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Arrested and charged for fraud, theft and money laundering of R45m
MAHMOOD SANGLAY
The arrest of former Amaanat Investment Holdings (AIH) chief executive Hussun Abdool Khalek Omar marks a new phase in one of South Africa’s longest-running corporate disputes involving a Muslim community investment institution.
Omar was arrested on July 1 and appeared in the Durban Specialised Commercial Crimes Court on charges including fraud, alternatively theft, and money laundering. Strict conditions were attached to Omar’s R200,000 bail, which the state did not oppose. The matter was postponed to August 5 for discovery.
In a shareholder update issued on July 2, AIH confirmed the arrest and emphasised that the criminal prosecution is separate from the company’s ongoing civil arbitration and recovery proceedings. It described the criminal matter as sub judice and undertook to keep shareholders informed of material developments where legally permissible.
For many shareholders, the court appearance represents the first visible sign that a criminal investigation launched more than four years ago has entered the judicial process. Yet the criminal case is only one part of a broader dispute that has unfolded since concerns first emerged about the company’s financial affairs in late 2021.
Founded more than 50 years ago during apartheid, Amaanat enabled members of the Muslim community to pool their savings in a property investment company. It later expanded from residential property into a nationwide commercial portfolio.
Photo Google Maps
Sources say AIH had about 6,500 shareholders, including some 3,000 pensioners and elderly investors who depended on dividend income. This explains why the current proceedings have generated such widespread concern.
The origins of the dispute
The dispute did not begin with Omar’s arrest. Questions were first raised during AIH’s annual general meeting on November 24, 2021, when shareholders expressed serious concerns about declining dividends after the COVID-19 period. According to sources, shareholders had previously received average returns of about 7%, but income had dropped substantially.
The same sources say that what initially appeared to be a post-COVID financial problem later developed into a wider governance crisis. They add that it involved allegations of serious mismanagement and unauthorised transfers of substantial shareholder funds.
An affidavit deposed by attorney MS Omar, filed in AIH’s 2022 interdict proceedings, states that after the AGM whistleblower Mohamed Salim Limalia informed him that substantial AIH funds had allegedly been transferred without authority into a Kreston MOP Agency account controlled by Omar. The affidavit further records that Omar allegedly acknowledged withdrawing more than R40 million “in anticipation of fees” and proposed reimbursing AIH by transferring assets and cash, but that the board rejected the proposal.
Omar has not yet entered a plea to the criminal charges. He has, however, previously maintained that the disputed payments, which AIH alleges total R646.2 million, largely represent legitimate professional fees.
The allegations
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AIH alleges that, while serving simultaneously as AIH’s chief executive and Kreston KZN’s managing partner, Omar authorised substantial payments to entities under his control without proper authority. He also exercised effective control over Coral Asset Management, which collected rentals from AIH’s commercial properties before that mandate was terminated in 2022.
The scale of the alleged losses has also escalated as forensic investigations progressed from 2022 to 2026. Early forensic findings in February 2022 by the late Eckhard Volker, the managing director of Integrated Forensic Accounting Services, referred to approximately R160 million in alleged misappropriation. Transactions in which the alleged misappropriation occurred were concealed by Omar under stated capital in the relevant financials of AIH over roughly a decade.
AIH alleges that R646.2 million was transferred through 441 payments between 2013 and 2021 and contends that Omar must account for those transactions and repay any amounts not shown to have been used for the company’s benefit. Those allegations form part of AIH’s civil recovery claim and have not yet been determined by a court or arbitration tribunal.
Civil case now moves to arbitration
The civil proceedings have been instituted by AIH on behalf of the company and, ultimately, its shareholders. Their purpose is to recover money and assets that AIH alleges were unlawfully diverted by Omar for personal gain and unjust enrichment.
Sources have confirmed that the civil proceedings, originally destined for the High Court, have now been consolidated into an arbitration process under the Arbitration Act. The arbitration, scheduled to begin on July 13 before retired Judge Ashley Binns-Ward, will test AIH’s claim that Omar must account for the R646.2 million in disputed payments and repay amounts allegedly not used for the company’s benefit.
The criminal proceedings, by contrast, are brought by the state through the National Prosecuting Authority (NPA) following a Hawks investigation. Unlike the civil proceedings, which seek recovery of funds for shareholders, the criminal prosecution seeks to determine whether the alleged conduct amounts to fraud, theft or money laundering beyond reasonable doubt.
Specific assets under scrutiny
The state alleges that company funds were diverted through intermediary accounts and used to acquire assets including immovable property, a Porsche motor vehicle and precious metals.
Reliable sources say one of the transactions under scrutiny concerns a R12 million payment on August 26, 2019 from AIH into a Kreston MOP Agency account, with a bank reference to Rapid River Investments. The latter entity is controlled by Omar and the transaction is directly linked to the acquisition of a luxury home in Camps Bay, Cape Town.
Photo Google Maps
Another disputed transaction concerns a sectional title property in Houghton, Johannesburg, allegedly acquired for Omar’s daughter through the FHO Trust. Related civil litigation involving that trust has already reached the High Court, where an exception brought by the trust was dismissed earlier this year, allowing AIH’s claim to proceed.
Omar denies wrongdoing
Throughout the dispute, Omar has consistently denied acting unlawfully.
In earlier public statements he maintained that the payments of R646.2 million over nine years in question represented legitimate professional fees owed to Kreston and that the dispute was essentially commercial rather than criminal. In his affidavit supporting his bail application, Omar again denied the allegations, stated that he intended defending the charges, and recorded that he had co-operated with investigators.
Significance of the latest developments
Omar’s arrest signals that, after four years of investigation, the criminal case has entered the prosecution phase just as the civil arbitration is about to begin. For thousands of AIH investors, the months ahead may prove decisive. Ultimately, the courts and the arbitration tribunal will determine what, if any, financial misconduct had occurred.
If found guilty, Omar faces a fine not exceeding R100 million, or imprisonment not exceeding thirty years. In relation to the counts of theft involving more than R500,000 the minimum sentence is fifteen years’ imprisonment, unless substantial and compelling circumstances exist.
