Africrypt brothers claim to have received ‘numerous’ death threats

By Stephen Timm
Johannesburg, 29 Jun 2021

Africrypt directors Ameer and Raees Cajee, who shut their crypto investment platform in April over an alleged hack, claim they “did not run away from South Africa” and that they fear for their safety, having received “numerous” death threats.

The two disappeared more than two months ago after claiming the company had suffered a hack, leaving investors millions of rands out of pocket.

“We did not run away from South Africa as per the media allegations,” Ameer, 18, told ITWeb in an e-mail yesterday. “It was a matter which put the safety of our lives at risk.”

He declined to say where he and his brother, Raees (21), were because of what he said was “the nature of the situation and the risk pertaining [to] our personal safety”.

Following their announcement of the hack, Cajee said the two had received “numerous death threats” which he said then turned into “attempts”. This, he said, included numerous threats made by “organised crime syndicates in Cape Town”.

“Many of our family members were approached and threatened; in one instance a family member of ours was approached by a man who claimed to represent a list of 25 clients. This gentleman proceeded to request that we pay $1.5 million to a Bitcoin wallet address or risk being ‘silenced’,” said Cajee.

Unlawful entry

He said in one incident, an investor, Juan Meyer of Badaspex, a company which represents various Africrypt investors, had “unlawfully” entered his private residence and made threats before he was escorted off the premises by security.

Badaspex’s attorney Gerhard Botha, however, called the allegations “nonsense”. He said Meyer had gone to the Houghton Hotel on 8 April to confront Cajee and that he was led away by security half an hour later.

“He wanted to understand why the payments [to investors] had not been effected as he was told by Cajee they would be made by 6 April,” explained Botha.

Botha questioned why Cajee had not reported the alleged incident to police.

Furthermore, he said Meyer’s visit to Cajee was mentioned in Badaspex’s liquidation application, to which the brothers had been privy. He questioned why the brothers had not mentioned these allegations in responding papers.

Badaspex was successfully granted a provisional liquidation order on 26 April by the Gauteng South High Court against the Cajees, who have until 19 July to argue against the liquidation.

When asked why investors had not lodged charges with the police but had sought a liquidation application instead, Botha said investors had opted not to do so as Africrypt was still a going concern and doing so risked having the Cajees move money out of the company.

He added that investors had contacted various regulatory authorities, which he did not name, but these authorities had not responded to investors.

However, earlier this month, the Financial Sector Conduct Authority’s (FSCA’s) head of enforcement Brandon Topham said the FSCA is now investigating Africrypt, after closing an initial case it had opened on the company, because it lacked jurisdiction to investigate it.

Auditor false claims

Meanwhile, law firm Norton Rose Fulbright told ITWeb that it had ditched Africrypt in March over what it says were false claims made by the company’s CEO Raees Cajee, including that accounting firm Deloitte was acting as its auditors.

Deloitte confirmed it had not been appointed to act as Africrypt’s auditors and had provided only regulatory advice.

Norton Rose Fulbright’s head of compliance Hugh Bisset said that on 13 August 2020, the law firm was approached by Raees Cajee to provide regulatory advice.

He said in March, the firm’s compliance team was informed by two people who had attended presentations by the Cajee brothers that Norton Rose Fulbright were Africrypt’s attorneys, and Deloitte its auditors.

“We immediately carried out an investigation, which revealed that Deloitte was not Africrypt’s auditor, and that, in fact, there was no auditor appointed, and that there were serious allegations in an investor blog regarding Africrypt,” he said, referring to allegations contained on a MyBroadband forum started in December last year.

“We wrote to Raees Cajee on 21 March telling him that he was not to use our name again; that we required an explanation for various apparently suspect allegations on his LinkedIn profile, including that he was an alumnus of Witwatersrand University; and, of course, the false representation regarding Deloitte, and that we would not act further until these requirements were satisfied and we had sight of audited financials. There was no response,” he said.

“To our knowledge, Deloitte’s only dealings with Africrypt were similar to our own; ie, that they approached Deloitte for limited regulatory advice. It seems that Africrypt used our, and Deloitte’s, names in order to establish a veneer of respectability,” Bisset said.

Deloitte’s spokesperson Yolisa Tyantsi confirmed the company had not been appointed to act as Africrypt’s auditor.

She said the company was instead engaged and contracted by Africrypt from 3 December 2020 to 31 May 2021 to advise Africrypt on legal compliance requirements, which included the drafting of five regulatory compliance documents.

“Deloitte has not provided Africrypt with any audit or due diligence services, and has not worked with or engaged with Norton Rose Fulbright in rendering any services to Africrypt,” said Tyantsi.

Commenting on these allegations, Ameer Cajee denied Africrypt had falsely represented Deloitte as the company’s auditor.

“At no point did any Africrypt staff or representatives claim Deloitte was the company’s financial auditor, as well as it never being claimed on any official Africrypt documentation. Further, it would be a blatant conflict of interest if Deloitte had been auditing our financials as they were responsible for our internal governance,” he said.

He also denied that his brother, Raees, had stated on his LinkedIn profile that he was an alumnus of Wits University, saying it was “a widely known fact” that Raees had no university experience.

A search by ITWeb failed to bring up Raees Cajee’s LinkedIn profile.

Clarifying the losses

Cajee also claimed the amounts circulating in the media of Africrypt investors’ total losses from “the breach” – including a figure of $3.6 billion – “are totally false”. “As per the liquidation order, R66.8 million has been claimed,” he said.

Botha confirmed that Badaspex had put in a claim for over R66.8 million – being the amount that the investor had physical proof of as having invested in Africrypt as at the date of issuing of the application, dated 19 April 2021 (the Bitcoin transactions were recorded at rand value as at date of transfer).

He said since the application was launched, the amount that investors have submitted as claims has increased as other investors supplied their proof of payments to Botha. The total amount now stands at R140 million (up from the R80 million that ITWeb initially reported), he said.

Cajee also pointed out that Africrypt was registered with the Financial Intelligence Centre (FIC) and that the company abided by all anti-money-laundering regulations as well as submitting reports to the FIC on irregularities of client accounts.

“Africrypt did all of the above to pre-empt regulation, even though there is a lack of guidance from government and regulatory bodies regarding crypto-currencies in South Africa,” he said.

In the latest development, attorney John Oosthuizen, who had been representing Africrypt, told ITWeb yesterday that he no longer represents the Cajee brothers. He did not provide a reason for why he was no longer the brothers’ attorney.

When asked to comment, Cajee cited “financial constraints” as the reason why Oosthuizen was no longer their attorney.