Documents reveal that an Investec official received millions in secret loans from the Moti Group during make-or-break discussions with the bank.
This escalating mountain of debt has twice forced Investec to drag Moti to the negotiating table to hash out complex restructuring plans. One of these took effect in 2016 and the other in 2019. The compromising loan agreement and related documents form part of a massive leak from within the Moti Group which has sparked an intense legal and public relations fightback campaign by Moti, including criminal charges against the alleged whistleblower and legal threats against amaBhungane and its partner in this investigation, US-based investigation and advocacy group The Sentry.
Investec told us:"Jonathan Epstein was an independent contractor to Investec from 2014 to 2016, and a full-time employee from 2016 to 2018. We were not aware of the loan agreement with Waleed Investment Holdings, a part of the Moti Group. Once we became aware of the loan agreement, we immediately began an investigation into the matter. Mr Epstein ceased to be employed by Investec prior to the conclusion of the investigation.
Asked whether Investec was at any time made aware of him receiving financial benefits from the Moti Group while employed at the bank, Epstein replied,"I received no financial benefits from the Moti Group." "I had been funding Hubblez up to that stage and commented to him that further seed capital was needed to progress the development. Mr Moti was interested in the concept, and we came to an agreement that he would provide a loan for this purpose. As a prudent businessman Mr Moti required security which I agreed to provide for the R 2.5 million loan."
This coincided with one of the many debt restructuring negotiations between Investec and Moti, this time relating to a R550-million loan he originally obtained from the bank in 2012. This does not indicate that Gerber Goldschmidt was doing anything wrong, merely that Epstein wanted his money sent there instead of, for instance, his own bank account.
Another document shows that, by early 2018, Epstein had received in total R14.4 million from the Moti Group while employed by Investec, a seemingly significant conflict of interest.These payments stretched over the entirety of the negotiations and implementation of Investec's group-wide debt restructuring with Moti – and also continued well into renewed negotiations around yet another round of debt restructuring that started in 2018 and culminating in 2019.
Among these prospective shareholders are Moti himself and people from his inner circle – and Epstein who is allocated an effective indirect stake in ACF of 0.45%. This would have been worth around $1.8 million or well over R20 million at the time, based on a contemporaneous sale of ACF shares dealt with in our previous reporting on Moti.Moti told us:"Once again I must protest your continued insistence on referring to"the leak".
FCF, meaning Ferrochrome Furnaces, was part of the Moti Group and central to its debt problems with Investec.This seems to be at odds with responses amaBhungane received from both Moti and Epstein where both portray Epstein as little more than an intermediary with no authority in the talks with the bank.
Moti, like Epstein, told us the Investec man's employment with the Moti Group would not provide any"inside knowledge" from the bank's side. "Some, if not all of these purported letters from prison were forged to drive your, or your"sources'", narrative against me. This whole paragraph is baseless speculation and does not warrant a reply. I insist that you publish this reply."But what happened to the app Moti was funding – and the enormous debt Epstein had accumulated since 2015, now totalling R16.92 million ?
Epstein was bound as guarantor for the debt leaving him more or less at Moti's mercy if Yizoot failed.One week after Epstein took the job at Moti Group a settlement agreement was signed seemingly absolving Epstein of repayment obligations and all the guarantees.
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