Arthur Kaplan liquidation was ‘a coup d'état’, says jewellery tycoon

The man accused of being at the centre of looting R50m in jewellery and watches from insolvent chain Arthur Kaplan jewellers has applied to have the liquidation reversed, describing it as a “coup d’état”. 

Arthur Kaplan director Hoosein Mohamed and co-director Althea Cloete have filed their rescission application in the Johannesburg high court. In their founding affidavit they claim: 

• The application for the liquidation order, made by Durban businesswoman Verushka Juggernath who had no enforceable claim, was fabricated and “the epitome of deception”;
• The serving of the order was purposefully hidden from them. They say they are the only directors of the liquidated businesses. Together they own 100% of Arthur Kaplan, have 34.99% shares in its holding company Luxe Holdings and jointly have 21.6% voting rights; 
• The appointment of liquidator Laila Motala was “not objective”;
• The alleged verbal loan agreement that sparked Juggernath’s liquidation application was an “orchestrated” cover-up as the “loan payments” were instead consignment withdrawal payments made in cash by a consultant, Fazel Bhana;
• The liquidation order was wrongly served on Luxe COO Tony Chammas, who was not employed by Arthur Kaplan; and
• The liquidation amounted to a forceful takeover of the business “in an underhanded and surreptitious manner”.

Relations between Mohamed and Motala have been fiery. Mohamed is on R100,000 bail after he was charged on June 1 with assault and pointing a firearm after a violent confrontation with Motala.

During his bail application hearing in the Randburg magistrate’s court, Motala filed an affidavit to the court accusing Mohamed of being involved in looting Arthur Kaplan stores. She detailed how CCTV footage revealed how Mohamed’s assistant Ammaarah Ismail had spirited away luxury watches and other jewellery worth about R50m in an audacious series of heists to hide them from liquidators.

The court heard how staff at the Umhlanga branch of Arthur Kaplan jewellers were allegedly “deceived” by Ismail into handing over stock worth millions of rand at a BP service station in Verulam, after telling them a robbery was imminent.

Motala also told the court Ismail had deceived an employee at the company’s Eastgate store into believing she had been authorised to remove high-value jewellery and watches. More stock was taken in a similar way from the company’s World’s Finest Watches shop in Nelson Mandela Square and Sandton City Diamond Walk store, according to court documents.

A substantial inventory of missing items, supplied by liquidators, includes diamond tennis bracelets, rings, necklaces and luxury watches including Tissot, Longines, Tag Heuer and Seiko brands. A Hublot watch valued at R408,000 and a diamond ring worth R823,999 are listed among the items missing.

A case of theft was opened at the Sandton police station. No arrests have been made.

And now, in a double whammy, the Johannesburg high court has found that Luxe Holdings is also insolvent, and on Monday appointed Motala to also wind up that business.

She was appointed just days after Cloete — who is CEO of Luxe — claims to have informed the JSE that she was planning to revamp and rename the business.

According to the separate court finding on the Luxe insolvency, jewellery manufacturers Richline SA applied for the liquidation, claiming they were owed more than R11m for stock supplied to Luxe stores in 2021 and 2022.

Thulani Ngubane, one of the directors of Luxe, told TimesLIVE Premium this week he had signed a payment agreement with Richline SA in December but Luxe had been unable to repay the money and was therefore insolvent.

Together with our attorney Mohseen Mayet and counsel Francois Botes SC, and our team of forensic auditors, we will uncover the truth, once and for all

—  Hoosein Mohamed, Arthur Kaplan director

He said the liquidation order had been served on the Luxe Holdings head office in Sandton, and this was how he had become aware of it. 

The ongoing Arthur Kaplan saga began last December, when Juggernath applied for the provisional liquidation of holding company Luxe and its subsidiaries NWJ and Arthur Kaplan. She said she had entered a verbal agreement with Arthur Kaplan last September to loan the business R1.975m, which was to be repaid in November but was not.

She told the court that on December 1 she was informed via WhatsApp that staff at Arthur Kaplan stores in Sandton were packing away stock and distributors had collected items worth R19m.

The court ordered a provisional liquidation and Motala and joint liquidator Gladys Ngobeni were awarded their certificates.

Mohamed and Cloete claim in their court application to rescind the liquidation of Arthur Kaplan that Juggernath never lent the business any money, that she was not present at the first creditors meeting and had made no claim. In their papers they invite her to disclose who represented Luxe and Arthur Kaplan in her alleged verbal agreement and to explain why the loans were cash deposits rather than electronic transfers.

Mohamed submitted that Arthur Kaplan, though in liquidation, generates R5m a month and employs 33 full-time staff. The liquidators had a “direct and substantial interest in the sale of the business as a going concern as they stand to earn 10% commission” he said. 

Mohamed, who has so far spent R3.7m on legal costs fighting the liquidation battle, told the court: “We have uncovered atrocities, fraud, theft and the highest level of deceit. What we want to achieve here is to follow a due and transparent process for a proper forensic investigation to be conducted.”

He described the liquidation was “an orchestrated coup d'état”.

If his application is successful, he said will be employing “the most competent private investigators money can buy” because it “appears the parties currently at the helm are pursuing their own agenda and everybody has a free card”.

“Together with our attorney Mohseen Mayet and counsel Francois Botes SC, and our team of forensic auditors, we will uncover the truth, once and for all.” 

Approached for comment, Motala said she rejected the allegation that her appointment was unfair, that she knew Juggernath, insisting her credit claim was genuine. She told TimesLIVE Premium she and her joint liquidator will oppose the application. They will put the true facts before the court and ask for the application to be dismissed with costs. She said they would continue the liquidation process in the interests of all the creditors of the estate. 

Lawyer Ruann Kruger said his firm had been instructed by Amods Attorneys, acting for Juggernath, to launch the liquidation application, and had settled this in line with the practice directive of the Pretoria high court division. 

He said they were not in a position to comment on the matter and that Juggernath would answer the allegations in her opposing papers, should she decide to fight it. 

The respondents have been given until October 11 to indicate their intention to defend the rescission application, and to file answering affidavits within 15 days.