Cryptocurrency couple to oppose seizure of family trust
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In a surprising twist to the Rawlins Trust cryptocurrency investment saga, Richard and Marise Rawlins have decided to oppose the sequestration of their family trust.
The couple indicated their decision in a last minute filing in the East London high court on Tuesday, the return date for the provisional sequestration order granted on September 1.
Judge Sunil Rugunanan postponed the matter to November 24.
The development comes amid ongoing discussion among hard-pressed investors regarding the liquidity of the trust, and whether the best approach to recovering their money is sequestration or trading out of the difficulties.
Papers supporting the couple’s opposition are likely to be submitted to the court soon, to allow Russell Linde, who brought the application to liquidate the trust, to reply before the matter is argued in court.
In his application, Linde relied on a written acknowledgment by Richard Rawlins that the trust was unable to repay his R500,000 investment.
“We have taken advice that should we make payment to you, that payment would have the effect of preferring you above the trust’s other creditors in that the capital sum of the investments made with the trust exceed the value of the assets owned by the trust,” Rawlins wrote to Linde.
The Dispatch understands from investor sources that various legal grounds for opposing the sequestration of the trust have been identified by senior counsel briefed in the matter.
It was also claimed that not all the funds had been lost.
Gauteng attorney Sakkie Bosman is the attorney of record in the liquidation for the Rawlins couple. Information provided by investor sources last week pointed to him representing investor Daniel Schutte, who has been vocal in stating that liquidation was not the best option for investors trying to avert huge losses on their investment in virtual currency.
Though the Dispatch reported on Monday on the possibility of fireworks in court, Tuesday’s hearing turned out to be a damp squib, as Bosman and East London attorney Angus Pringle, representing Russell Linde, agreed to the postponement ahead of the hearing.
However, the Dispatch was told that a meeting on Monday of Rawlins trustees turned into a heated debate, as they could not agree on a proposal to oppose the liquidation.
Independent trustee Gary Klinkradt would have been in an invidious position at that meeting, as he supported the provisional liquidation application in court before judge-president Selby Mbenenge. And he has told the Dispatch he disagrees with those investors who hold the view the trust can trade its way out of the current difficulties.
For the Rawlins couple, bringing themselves into the ambit of the formal court sequestration process may also provide an opportunity to stave off the intense criticism they have faced since the news broke that their investment business was in trouble.
“There are a lot more questions than answers,” one investor said at the weekend.
Provisional liquidator Garth Voigt has persisted in the view which emerged during the court application that Rawlins Trust is a Ponzi scheme, a perception which one person told the Dispatch was an indication he and independent trustee Gary Klinkradt “are gunning for Richard Rawlins with a vengeance”.
Rawlins is widely described as “brilliant” and “quite bright” and someone who “knew what he was doing”.
Other comments have been more extreme, including “corruption personified” and “they must go to jail. They have stolen millions”.
However, at least one investor has characterised the loss of money as “mistakes were made under extreme pressure from investors who had profit expectations based on previous trading results. Even a brilliant trader like Richard can make occasional trading losses”.
“Long before any proper audit was carried out, the impression that many investors had is that the independent trustee and the liquidator made a unilateral decision that the trust was insolvent, that liquidation was unavoidable, and that Rawlins was guilty of criminal conduct, which of course then muzzled him from any communication with investors,” the investor said this week.