A chance meeting in Paris, where a St Francis Bay businessman and an Abu Dhabi investor struck a multi-million-rand deal, has led to a probe into the folding of a yacht company that has left investors out of pocket – and without their promised luxury catamarans.
The final winding up of Tag Yachts 50 SA is now in the hands of a liquidator appointed by the Master of the High Court in Port Elizabeth.
A forensic report commissioned by businessman Sultan Ahmed Ghunoum Al-Hameli, which forms part of court papers, details how directors of the company allegedly used money from one investor to satisfy the next, until they could no longer keep afloat.
Applications were brought before the Port Elizabeth High Court by an Australian couple, an Argentinean steel company CEO, a Swiss private equity adviser and Al-Hameli.
All claim they paid millions to either Tag Yachts 50 SA or Tag Yachts SA.
St Francis Bay businessman Tim van der Steene is a director of both companies.
Payments were made between September 2013 and May 2017. Van der Steene has denied any wrongdoing.
Liquidator Sean Johnson said an inquiry had been convened for Tag Yachts 50 SA, giving him power to subpoena witnesses to determine if there was any wrongdoing.
“The matter has been set down for an interrogation.
“Subpoenas will be issued in due course,” he said this week.
Less than three years ago, Tag Yachts was lauded by former Nelson Mandela Bay Chamber of Business CEO Kevin Hustler, who said Tag’s know-how and business model could provide the blueprint to expand shipbuilding in the Bay.
Sydney partners Wayne Saunders and Fiona Searson said they invested their life savings in a yacht – a total of R9m – between February 2016 and August 2016, but the money allegedly “vanished” and all they got was an engine, steering wheel and a few winches.
Chartered accountant Imraan Lockhat, of Lockhat Incorporated, was appointed by AlHameli to try to trace the R20.4m he invested in Tag Yachts 50 SA.
Lockhat said investigations showed money had allegedly been misappropriated and used to finish other yachts.
Millions of rands were also allegedly paid from Tag Yachts 50 SA to Tag Yachts SA in order to settle its debts, without AlHameli’s consent.
Tag Yachts SA is, meanwhile, undergoing business rescue.
Lockhat said Al-Hameli had attended a yachting show in France in 2013, where he met Van der Steene and marine architect Greg Young, who had a yacht on display.
“He was interested in the Tag design and taken sailing by Van der Steene and Young,” Lockhat said in an affidavit.
They told him the Tag 50 yacht was a new design.
At the time, Lockhat said, Ryan Osborne was Van der Steene’s financial director.
Al-Hameli signed a letter of intent with Tag Yachts SA on September 28 2013 and paid a deposit of $15,000 (now about R219,714) for the construction of a yacht.
“As a first-time purchaser of the Tag 50 yacht, which enabled them to launch the project, Al-Hameli suggested . . . he be allowed to take control of shares in Tag SA,” Lockhat said. Van der Steene refused. Al-Hameli instead accepted a 15% discount on the launch price. Al-Hameli became more interested in the yacht-building operations and ultimately signed a number of agreements with Van der Steene, leading to a new company being formed – Tag Yachts 50 SA.
“Al-Hameli invested in Tag Yachts 50 SA entirely on the basis of Van der Steene and Young’s representations, which included a viability study.
“Al-Hameli’s part of the bargain was to invest in Tag Yachts 50 SA which, in turn, would construct a yacht for him at cost, the profit portion being treated as a return on his investment, ” Lockhat said.
“As costs were incurred, AlHameli’s investment in Tag Yachts 50 SA would cover the interim payments.
“In essence, his money would only be paid from Tag Yachts 50 SA to Tag Yachts SA when the work was performed and a liability to pay arose.”
Al-Hameli was promised the design, performance specifications, tooling and engineering of his yacht would be ready from June 2014, with construction starting the next month.
He paid more than R8.6m, on condition the money would be repaid over the next three years.
In addition, he became a 30% shareholder and director in Tag Yachts 50 SA.
Several further cash loans to Tag Yachts 50 SA followed.
But concerns led to an investigation.
“Lockhat Incorporated conducted an investigation of the Tag Yachts 50 SA books.
“Various payments have been identified which indicate possible theft,” Lockhat said.
