Wednesday, January 26

R77m’s rescue plan for Africrypt could cause the Cajee brothers to avoid criminal prosecution

In what has been described as a ‘get out of jail free’ card for the Cajee brothers, liquidators of the failed Africrypt crypto scheme say an unidentified investor has proposed to accumulate $ 5 million (around R77 million) for a 51% stake in the company. – provided that all criminal proceedings against the Cajees are withdrawn.

Creditors can vote on the offer in compromise on Friday, November 12.

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One creditor, who asked not to be named, described it as a “bold” offer.

As Moneyweb previously reported, Raees and Ameer Cajee have a history of ‘hacks’ against their various crypto schemes, the first was in May 2019 and then again earlier this year when an amount of around R200 million was allegedly hacked. and removed.

Although the Cajees have stuck to the hacking story, forensic investigators are less sure.

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The compromise offer presented to the creditors proposes to pay $ 4 million (R61.6 million) for the payment of the creditors’ claims, which are estimated to amount to approximately R200 million, and another $ 1 million (R15.4 million) as capital in order to continue the business.

The anonymous investor who wishes to inject $ 5 million into the business will receive 51% of the Africrypt shares, and the balance of the shares will go to creditors in proportion to the balance of their claims.

The proposal also includes the hiring of the two Cajee brothers by the company. In addition, it requests that one of the liquidators, Eugene Januarie, be appointed to the board, along with a designated person representing the investor.

One of the conditions of the offer is that the criminal charges brought by the creditors against the Cajees be dropped and that they instead accept alternative dispute resolution.

Ruann Kruger, legal representative for the liquidators, said he did not want to comment on the compromise offer before Friday’s meeting with creditors.

A creditor contacted by Moneyweb, who asked not to be named, described the offer as “absurd.”

“It’s a ‘free get out of jail card’ for the Cajees. Who would invest in a business like this as if it had any credibility or chance of success, other than someone very close to the Cajee family? ”

There is still no certainty about the value of the claims against Africrypt, and the R200 million figure given by the liquidators represents the deposit amounts, not the subsequent value of the deposited cryptos.

Bitcoin is up about 200% over the last year and Ethereum over 1000%. It means that investors in Africrypt, who were offered 10% per month, have potentially lost hundreds of millions of rand.

Read: Bitcoin Surpasses 1 Million Rand – Where Are We Going?

The offer requires 75% creditor support to be accepted, at which point a court order will be issued.

Another creditor told Moneyweb that the offer is likely to be accepted by 75% of the creditors, as the alternative is to receive nothing.

While creditors will waive their rights to file criminal charges against the Cajees if they vote in favor of the offer, law enforcement authorities and ordinary citizens may have a different opinion.

The Cajees lived a great life before their companies collapsed, and despite being in their twenties, they seemed to have enough money to buy several luxury cars and homes, and then brag about it on social media.

“This proposed compromise certainly comes at a convenient time considering the current prices of Bitcoin and Ethereum,” says attorney Darren Hanekom, who represents several creditors.

“We trust that the general body of creditors will make the correct decision when the proposal is put to a vote,” he adds.

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