Creditors of Banxso face a troubling reality as over R12.7 million in administrators' fees vanish from the estate. A handwritten note on a court document raises critical questions about the transparency of the liquidation process, leaving creditors concerned about their chances of recovery.
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Creditors who placed their money with Banxso and lost it are now watching more than R12.7 million in administrators' fees disappear from the estate in the first account alone. A handwritten annotation on an official court document raises questions that the liquidators have yet to answer.
There is a cruel irony lodged at the heart of every large insolvency. The people who lose money are the last to see any of it return. The people appointed to recover it are paid first, paid well, and paid regardless of outcome. South Africa's insolvency law enshrines this hierarchy by design, on the reasonable basis that professional administrators must be incentivised to do difficult work. What the law also requires, however, is that those fees be subjected to independent scrutiny before a single rand is disbursed. In the matter of Banxso (Pty) Ltd (In Liquidation), Master's Reference C548/2025, that scrutiny appears to have been quietly set aside.
Banxso was a Cape Town-based online trading intermediary specialising in contracts for differences, or CFDs. It was placed into provisional liquidation on August 22, 2025 following a High Court application brought by a group of investors who alleged that the company had misappropriated client funds. A final liquidation order followed on March 2, 2026. It is important to note that Banxso has vigorously contested the characterisation of its business as fraudulent or illegal. The company and those associated with it maintain that the liquidation was wrongly sought and that the underlying allegations misrepresent the nature of its operations. Those disputes are unresolved and are the subject of ongoing legal proceedings.
What is not in dispute is what has happened since the liquidation commenced. The First Liquidation and Distribution Account, lodged with the Master of the High Court, Cape Town on 21 April 2026 and circulated to creditors ahead of the second meeting of creditors on 15 May, lays bare a cost structure that a representative of some of the creditors has described as "preposterous."
This publication received documentation relating to the administration from a source with knowledge of the proceedings. That source asked not to be identified. Kobus Senekal of FJ Senekal Incorporated, a Bloemfontein attorney representing certain of the creditors, confirmed when contacted that correspondence bearing his name and that of his firm had been sent to the relevant parties. He declined to comment further, stating that the correspondence spoke for itself.
Five joint liquidators were appointed by the Master of the Western Cape High Court at the provisional stage and confirmed as final liquidators on 13 April 2026: Herman Bester, Renee Bernice Bailey, Jochen Eckhoff, Mpoyana Lazarus Ledwaba and Michelle Schutte of Johannesburg. A sixth liquidator, Vaughn Victor, was also listed in the final appointment but does not appear to have signed the second meeting report alongside the others.
South African insolvency law entitles liquidators to statutory fees calculated as a percentage of assets collected and realised. Those fees are not negotiated. They flow from the tariff. What is notable in this case is the scale on which they apply.
The First Liquidation and Distribution Account records total liquidators' fees, across both the free residue and the encumbered asset accounts, of R12,711,170.60 inclusive of VAT. The VAT component alone, paid by the estate on behalf of the administrators, amounts to R1,657,978.77. That is to say: the creditors of Banxso are funding not only the administrators' professional fees but also the VAT those administrators charge on those fees.
The pre-VAT fee across the free residue account breaks down as follows: one per cent on cash of R34,277.41, and ten per cent on collections and interest of R10,927,665.12, yielding a sub-total of R10,961,942.53. Adding fifteen per cent VAT of R1,644,291.38 produces the free residue fee total of R12,606,233.91. The encumbered asset account adds a further R104,936.69 inclusive of VAT.
Divided across five liquidators in equal shares, each administrator stands to receive approximately R2,521,246.78 from this first account alone, inclusive of their portion of the VAT. In pre-VAT terms, the share per liquidator from the free residue account is approximately R2,192,388.51. These are not final figures: further L&D accounts will follow as investigations continue and additional assets are realised, carrying further fees calculated on the same percentage basis.
To be clear, these fees are lawfully prescribed. They are not hidden. They appear openly in the account. The question being raised by creditors is not whether liquidators are entitled to be paid. It is whether everything else flowing from this administration has been subjected to the same transparency and scrutiny that the law demands. There however remains the question of why money recovered from the company's frozen bank accounts is subject to the ten per cent scale when other cash recovered has been scaled at one per cent.
Among the concerns documented in correspondence made available to this publication is the rate being charged for the formal insolvency examination conducted under sections 417 and 418 of the Companies Act. That process allows liquidators and their legal teams to summon and cross-examine persons with knowledge of the company's affairs. It is a legitimate and often necessary tool. In complex cases it can consume substantial resources. At R160,000 per day for a single legal team, the aggregate cost across weeks or months of examination is not difficult to calculate, and the result gives creditors pause.
