Ian Stokes, a Durban attorney who fled to England last week leaving a trail of debt, was provisionally sequestrated on Wednesday after his former business partner claimed he had misappropriated more than R44-million.
Apart from money missing from his trust account - at present being probed by the Natal Law Society - it is alleged he left investors in another company high and dry when he left last Thursday night "with the intention of avoiding the consequences of his actions".
The interim order also affects Stokes's wife, Carla, who is about eight months' pregnant and who, it is claimed, would also have left the country if it were not for her advanced stage of pregnancy.
Stokes, who practised from offices in La Lucia, was also in partnership with Durban businessman Robert Sevel in a company called R & I Promotions in Florida Road which specialised in making claims to the Road Accident Fund.
In an affidavit before the Durban High Court, Sevel said he represented all of the shareholders of R & I Promotions in making the application against Stokes and his wife.
He said that before leaving South Africa, Stokes had informed him he had misappropriated about R12-million from the company and that there was no prospect that he could repay this.
Sevel said he had been approached by Stokes in 1998 with a business idea for which he wanted finance.
"He told me there was a huge market in purchasing from individuals claims, or potential claims, against the Road Accident Fund (RAF). He provided me with a business plan ... The company would pay the claimants 42 percent of the claim immediately ... and the balance of 28 percent once the payments were received from the RAF.
"The company would make 30 percent on claims."
He said the attraction for the claimants would be that they would receive part of their claims immediately.
"I was also persuaded that the RAF would pay out all claims because we would purchase them only when all necessary documentation had been done. It seemed like a win-win situation to me."
He said he secured R2-million in working capital for a test run. Later, he and Stokes's father, Christo Stokes, sold 77 percent of the shares, raising R10,5-million as further working capital.
Up until 10 days ago, the shareholders had been fed information by Stokes that the business was running successfully and making a lot of money.
"It turns out this was a lie and Mr Stokes had been moving money around from the company's bank account to 'claimants', who either did not exist or who had refused the offer of discounting their claims and had asked only the company lodge claims for them."
These made up the bulk of claims which were bought and it was clearly Stokes's intention to deal with these for his own benefit, said Sevel.
"The whole movement of money was a lie and it was only a matter of time before he could no longer keep up the facade and admit there were no funds left."
He said Mr Stokes's legal firm was owed about R22-million in fees from the 11 000 claims it had on its books, although it was likely that some were not genuine.
"It is possible that frauds (some uncovered already by the RAF) were perpetrated by persons other
than Mr Stokes, such as the sellers of the claims or perhaps the claimants themselves."
Sevel said that from various lengthy conversations with Ian Stokes, his brother Andre (an advocate) and Carla Stokes, he had established that Ian Stokes's trust account had a shortfall of about R2-million which he used for his own benefit. In addition, he also held about R6,5-million belonging to a company, Jet Therapy. This money was missing.
He had also borrowed R14-million from a Robert Mauer and these funds also had been misappropriated.
After Stokes left South Africa on Thursday night, Carla had moved in with her mother and their furniture was removed from their home and placed in storage by Elliott, which specialises in moving furniture overseas.
"I believe that if Mrs Stokes was not in such an advanced stage of pregnancy she would have also left the country. His brother said he left to avoid arrest.
"This was despite us arranging to meet him on Friday morning - he had agreed to undergo a lie-detector test to prove he had not stolen the money, but that it was all legitimately tied up in relevant claims.
"The inescapable conclusion is he has left South Africa with the intention of evading or delaying the payment of his debts. He has, therefore, committed an act of insolvency."
The return date for the provision order is December 15. Road Accident Fund chairman Kessie Naidu confirmed many claims lodged through Stokes were fraudulent, apparently the workings of a syndicate.
Greg Kruger, president of the Natal Law Society, said the investigation into Stokes's affairs was continuing. "We hope to be finished by Friday, as we have an urgent council meeting to discuss the matter."