Why is the company closing / liquidating?
As you know, CMS has lost many customers over the last year. The Brandserve team have worked very hard to secure new clients but have been unsuccessful in our attempts to do so.
Since our retrenchment process began at CMS, our team have also been working very hard at securing more investors to put more money into CMS through these challenging times in the business and we only found out last week that our investors were not interested in CMS for reasons which are explained below.
Our investors were primarily concerned that Mr Eugene Van der Vyver is still a shareholder of CMS. He currently owns 15% of the company. It is hard to convince people to invest money into a business where a Former Director and Current Shareholder of the company has allegedly been working hard to destroy the business. As you would imagine, their investment into the company would be at risk if we were to loose any more customers.
What did we do about it?
Some months ago, we filed court papers that enabled us to search Mr Eugene Van der Vyver's house for CMS documentation that he did not return to the company after being asked to do so. This legal process is called an "Anton Pillar". When we searched his house we found lots of information belonging to CMS. We also found additional evidence that suggests that he has been using CMS information in order to take CMS’s clients to other companies.
Some of the evidence we found included;
- A non-disclosure agreement between Mr Van der Vyver and a competitor signed in November 2016
- An "offer of employment" from a competitor that contained a CMS customer list with millions of rands in commission payable to Mr Van der Vyver for securing those customers
- Communication between Mr Van der Vyver and customers in which he has tried to secure their business
- notes of and references to meetings held with these customers in an attempt to secure their accounts for the competitor
What rules are there to that govern directors of companies?
When you are a director of a company, you are required to adhere to very specific rules which are determined in the companies act to protect the company, its staff, customers and investors. These rules are outlined in the companies act and are called Fiduciary Duties.
Under the rules, a director of a company has the duty of loyalty and care and may not for their own benefit harm a company through stealing its clients or any other means. Directors are also required to declare any personal interests that may not be in the best interests of the company.
The documents below outline;
- summary of directors duties
- the court application for the search warrant (will be updated)
- the damages claim and current legal filings against Mr Van der Vyver
What happens next?
We are waiting for a response from Mr Van der Vyver as well as a trial date. Should we win the case, the liquidator will pay the money claimed to staff and creditors. (This would be in addition to monies paid to staff and creditors by the liquidators through the sale of assets and collection of debt for CMS)
We have more legal action planned and will keep you up to date on the process as it unfolds.
Read more below...
More information about directors
You can read more about directors conduct if you click here...
The search warrant
This is our submission to the courts in order to obtain a search warrant, this will be updated with the court stamped papers when we have access to them. Click here for the draft papers...
Damages suffered by CMS
Here is the claim we have submitted to the court in respect of damages suffered by CMS. Click here for the court papers...