Massive fight to block Mirror Trading International liquidation

There was a massive battle in the Western Cape High Court to block the liquidation of get-rich-quick scheme Mirror Trading International (MTI).

This comes after the hearing for the final liquidation of MTI was delayed from 31 May to today — 15 June 2021.

MyBroadband has learned that judgement has been reserved in the matter, but the legal team which argued in favour of liquidating MTI is confident that the final liquidation order will be granted.

MTI was a South African network marketing scam that claimed to offer automated trading services — initially in forex and later in cryptocurrency derivatives. It accumulated billions of rand worth of bitcoin during 2019 and 2020.

Chainalysis named MTI the biggest cryptocurrency scam of 2020 in the most recent edition of its Crypto Crime Report.

According to court documents MyBroadband has seen, the battle lines were drawn between Clynton Marks, 50% shareholder and the former Head of Referral Programme and Members at MTI, and the team of five liquidators provisionally appointed to the case.

Among the legal technicalities argued before Acting Judge Alma de Wet was whether these two camps should be allowed to join the liquidation case as intervening parties.

News from inside the court room was that the liquidation hearing went ahead with the intervening parties recognised.

Another technical issue that Marks argued is that he and his partner Cheri Marks, who was the Head of Communications for MTI, were not served with the liquidation notice.

Marks’ argument, in essence, is that the attorneys who brought the original liquidation application would have known full well that he and his partner were staff and leaders at MTI.

The attorneys would also have known where to reach Marks, as his home had been raided by the Financial Sector Conduct Authority (FSCA) in connection with MTI.

In addition to the technical issues raised, Marks also argued that the recovery of some 1,200 bitcoin belonging to MTI from its previous Belize-based broker, FX Choice, means that the company was far from insolvent.

It is understood that the liquidators have already converted the recovered bitcoin to cash. Moneyweb, quoting Ovex, reported that the sale of the coins for R1.1 billion temporarily pushed down the price of bitcoin on South African exchanges in April.

None of the arguments against liquidation brought before the court appeared to move Judge De Wet.

While the judgement was reserved, sources inside the liquidators’ legal team told MyBroadband that their opposition was woefully outmatched and that they are confident that a final liquidation order will be granted.

MyBroadband contacted the Marks’ for comment and they responded saying that they do not believe the liquidators have the members’ best interests at heart.

“This is reflected in their answering affidavit where they clearly state members’ wishes are irrelevant. We disagree with this. We also do not feel it is just to ‘go after’ MTI members for something Johann may or may not have done,” Cheri Marks said by email.

According to the Marks’, the liquidation application was premature.

“MTI is a solvent company and any chance of members (however slight) to get any relief would not come from the liquidation process but rather from finding Johann and rightfully encouraging him to rectify whatever wrongs he has allegedly committed.  Further to this it is our belief there are other options more suitable to result in possibly achieving relief for MTI members.”

Marks said that members would be severely prejudiced through the liquidators’ endeavors if the liquidation went ahead.

Asked what will happen if the liquidation is halted, Marks said that this is the matter currently before the court and answering the question now would be premature.

Now read: Mirror Trading International CEO hit with provisional sequestration order

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Massive fight to block Mirror Trading International liquidation