STATUS Capital Building Society is currently operating on a skeletal structure, with no properly constituted board of directors in place.
The issue emerged during discussions at a meeting of permanent shareholders and investors held on Wednesday.
During the talks, it became apparent that the institution had no active board and was being run by only a few remaining officials.
Permanent shareholders and investors convened the meeting where they resolved to oppose the provisional liquidation of Status Capital. Members received an update on the state of the institution, a legal briefing from advisors, and passed a resolution to challenge the court order placing the entity under provisional liquidation.
During the meeting, members were informed that while Status Capital still has its own legal representatives, it no longer had a board of directors.
The only remaining operational personnel were identified as Otto Dlamini and a few clerks. Members were told that a board had been elected in July 2023. However, some of those elected to serve did not pass the required assessments. Following this outcome, no further appointments were made, resulting in the absence of a duly constituted board.
Members were further informed that the lack of a proper governance structure had affected the functioning of the institution’s operations.
The meeting also heard that former Managing Director Michael Mbetse had won several court cases where his leadership of Status Capital was challenged, although multiple appeals continue to be pursued against him.
Discussions at the meeting also reflected that different groupings of stakeholders had previously been meeting separately regarding the matter. Members indicated that they had since recognised that they were speaking in one voice, leading to a unified engagement. It was stated that this convergence resulted in the engagement of different legal representatives, including Dynasty Inc Attorneys and advocate Banele Ngcamphalala.
The meeting took place against the backdrop of ongoing High Court proceedings initiated by the Financial Services Regulatory Authority (FSRA), which sought the winding up of Status Capital. In an affidavit filed in support of the liquidation application, FSRA Chief Executive Officer Ncamiso Ntshalintshali stated that the fundamental basis for the application is that Status Capital never conducted business as a building society.
Investigations
Ntshalintshali said investigations revealed the institution was used as a conduit through which money was collected from the public and paid to related entities in which the directors had an interest, control or influence. He said the monies paid to these entities had not been repaid, except for payments recently recovered by court-appointed curators.
The affidavit further stated that Status Capital had failed to meet its obligations to investors, is insolvent, and cannot conduct business as it cannot meet its financial commitments to depositors.
FSRA said Status’ licence was subject to revocation on the basis that it was never genuinely involved in building society business, but instead operated as a money laundering pyramid scheme.
Members resolved to challenge the provisional liquidation order and indicated that legal avenues would be pursued as the matter continues before the High Court.
