Banxso Liquidation Under Fire as Major Creditor's Attorney Raises Serious Irregularities and Whistleblower Evidence Points to Hidden Arrangements

The liquidation of Banxso has been thrust into turmoil following a forceful intervention from Attorney Kobus Senekal of F.J Senekal INC, acting for the estate’s largest creditor, alongside whistleblower evidence revealing private discussions about how the liquidation was orchestrated. Together the disclosures point to a process increasingly struggling to maintain public confidence.

Senekal’s letter, delivered to the provisional liquidators on 28 November, sets out a detailed challenge to the procedural integrity of the estate. Central to his concerns is the liquidators’ intention to pursue their own section 417 inquiry in a manner that avoids compelling the original applicants to testify under oath. A section 417 inquiry under the Companies Act of South Africa permits liquidators or creditors, via an independent commissioner and counsel, to compel sworn evidence and the production of documents to uncover the facts surrounding a company’s demise.

According to the letter, the liquidators’ proposed inquiry would shield the very applicants who sought the liquidation from examination, despite their central role in the events preceding the application. For this reason, Senekal’s client applied for an independent 417 inquiry, which the court has now granted.

In a development that Senekal characterises as deeply troubling, the estate’s legal practitioner, Pierre du Toit, who initially undertook to not oppose the creditor’s inquiries, is now preparing to launch an application to quash it. Senekal suggests this reversal indicates that those who initiated the liquidation “are not willing to have their actions tested under oath”.

These concerns are intensified by Rule 58(8) of the former Law Society of the Cape of Good Hope, incorporated into Government Gazette Notice 168 of 2019, which provides that:

“A legal practitioner who has accepted a brief from a liquidator or from a trustee of an insolvent estate shall not at any time accept a brief to act in any capacity for any interested party in subsequent proceedings in the liquidation or the insolvency.”

Senekal warns that this rule strikes directly at the conduct now unfolding within the Banxso estate. Having represented the applicants in bringing the liquidation, du Toit now represents the estate. According to Senekal, this position is plainly irreconcilable with Rule 58(8) and renders any attempt by du Toit to oppose the creditor-driven inquiry “entirely untenable”.

Funding Raises Further Conflict Concerns

A critical issue being raised involves the funding of competing inquiries. A source notes that Senekal’s client is personally paying for the entirety of the independent 417 inquiry. By contrast, the counter-inquiries initiated by the liquidators are being financed entirely out of the funds seized in Banxso’s bank accounts following the liquidation — funds that belong to creditors.

Speaking to IOL the source said the arrangement means that “creditors, whose money has been frozen, are now involuntarily paying for an inquiry designed to exclude the very individuals who sought the liquidation, this without answering who that money really belongs to. The big question no one has asked yet is do the funds that were frozen in the accounts belong to individuals or does it belong to the company and therefore forms part of the creditors pool”. They described the imbalance and unanswered questions as “deeply disturbing”.

Missing Documents and Unanswered Requests

The letter goes on to address serious gaps in transparency. Senekal records that he formally requested the requisitions and supporting documents that the law firm Mostert & Bosman claims were filed by the applicants to support the liquidation. None have been supplied.

As Senekal writes in the letter, “We have to date received no copies of the requested data and therefore begin to assume that they therefore do not exist.”

He further confirms that he requested all invoices, proof of payments for services allegedly rendered, and documents relating to security deposits Mostert and Bosman claim were made by the applicants. None of these have been provided either.

Senekal told this publication that the refusal to produce the documents “cannot be dismissed as oversight”, adding that the continued silence “raises unavoidable questions about what was engineered and by whom”.

He emphasises that since 28 November there has been “absolute silence. Not a response. Not a clarification. Not a single document”.

Applicants' Settlements Before Liquidation Finalisation Raise New Red Flags

The letter also reveals that several of the very applicants who brought the liquidation application reached substantial settlements with Banxso before the liquidation process was finalised. According to sources, certain applicants received more than R1.5 million in cash settlements relating to complaints they had already lodged with the company prior to the liquidation being launched. The largest single payout, they note, was more than R800,000.

Senekal argues that this creates a profound conflict for du Toit. Having represented these individuals in initiating the liquidation, du Toit is now, as the estate’s legal representative, required to investigate — and, if necessary, recover — the very funds paid to them shortly before the liquidation was made final.

“It places him in an impossible position,” Senekal told this publication, stating that any practitioner in such circumstances would be forced to choose between duty to the estate and loyalty to those whose claims he previously advanced. Rule 58(8), he says, exists precisely to prevent situations of this nature.

Whistleblower Audio Suggests Applicants Were Recruited

The pressure on the estate intensified after a whistleblower came forward with a recording in which one of the applicants describes how they became involved in the liquidation.

Asked how the process began, they say they were approached by Mostert and Bosman. “Yeah and they said would you like to join and I said well I don’t know how does it work, and he said well we will charge a fee and we will try stop them furthering their process.”

Most strikingly, when asked whether they had to pay the firm directly, they replies, “Well they not charging me, it’s gonna get taken out as a cut from whatever they can recover.”

Speaking to this publication, Senekal said the alleged recording aligns “exactly with the concerns raised” in his letter and reinforces the necessity of a full inquiry with compulsory evidence under oath.

An Industry Expert Says the Pattern Is Well Known

A senior insolvency expert in Cape Town, who requested anonymity due to fear of industry reprisals, said the emerging pattern is “the oldest play in the book”. The expert explained that once certain practitioners have influenced the initiation of a liquidation, “they gain control of the estate and then invoice the funds out at exorbitant rates, double time, until the pool is diminished.”

The expert added that the Banxso matter “appears to be following the pattern with disturbing precision”, warning that “the Master’s Office will eventually have to answer difficult questions about its role, and how it has become entangled in relationships with certain practitioners and their legal teams.”

A Process Struggling for Legitimacy

For Banxso’s thousands of clients, the stakes could not be higher. Their funds previously frozen now form the backbone of litigation fees, the estate’s strategy is being fiercely contested, and competing inquiries now threaten to expose the alliances and motives that shaped the liquidation.

What remains most striking is not only the contents of Senekal’s letter but the ongoing silence from those it addresses. With no documents supplied, no responses provided and the whistleblower recording now making its way into the public, the liquidation faces a crisis of credibility with no immediate remedy in sight.

Senekal end his letter by stating strongly that should Pierre du Toit proceed with his application to quash the independent inquiry, he will oppose it and seek a personal costs order against him.

* IOL requested comment from Mostert and Bosman and this article will be updated as soon as it is received.