Rafik Mohamed out on bail

The Palm Ridge Commercial Crimes Court has granted businessman Rafik Mohamed a R100 000 bail, after spending two days behind bars. Charged with fraud, theft and contravention of the Companies Act, the court slapped Mohamed with strict bail conditions, which included: Attending all court hearings from 18 August, with a warning that failure could lead to another arrest. Ensuring that he does not communicate with state witnesses. Handing over to the State his passport and all other travel documents. The development comes amid ongoing investigations linked to SA Steel Mills, which received more than R1 billion in funding from the Industrial Development Corporation (IDC) and is currently under business rescue. The company has been at the centre of a series of disputes involving allegations contained in affidavits, questions around shareholder funding and claims relating to transactions involving UK-registered company Emberton Limited. Those allegations have previously been denied by Mohamed and associated parties. The detention follows months of scrutiny surrounding the affairs of SA Steel Mills, including criminal complaints lodged with law enforcement authorities and questions over the flow of funds linked to the company. In his bail application affidavit, Mohamed said he has for several years been “involved in the development and operation of a steel manufacturing business conducted through the Pro Roof Group of Companies and more recently the SA Steel Mills (Pty) Ltd (“SASM”) and related companies”. “The core industrial plant was operated by SASM on immovable property owned by Pro Roof Industrial Park (Pty) Ltd (“PRIP”). “Coin Wise Trading 42 (Pty) Ltd (“Coin Wise”) was the shareholder and lender in relation to PRIP and SASM. “The project was funded predominantly by the IDC under loan agreements concluded from about 2017 onwards, including construction finance, plant and equipment loans and working capital facilities. “The IDC exposure was substantial, in excess of R1 billion. “The relevant IDC facilities were documented, purpose-specific, subject to drawdown, reporting, covenant, monitoring and oversight provisions,” explained Mohamed. He said during 2023, discussions were held with Alfeco Holdings (Pty) Ltd “regarding Alfeco or its nominee acquiring Coin Wise’s shareholding and loan claims in PRIP and related interests”. The discussions, he said, “culminated in a written Sale of Shares and Claims Agreement concluded during October 2023 between, amongst others, Alfeco, Coin Wise, PRIP and me”. He added: “That agreement was subsequently amended by addenda. “The transaction was not a simple sale of a valuable unencumbered asset. “It was structured against the background of very substantial IDC indebtedness and the contemplated restructuring of the IDC debt. “Alfeco and its representatives, including Mr Ashish Verma, were given extensive access to financial records, IDC loan documentation, corporate records and other information relating to PRIP, SASM and the group. “They had the ability to take accounting, legal and financial advice, and did so. “Alfeco thereafter assumed management and operational control over PRIP and SASM and appointed its own representatives to the relevant boards. “The disputes which now underpin the criminal complaint arise from that commercial transaction, the IDC facilities, alleged warranties, financial statements, valuations, dividend entries and intra-group accounting treatments. “Those issues are already the subject of civil and arbitration proceedings.” Mohamed said he “became aware during or about November 2024 that a criminal complaint had been laid by or at the instance of Alfeco and PRIP. “To my knowledge, the complaint was not laid by the IDC against me. “The complaint statement that I have seen was produced in arbitration proceedings. “It was, on its face, primarily directed at Mr Peyush Bhana, the former financial director, and alleged theft and fraud in respect of Alfeco, SASM, PRIP and the IDC.” He told the court that he was a South African citizen, “with no intention to flee”. “I have lived and conducted business in South Africa throughout my life, Johannesburg being my home, my family base and the centre of my business life. “I consider South Africa to be my permanent place of abode. “I obtained a United Arab Emirates residency card, issued on 2 November 2024 and valid until 1 November 2026.” He said his wife, children and relatives were “dependent on me”. “I suffer from chronic medical conditions which require regular medication, monitoring and access to medical care. “These conditions are not advanced as a shield against prosecution, but they are relevant to the prejudice I will suffer if detained, and to the proportionality of continued detention. “I suffer from asthma and chronic severe sinusitis. “ I require daily treatment, including nasal sprays, nasal irrigation