Insolvency practitioner Dines Gihwala was struck off the roll of attorneys on Tuesday.
In a scathing 25-page judgment, the high court in Cape Town ended the 40-year legal career of the former chairman of one of South Africa’s big five law firms, Cliffe Dekker Hofmeyr.
At the peak of his profession, Gihwala was an acting high court judge and was appointed as one of the curators of fraudster Arthur J Brown’s Fidentia group of companies, which collapsed after plundering millions of rands from pension funds and leaving widows and orphans starving.
Gihwala’s downfall followed a complaint of “unprofessional and dishonourable conduct” against him by Karim Mawji, CEO of the Swiss-based asset management company Montague Goldsmith, to the Cape Law Society.
According to the court, Gihwala paid fees at Stellenbosch University for the daughter of a beneficiary of his family trust using “interest” that belonged to Montague Goldsmith.
Handing down his decision on Tuesday, judge Mark Sher said Gihwala’s CV made for impressive reading, “and it is worth quoting from it, as it will illustrate the startling disparity between the heights to which he soared in his professional life and the depths to which he has fallen”.
Sher added: “Unfortunately, as in the case of many before him, he seems to have been lured from the path of righteousness by the attraction of big and easy money.
“The Cape Law Society has brought an application that he be struck from the roll on the grounds that he has made himself guilty of unprofessional and dishonourable conduct.”
Sher said the law society had provided enough evidence to convince him that Gihwala was “guilty of numerous acts of serious misconduct, committed over a period of many years, including acts which amount to misappropriations”.
He had unlawfully enriched himself to the tune of millions of rands, persistently and deliberately refused to account to co-investors, and had been guilty of “various acts of dishonesty, breach of integrity and of his fiduciary duties”.
The court heard that Mawji was introduced to Gihwala in 2001 by a longstanding friend, Anil Narotam, who was Montague Goldsmith’s COO.
Things went wrong when the JSE-listed entity of the company, Spearhead Holdings, sought to attract black investors. Gihwala proposed to use a company that he and businessman Lancelot Manala had set up as a “black economic empowerment company”.
Manala, who had no financial means to fund his “one-third contribution to the venture”, got a loan from the Swiss company and Gihwala. The deal “was done on the basis of a handshake in a hotel room in Johannesburg”.
“Mawji said that we went ahead because [Gihwala] held out that he was a member of an honourable profession, which subscribed to a code of ethics which would make it ‘unthinkable’ for him to act in an unprofessional, let alone a wrongful or fraudulent manner,” said Sher.
“He said he derived his assurance of this by virtue of the fact that at the time [Gihwala] was chairman of one of South Africa’s largest and most well-known law firms, which had an unblemished reputation.”
According to the judgment, Gihwala also introduced Mawji and Narotam to a mining investment opportunity which involved a JSE-listed black economic empowerment company, Scharrig Mining, which later changed its name to Sentula.
Montague Goldsmith invested R3.5m but the money was deposited into an account held by Gihwala’s law firm. Then, instead of being credited to Scharrig, it was credited to Manala’s loan account. Manala drew “considerable sums of money” from it.
Gihwala also transferred R10m of the Swiss company’s investment from his law firm’s account into an interest-bearing investment account, but the money was reflected as belonging to the law firm.
When he was pressed for an update on the investment, Gihwala refunded the capital amount but withheld the interest. Litigation ensued all the way to the Supreme Court of Appeal, which found that “in enriching themselves the behaviour of [Gihwala] and Manala constituted wilful misconduct”.
Gihwala told TimesLIVE he had not read the judgment and had yet to decide on an appeal.
“Thank you for the courtesy afforded to me. I have as yet not read the judgment. Once I have done so I shall consult with my legal counsel and then decide,” he said.