Posted 01 September 2013
This story has so many interesting aspects, that one could write a whole column on each. From health professionals that invested in a product that claims to be a cure for AIDS, to false promises, to lies and deceit, to the number of investors and the amount of money they were prepared to invest in a product claiming to “cure” AIDS, based on no proof.
Note: “In what is believed to be the first case of its kind in South Africa, the shareholders are asking the Durban High Court for permission to liquidate Edge to Edge Global Investments, a public company. They allege the directors, Durban couple John and Kathy Ellis and Jan Louw of Pretoria, have “acted in a manner that is fraudulent or otherwise illegal” and accuse them of “misapplying or wasting” assets.” Not about the fact that the product has no proof that the claims are valid, it is about the abuse of money.
‘Duped’ investors want their R70m back
August 16 2013 at 11:08am
By Tania Broughton
Investors money spent on lavish wedding
Durban – South African and British investors who bought R70 million in shares in a Durban company that claimed to have patented a “life-changing” Aids nutrition pack, have gone to court accusing the directors of lying and stealing their money.
In what is believed to be the first case of its kind in South Africa, the shareholders are asking the Durban High Court for permission to liquidate Edge to Edge Global Investments, a public company. They allege the directors, Durban couple John and Kathy Ellis and Jan Louw of Pretoria, have “acted in a manner that is fraudulent or otherwise illegal” and accuse them of “misapplying or wasting” assets.
While they accept they have probably seen the last of their money, they say they want a liquidator to probe what happened to it and they want to stop Ellis and Louw from “duping” others.
The shareholders say they believed assurances that the company had the patent on the water-purifying drops in the pack and that their money was to be used in clinical testing to be carried out in Abidjan by Nobel Prize winner Luc Montagnier, credited with the discovery of HIV.
The agreement with Montagnier and a distribution agreement with the Africa Forum was professionally bound in a white book and was presented with a flourish at dozens of meetings in upmarket-coffee shops in uMhlanga and Pretoria. But, the shareholders say, no clinical trials have been done and a British company had the patent for the water drops.
Leading the charge in the urgent application – which was adjourned by Judge Trevor Gorven on Thursday to allow Edge to Edge to file opposing papers – is Tony Pinfold, chairman of Great Wall Motors (GWM) South Africa, who says he invested R8.4m in the company.
The home of John and Kathy Ellis in Marriott Road, Durban.
Fellow shareholders include controversial businessman Jabulani Mabaso – recently acquitted on government fraud charges – who invested R650 000 and a London businessman, Simon Moxon, who says he introduced Ellis and Louw to many other “leading figures” in the British capital, resulting in an estimated investment of £1.2m (R18.5m).
They all say they invested on the strength of assurances by Ellis and Louw that the money would be used to undertake the clinical trials, list the company on stock exchanges and grow the business.
A key component of the “immunity supplement combo pack” was the “blue gold” water-purification drops. Pinfold alleges he was told that Edge to Edge had a 50 percent shareholding in Blue Gold Water and Chemicals, which owned the patent for the drops.
He had since discovered this was not true.
Pinfold said when the promised period for the completion of the clinical trials ended in December, he realised something was “seriously amiss” and discovered that the company no longer occupied its premises, was trading without a company secretary, owed staff more than R2m, and was being pursued by the taxman for R15m.
Meanwhile, shareholder recruitment was continuing unabated at “coffee shop meetings”.
Pinfold said at the time that he bought the shares he had been unaware that Ellis had three previous convictions, now expunged, and that Louw had a 2001 judgment against him for R200m.
He said he did not make “serious allegations of fraud” against the directors lightly and had given them every opportunity to explain their conduct. But they had engaged in delaying tactics and obfuscation, including refusing to answer a list of 31 questions raised in a letter sent last month.
A “face to face” meeting to be attended by all shareholders, including those from England, was cancelled at the last minute.
Pinfold said it emerged that there had been no genuine intention that it take place because the venue, the Durban Country Club, advised that Ellis had cancelled the booking the week before, citing the death of “one of the presenters”.
Pinfold said last week Ellis and his wife had sent an e-mail to shareholders advising that “in light of the accusations and questions” they would be calling in their loan accounts in the company totalling R40m, claiming they had funded the company over 10 years.
“They rely on (former employee and chartered accountant) Jennifer Etchells to confirm what they state, but she is one of the applicants in this matter and does not agree or support their version… they do not explain where the alleged loan accounts come from,” he said.
“They could only have come from converting investors’ money into loan accounts.”
In a letter attached to court documents, a businessman said he had recently been pressured by Louw to purchase shares for R10m.
A shareholder, surgeon Dr Tommie Meyer, of Centurion, said that in June, Louw had offered him more shares for R5 each.
“He said after Montagnier’s research, this is a total cure for Aids, that he foresees that shares will be worth R100,” Meyer said.
“He said the company would be listing on the London, New York and Johannesburg stock exchanges.”
Tina Halstead, the attorney acting for the shareholders, told The Mercury they also intended to lay criminal charges.
“My clients would have liked to have seen the clinical trials completed because they believe the product has the potential to elevate the standard of living for those with HIV.
“They have accepted while they will in all likelihood never recover their investments they are not prepared to sit back and watch Ellis and Louw continue to live extravagant lifestyles,” she said.
The matter will be back in court next week.
[email protected] The Mercury
Photo from http://johnellis.wordpress.com/– Captioned: Jan Louw, JOHN ELLIS and Rafeek Evans