He found further:
● Payments were allegedly allocated as a salary to Osborne via a journal entry in the amount of R514,742 on February 28 2017 from Tag Yachts 50 SA’s bank account;
● Three direct payments – R16,000 on May 17 2014, R12,431 also on May 17 2014 and R77,458 on June 30 2014 – were made to Van der Steene, allegedly without any invoice or supporting documentation; and
● Van der Steene made a payment of R182,400 for an item referred to as a CMC machine, which was recognised as an asset in Tag Yachts SA and not Tag Yachts 50 SA, but purchased with Tag Yachts 50 SA’s money.
Lockhat said e-mails also emerged in which Young – who could not be reached for comment – became critical of Tag Yachts 50 SA’s management.
On advice of lawyers and accountants, a shareholders’ meeting was held at Tag Yachts SA in St Francis Bay on January 26 2017.
It is alleged that Van der Steene told the shareholders Osborne was sick and could not continue with Tag Yachts 50 SA or Tag Yachts SA.
“Osborne is not too sick, however, to work for Bodotex, which is geographically about 100m from the Tag SA factory,” Lockhat said.
Saunders said he and Searson entered into a contract with Tag Yachts 50 SA in February 2016 for the construction of a yacht and on August 10 2016, Searson went to check on the progress.
“Various boat components were shown to her but it was not clear if these were to be incorporated into the yacht we had ordered,” Saunders said.
“On or about August 29 2016, I came over to view progress on the boat.
“I was astounded to note that despite the significant sum of money I had paid, there was little to show for my expenditure,” he said, adding that he then found out Tag SA was under business rescue.
He said it emerged that what had been shown as components for their vessel were allegedly parts from various other vessels.
Argentinean Eduardo Guislain, CEO of steel company Comercial del Acero SA, and Christof Zuber, a Swiss private equity adviser and investor, took both Tag Yachts 50 SA and Tag Yachts SA to court in 2017.
This was done to force a handover of their yachts that were still under construction.
Their joint application in the high court was successful in September 2017.
In an affidavit, Zuber said he had purchased a Tag 50 while Guislain bought a Tag 60.
Payments were made as progress on Zuber’s yacht was meant to be made.
Despite all the payments, the yacht was only 70% complete.
“It was clear my funds had been used for purposes other than the construction of my yacht,” Zuber stated.
Businessmen deny any wrongdoing
St Francis Bay businessmen Tim van der Steene and Ryan Osborne have denied any wrongdoing in response to allegations contained in a forensic report on their yacht businesses, one of which has been placed in liquidation.
The report, commissioned by Abu Dhabi businessman Sultan Ahmed Ghunoum AlHameli, who invested in Tag Yachts 50 SA, alleged that various payments had been identified which could indicate possible theft.
The report also alleged directors used money from one investor to construct the yacht of another.
It further stated Van der Steene received payments totaling R105,889 between May 17 2014 and June 30 2014, allegedly made without any supporting documentation.
“My rights with regard to damages which may be suffered by me pursuant to the publication of defamatory allegations shall remain reserved,” Van der Steene said.
“The disputes between parties ought to be adjudicated pursuant to due process of law.”
The report claims that payments were allocated as a salary to Osborne via a journal entry in the amount of R514,742 on February 28 2017 from Tag SA’s bank account.
Osborne said: “The affidavit by Imran Lockhat does not contain any allegation of theft.”
He said Tag Yachts 50 had been placed in liquidation.
“You are welcome to contact the liquidators who will confirm that there is no allegation of theft against me or any evidence in this regard.
“I . . . decline to reply to your questions as the matter is under investigation by the liquidators of the company.”
In a follow up e-mail, Osborne said:“The amount of R514,742 in fact relates to the allocation of management expenses [and] not a payment.
“This amount did not comprise solely of the salary paid to me by my employer Tag SA.”
He said based on the report’s findings – which showed the business model was changed twice by Al-Hameli – it was understandable for cost allocations to be disputed.
“This is by no means theft but allocations of actual expenditure where it is evident an agreement on the method of allocation could not be reached.”
Lawyer Sean Johnson, who is dealing with the administration of the liquidation, said allegations from all parties would be integrated.