the funds.
“In my view, Marimuthu is the owner of the funds,” Zwane said, noting there was no confirmatory affidavit by Sewpersad to support Amod’s assertion that the funds belonged to her.
He said Amod’s failure to pay the money back to Marimuthu was “indicative of the fact that he is factually insolvent”.
Zwane said Amod’s provisional sequestration might mean he would no longer be able to carry on with his practice and would cease to earn a salary or make drawings.
“His inability to pay R11m to Marimuthu simply means that his trust account is probably overdrawn. The granting of the provisional sequestration order will ensure that his insolvent estate is wound up in an orderly fashion and it will enable a trustee to recover funds paid out on the instructions of Sewpersad,” Zwane said, granting the provisional order.
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