Major ruling in Dimension Data fraud case against co-founder and former top executives

The Johannesburg High Court has declared a transaction involving several former Dimension Data executives regarding the sale of The Campus business park in Bryanston an “illegal scheme”.

Judge Denise Fisher declared the transaction void and ordered that Dimension Data Facilities was entitled to restitution of The Campus and all related assets and contracts that were transferred to ID Propco.

Fischer also ordered that the former executives and ID Propco pay the legal costs of NTT (formerly Dimension Data), on a punitive scale.

Japanese telecoms giant Nippon Telegraph and Telephone (NTT) acquired the entire Dimension Data in 2010. Before its buyout, Dimension Data was the largest JSE-listed technology company.

In 2019, Dimension Data was integrated under the group’s NTT Ltd. division and , in October 2023, NTT abandoned the Dimension Data brand entirely.

NTT took legal action against a Dimension Data co-founder and several former executives in 2022 after a whistleblower provided enough evidence to spur the company to appoint Herbert Smith Freehills to investigate the matter.

NTT said the investigation revealed that former senior executives did not disclose their personal financial interest in the transaction and wrongfully induced its conclusion.

When NTT confirmed the legal action against the six former Dimension Data executives last year, it also named them for the first time: Jeremy Ord, Jason Goodall, Grant Bodley, Steven Nathan, Saki Missaikos, and Bruce Watson.

Jeremy Ord co-founded Dimension Data in 1983 and served as executive chairman until 2021.

Bruce Watson joined the company in 1984, and Saki Missaikos was the executive head of strategy and former MD of Internet Solutions.

Jason Goodall was Dimension Data’s CEO before being promoted to Global Chief Executive Officer for NTT’s IT services subsidiary, NTT Ltd. He left in 2021.

Grant Bodley was the Dimension Data Middle East & Africa CEO until May 2021. He was reportedly acting as spokesperson for all six executives.

Steven Nathan was head of corporate development at Dimension Data.

NTT also said a property consultant, Martin Epstein, was implicated.

“The basis for the judgment was the executives’ undisclosed financial interest of the Campus transaction,” NTT stated.

“ID Propco was established by Identity Property Fund 1 to purchase The Campus. ID Propco is wholly owned by the fund,” it continued.

“The fund was structured as a limited partnership, originally comprising a black-owned general partner.”

NTT said the executives held beneficial majority financial interests in the fund, through the fund’s limited partner and major investor, Areti.

“The executives’ financial interests, which were not disclosed to the NTT Group, were held through a complicated partnership structure, enabled by Martin Epstein, a consultant to the then Dimension Data Group.”

NTT said that during November 2022, Areti removed the black-owned general partner of the fund and replaced them with a company owned by Epstein.

This effectively secured complete control of and beneficial financial interest in The Campus, it said.

“In all the circumstances and on the undisputed facts, the executives entered into an illegal scheme designed to appropriate for themselves a secret financial benefit which placed them in conflict with their boards both from a section 75 perspective and their common law duties as directors,” Fischer ruled.

“The scheme was brazen and dishonest. It was orchestrated without due regard to the relationships between the Japanese holding entities and the SA interests.”

Fischer said if this flouting of foundational and universal commercial values remains unchecked and unpunished, it would be a travesty.

She said it would tarnish South Africa’s commitment nationally and internationally to the upholding of the values of honesty and integrity, which are intrinsic to proper commercial relationships.

“This is a cautionary tale for those who apply and regulate the BEE infrastructure which is so vital to the development of our constitutional democracy,” Fischer stated.

“Nominee arrangements and secret en commandite partnerships such as those which have been abused — whilst they have their place in corporate structure — must of necessity entail the implementation of checks and balances which serve to prevent them being used to make corrupt relationships possible.”