Innscor chief executive sued over South African bank failure

Innscor Africa chief executive, Antonio  Fourie is being sued in his native South Africa for his alleged part in the failure of African Bank Investments Limited (Abil) in 2014 by the lender’s black economic empowerment (BEE) partners who claim ‘recklessness’ by the directors cost them $128 million (R2 billion).

Business Day reported yesterday that Fourie is being sued in his personal capacity as a former director of Abil in a summons issued on December 17, by BEE shareholders of the Hlumisa and Eyomhlaba schemes who say they lost R729 million and R1.3 billion in shareholder value.

Fourie, one of South Africa’s most recognisable executives, was chief executive of collapsed furniture retailer Ellerines, which was placed in business rescue in August 2014 after its parent company African Bank — then South Africa’s biggest lender of unsecured loans — was placed under curatorship.

African Bank is scheduled to relaunch next month.

Fourie left the Ellerines position in February 2014, the same time he also quit his seat on the boards of troubled African Bank and its parent firm Abil.

He joined Innscor in October the same year, taking over from John Koumides. He said at the time that Innscor’s demands met his profile.

The conglomerate, which became the first Zimbabwe Stock Exchange-listed firm to breach the $1 billion revenue mark in the full-year to June 2014, has since unbundled and listed separately its quick service restaurants (QSR) unit as Simbisa  Brands.

The alleged reckless decisions included one by Abil directors to advance R1.4bn to Ellerines “without making provision for security” and in “circumstances where there was no reasonable prospects of the loans being repaid.”

Fourie was retained as an Abil director when the R1.4bn loan was advanced, which the BEE shareholders say was a conflict of interest.

Ellerines was a struggling entity and is seen as a contributor to the misfortunes of Abil and African Bank. The furniture retailer has since ceased to exist after selling off its assets.

Officials at Innscor’s office in Harare said Fourie was not available to comment. He commutes from South Africa a reported three times a week to run the diversified group.

Other Abil directors listed as respondents are former chief executive Leon Kirkinis, former finance director Nithia Nalliah, non-executive directors Mojanku Gumbi, Morris Mthombeni, Nomalizo Langa-Royds, Nicholas Adams, Sam Sithole, Robert Symmonds and chairman Mutle Mogase.-The Source

(156 VIEWS)