10 March 2007

South Africa: Ayob Runs Out of Cash But Accuses Mandela Again

Johannesburg — NELSON Mandela's erstwhile lawyer Ismail Ayob says he stands by the allegations he made against the former president and only apologised this week because he could no longer cope with his legal bills. Ayob's recent comments suggest his wrangle with Mandela could still have another life and more details of the former president's financial affairs could still come out in the open. In an order of the Johannesburg High Court on Tuesday, Ayob agreed to pay R800,000 that he took from the trust and also offered an apology to Mandela for statements "which might be construed as defamatory".

The trust brought legal action against Ayob last year to recover R2,2m paid out without the knowledge and authority of the other trustees. The trustees accused him of trying to cover up millions of rands they allege he spent unlawfully.

Trustees George Bizos and Wim Trengove wanted the court to order Ayob to furnish complete and proper accounts of all the payments made while Ayob controlled the trust. They also wanted an order forcing him to repay all the money he paid out unlawfully. As part of the settlement, Ayob agreed to pay R790,000 back to the trust. However, Ayob on Friday told The Weekender that some of the statements he had made in court papers were true.

He gave a full account of the R2,2m that he took from the trust. He said he paid R700,000 into eight trusts for the children and grandchildren of Mandela and this money was paid for their essential needs.

Ayob said R90,000 was paid to his management company to attend to the accounting and management of the trust for four years. He said R837,000 was paid to the South African Revenue Services for income tax owing and payable by the trust. Ayob said Bizos and Trengove required no further accounting to be done. "Bizos and Trengove have refused to ratify these payments and have demanded I repay the money back to the trust from my own funds," he said.

He said he had instructed his counsel to settle the matter as he did not have limitless resources to litigate the matter.

"The remaining money was paid on the express and direct instructions of Mandela to pay for four cars purchased by Mandela and other personal expenses of Nelson Mandela. Bizos and Trengove have ratified this as a legitimate payment and do not require repayment of this amount."

He repeated allegations that Mandela did not pay tax from the proceeds from his image rights, books and films sold abroad.

Answering to the defamation charge, Ayob quoted a report prepared by auditing firm Deloitte & Touche which was attached by Mandela in his court papers against him: "We have been told that South African taxation has not been paid on this income. We recommend that Mr N R Mandela apply for amnesty."

The report, dated November 7 2003 and addressed to Richard Laubscher, a joint trustee of the NRM Family Trust, said it had identified that Mandela had foreign investments which generated income in a foreign currency. "These are the facts and they are not defamatory," Ayob said.

Ayob said in a replying affidavit in the trust case, Bizos attached the minutes of a meeting of the trustees held in October 2003 at the offices of Laubscher. In that meeting, Laubscher was reluctant to sign the trust accounts as he had insufficient information to exercise his duties. Among the actions agreed at the meeting, Bizos and Laubscher agreed to discuss with Mandela the prospects of applying for amnesty in terms of possible unauthorised foreign assets.

Ayob also expressed surprise that Bizos said there was an outstanding legal matter between Mandela and Ayob. This relates to the legal application Mandela launched in 2005 to reclaim the right to his artwork.

Mandela succeeded in getting an interdict restraining Ayob and businessman Ross Calder from marketing, selling or offering for sale any works of art and other merchandise involving the use of Mandela's name or reputation.

Mandela had also demanded that Ayob submit a full account of all works created, produced and signed by Mandela that had been sold between 2003 and 2005.

Ayob denied breaching Mandela's copyright and other intellectual property rights.

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