Ex-AIH CEO Omar ordered to repay R354m after ‘theft’ ruling - TimesLIVE

Chartered accountant Hussun Abdul Khalek Omar, the erstwhile director and CEO of Shariah-compliant property holding group Amaanat Investment Holdings (AIH), has been ordered to pay back more than R354m he stole from the group.

This is the upshot of a recent arbitration award issued by retired judge Ashley Binns-Ward in a civil action AIH instituted against Omar.

By agreement, the matter was referred to arbitration. The award recently became public when it was filed in a related civil matter pending before the Durban high court.

In the 103-page ruling, the judge said AIH had proved its claim against Omar personally, that he had used the funds without authorisation and had “committed theft in the civil law sense of the concept”.

This, the judge said, was based in part on his acceptance of evidence that Omar, who was also the managing partner of accounting firm Kreston KwaZulu-Natal, had “confessed” to AIH attorney MS Omar that he had withdrawn about R40m from AIH without board and shareholder authority. He offered to reimburse the money.

During the arbitration proceedings, he claimed that money had been paid for services provided by Kreston on invoice.

But Binns-Ward said the invoices “characterised by features suggestive that they had been fabricated” and Omar was obliged to explain them.

However, he had not given evidence during the arbitration proceedings and the evidence of his son, MH Omar, “did not pass muster”, he was not called as an expert witness and essentially, could not counter the evidence of AIH’s expert witnesses.

In July this year, Omar made a first appearance in the Durban magistrate’s court facing 22 counts of fraud (alternatively theft) and 12 counts of money laundering.

The criminal charges are grounded in allegations that while wearing two hats — director of AIH and the managing partner of Kreston KZN — he plundered more than R29m which he then used to buy luxury properties in Cape Town and Houghton, a Porsche and “precious metals”.

The victims were the 6,500 shareholders of AIH, many of them vulnerable Muslim pensioners and single mothers, who were dependent on the income they received from a return on the profits of rentals generated from the properties owned by the group.

In his application for bail — which was granted in the amount of R200,000 — he denied the allegations. He will appear in court again in October.

In the civil matter in which AIH sued him for R650m, Binns-Ward said Omar had “shifted his defence” but “did not venture into the witness stand” to explain this.

Omar had, during the proceedings, attempted to block the evidence of attorney MS Omar, who is his first cousin, regarding his confession, but the judge ruled that it was admissible.

He must take responsibility for the fact that the invoices cannot be accepted at face value.

He said the experts for both sides had ultimately agreed that the total payments effected by Omar from AIH to Kreston between 2013 and 2021 was R646m.

A key expert witness for AIH had deemed the “minimum misappropriation” to be R354m.

The judge said Omar’s lawyers had submitted that AIH’s case had to fail because it had not proved the quantum of its loss.

However, the judge said, the impossibility of determining the difference between fees represented by questionable invoices disclosed by Omar and the fees Kreston reported in AIH’s annual financial statements was entirely of his making.

“He must take responsibility for the fact that the invoices cannot be accepted at face value,” he said, concluding that AIH’s loss had been established by the expert in the sum of R354.84m.

He ruled that Omar was liable to repay the money to AIH and to pay its costs on a punitive scale, including the costs of its experts.

He dismissed claims against other entities, including Kreston, but made awards against Rapid River (which bought the Camps Bay Property) and FHO Trust (which purchased his daughter’s house in Houghton) holding them liable, jointly with Omar.

Omar has until October to lodge an intention to appeal the award which, in terms of the arbitration agreement, will be heard by three retired judges.