The Qatar-based Barwa Real Estate Company QSC succeeded in its bid to sequestrate the estate of an alleged Ponzi scheme mastermind Dean Rees in the South Gauteng High Court on Wednesday, its attorneys said.

In a statement, Dewey and LeBoeuf said Barwa, in its founding affidavit, alleged that Rees fraudulently, and as part of an alleged Ponzi scheme, misappropriated a sum of at least US$12.7-million.

It was further alleged that, together with Barry Tannenbaum, Rees was liable for a sum in excess of US$30-million, which Barwa had made available for the purposes of financing the purchase of active pharmaceutical ingredients.

The sequestration application was heard by Judge Mohamed Jajbhay.

This followed a freeze order which was obtained by Barwa against the assets of Dean Rees on 1 September.

Sequestration to be final on 9 February

Judge Mohamed Jajbhay ordered that the estate of Dean Rees be placed in provisional sequestration and that Rees be called upon to advance reasons why the sequestration order should not be made final before 9 February.

"The judgment came a day after confirmation by the Minister of Finance, Pravin Gordhan, in his Medium Term Budget Policy Statement that warrants of arrest have been issued for both Rees and Tannenbaum for their alleged participation in South Africa's largest Ponzi scheme," Dewey and LeBoeuf said.

The scheme was estimated to have involved financial transactions amounting to at least R12.5-billion, the attorneys said.

The Ponzi scheme involved at least eight foreign jurisdictions and was reported to have fleeced some of South Africa's most accomplished business people.

Rights of the client protected

The managing partner of Dewey and LeBoeuf's Johannesburg Office, Greg Nott, said the firm had taken a dedicated and committed effort to ensure that the rights of the client were protected and enforced.

"We are happy with the result and, more so, pleased to see that the court has taken due cognisance of the overwhelming evidence placed before it.

"We are confident that our client and other international companies will take comfort in the willingness of our government and criminal authorities to bring suspected criminals to book as well as our courts ability to dispense justice and to look after the interests of foreign investors."

Nott said his client had not only enjoyed the confidence of the high court, but had also actively engaged a very competent and capable task team which had the full backing of the finance minister.

Earlier this year a massive Ponzi scheme was discovered, allegedly involving Tannenbaum's company Frankel Chemicals, which was supposedly in the business of buying pharmaceutical ingredients and then selling them on to generic drug manufacturers.

It has been alleged that Tannenbaum supported the scheme by showing prospective investors fraudulent purchase orders from major pharmaceutical companies.