Receiver Files Emergency Application in South African Court Seeking Legal Recognition and Immediate Access to Evidence

The Receiver began taking steps to secure WexTrust assets in southern Africa shortly after being appointed. The Receiver sought the cooperation of the individuals who have managed WexTrust interests in South Africa. However, those individuals have refused to cooperate. Moreover, the Receiver's investigation has uncovered evidence that calls into question the integrity of individuals involved in managing those interests. Accordingly, the Receiver has taken legal action in South Africa to carry out his mandate.

As a result of actions taken by defendants Steven Byers and Joseph Shereshevsky, WexTrust interests in southern Africa are owned or controlled, directly and indirectly, by Pure Africa Minerals (Pty), Ltd. (“PAM”), one of numerous South African companies that received at least $40 million in WexTrust investor funds. PAM is controlled by Michael Francois van der Merwe, a South African national, together with Byers and Shereshevsky. Van der Merwe participated with Byers and Shereshevsky in soliciting funds from WexTrust investors and transferring those funds out of the United States. Byers, Shereshevsky and van der Merwe are the sole members of the board of directors of PAM. The Receiver has learned that Sybrand Louwrens Hanekom, another South African national who purported to be a chartered accountant and registered auditor of PAM, was convicted of misappropriation of client funds by the S outh African authorities, and has been permanently disqualified as a public accountant and barred from holding himself out as a registered auditor.

The Receiver, acting under the legal authority of the United States District Court in New York, has appointed new directors to the board of PAM, which is majority-owned by U.S. entities that are part of the receivership estate. The new directors have demanded access to the books and records of PAM and its affiliates in South Africa, to which they are entitled under South African law. However, van der Merwe, Hanekom and their associates have refused to recognize the authority of the new directors, and have denied access to the books and records of PAM. In addition, on September 16, 2008, a South African company that is believed to be controlled by van der Merwe filed a liquidation proceeding against PAM.

On September 23, 2008, the Receiver filed an emergency application in the High Court of South Africa against PAM and other entities owned or controlled by van der Merwe and his associates (For a copy of the emergency application click here ). The application seeks legal recognition of the Receiver's authority in South Africa and immediate access to books and records concerning WexTrust interests in Africa. Receivership counsel have requested that the court conduct an expedited hearing on September 30, 2008.