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Should any of the about R20m allegedly stolen by the late Philip Paphitis (54), from Ensolor, the company he founded and of which he was the former CEO, be found, it would be up to the trustee of his sequestrated estate to decide how it would be distributed among creditors.
This is according to Stefan Steyn, business rescue practitioner of Ensolor, former franchise operator of toy chain Hamleys in SA.
Ensolor went into business rescue in February 2019 after it was discovered that Paphitis had made some allegedly irregular transfers from Ensolor accounts to his own.
Steyn told Fin24 on Friday that the business rescue process of Ensolor should be completed within the next few months.
Fin24 reported last week that Paphitis took his own life by shooting himself about three weeks ago when police came to arrest him at the home of an unnamed woman in Cape Town on charges of alleged fraud, relating to monies he transferred from the Ensolor accounts in December 2018.
Steyn told Fin24 on Friday that Ensolor had put in a claim against Paphitis' personal estate. Ensolor claims Paphitis stole more than R20m from it in December 2018 by transferring money from company accounts to his own personal account.
'Unconventional' removal
According to the business rescue plan, which Fin24 has seen, in December 2018, Paphitis set about "extricating himself from the business in a most unconventional manner".
It is alleged that, while Enselor's general manager was overseas on vacation, Paphitis slowly removed all account privileges from trusted managers in respect of the banking accounts of the company. Ensolor alleges that, over a period of two weeks, Paphitis systematically depleted the takings of all the Hamleys toy stores and illegally transferred it to his own personal accounts.
It is alleged that he also set out to remove all cash takings, and issued instructions to store managers to hand cash takings to him, instead of banking it, as had been done previously.
Without a trace
When the general manager returned in January 2019, he saw on video footage how Paphitis entered the offices with a shopping trolley and then disabled the cameras that recorded this. Paphitis' office was cleared of several important documents and all personal possessions as well. Paphitis seemed to have "disappeared without a trace" states the business rescue plan and did not answer calls or e-mails. It was then decided to place the company in business rescue in February 2019.
"The shareholder and director drawings by Paphitis were excessive and in certain cases questionable deepening the cash flow requirements. For example, money was used to finance a Range Rover, business class travel and to take out insurance policies not relevant to the business," states the business rescue plan.
It also mentions Paphitis' "lack of detail at foundation level when making critical decisions around store sizes, lease and trade potential" and expensive legal fees actually relating to Paphitis' personal matters like his divorce.
The international franchise holder of UK-based Hamleys is the Reliance Group, an Indian conglomerate headquartered in Mumbai, and the SA franchise holder is Antares, a private company owned by Rand Outfitters and family business Osbro. Antares purchased Ensolor's SA franchise as part of the business rescue plan.
Steyn told Fin24 Antares is happy with the way things are going with the Hamleys business now. According to the Hamleys South Africa website, South African stores are situated in Bedford, Eastgate, the Fourways Mall, Menlyn Park, The Zone @ Rosebank, Umhlanga, Sandton and the V&A Waterfront.
"Hamley's is very much a going concern and plans to open one or two more stores in SA in due course," Steyn told Fin24.