The attorneys engaged for this work are Mostert and Bosman. Their invoices, running across nine separate entries in the free residue account between November 2025 and April 2026, total R11,629,177.23. Those entries appear in the account as vouchers 23 through 31 and span amounts ranging from R199,891.08 to R5,948,082.92 in a single invoice. The largest of these, Voucher 30, is at the centre of the sharpest legal concern to emerge from creditor correspondence reviewed by this publication.
South African insolvency law is clear on the process that must govern legal costs charged to an estate. Before those costs can be paid from funds held for creditors, the relevant bill must be submitted to a taxing master for taxation: an independent, court-supervised review in which each item is scrutinised and reduced or allowed on its merits. It is a protection specifically designed to prevent the professional advisers of an insolvent estate from charging whatever they wish at the expense of those who are owed money.
In the official documents filed with the Master in respect of this estate, that protection appears to have been quietly removed.
Voucher 30 in the official filing, which relates to the single largest legal bill in the first account, bears the printed heading that would ordinarily accompany a taxed bill of costs. The word "taxed," however, has been struck through in manuscript. In its place, written by hand, are the words: "by consent."
"By consent" is a legal term with a precise meaning. It means that the parties to the arrangement agreed among themselves to the amount payable. It does not mean that a taxing master reviewed the account and allowed the charges. It means that the taxation process was dispensed with entirely, by agreement between the liquidators and the attorneys whose bill was being settled, without any independent oversight.
The creditors who ultimately bear the cost of that bill were not parties to that consent. They were not consulted. They were not notified that the normal protective process had been abandoned. They are simply presented, in the first account, with the outcome.
Correspondence reviewed by this publication raises the legal consequence of this arrangement in direct terms. The creditors' attorney pointed out that reference was made in the account to pro forma invoices and posed the question of on what basis a bill of costs could be subjected to taxation where the underlying document was not a final tax invoice. The answer offered was that in law a pro forma invoice does not constitute a valid tax invoice as contemplated in section 20 of the Value-Added Tax Act 89 of 1991, nor does it constitute a proper demand for payment.
The VAT Act point is significant. Section 20 of the Act requires that a valid tax invoice meet specific formal requirements, including the designation of the document as a tax invoice, the supplier's VAT registration number, and a full description of the services rendered. A pro forma invoice satisfies none of these requirements. Input tax may not lawfully be claimed on the basis of a pro forma account. If the estate has claimed input tax on costs paid on the strength of pro forma invoices, that itself would require explanation.
The correspondence describes the inconsistency between pro forma and final invoices as raising serious concerns regarding compliance with VAT and insolvency law, and characterises the failure to subject costs to taxation as materially prejudicial to creditors.
The liquidators have been formally called upon to subject all costs to taxation. The correspondence states in terms that if payments proceed and bills of costs are subsequently taxed off, the costs will be recovered from the liquidators who refused to adhere to the taxation process, jointly and severally.
That is a personal liability threat directed at the administrators in writing. It has not, as at the date of publication, been answered.
The First Liquidation and Distribution Account records total assets recovered across both accounts of approximately R113.3 million. This is, in the context of the liquidation, a significant achievement in under nine months, reflecting the effect of pre-liquidation preservation orders that froze Banxso's bank accounts before the winding-up proceedings were finalised.
The collections in the free residue account are set out in detail: R23,047,183.54 collected from Standard Bank's suspense account; approximately R84.3 million in funds subject to preservation and restriction orders collected across multiple tranches between November 2025 and April 2026; R1,394,444.70 converted from EUR68,288 held by the SA Reserve Bank; R470,000 recovered from the National Director of Public Prosecutions as legal fees under a court order; and balances from Nedbank, Capitec, and Standard Bank credit accounts.
Against this income, the free residue account records amongst others the following charges: legal costs to Mostert and Bosman of R11,629,177.23; recordings and transcriptions to Veritas of R128,510.20; liquidators' fees including VAT of R12,606,233.91; SARS income tax on interest earned of R128,702.87 and bond and Masters fees pro rata. The net VAT payable to SARS comes to R2,884,824.42 in the free residue account, with a further R26,109.74 from the encumbered asset account.
After all deductions, R90,117,813.89 is carried forward to the second L&D account. Against that figure sit 216 proven concurrent creditor claims totalling R194,379,545.72. The first account delivers not a cent to those creditors. Every rand recovered to date has been absorbed by the costs of administration, statutory fees, tax obligations, and the single distribution of R102,077.04 to the secured landlord creditor.
The VAT refundable by SARS on input costs, shown in the account as R2,910,934.16, offers some offset. But that amount accrues to the estate, not directly to creditors, and will itself be subject to the deduction of further costs in the second account.
The creditors' correspondence draws the arithmetic out plainly. A properly conducted taxation of the legal bill, it is argued, would reduce it by at least thirty per cent. On a legal bill of R11.6 million, that represents a saving to creditors of approximately R3.5 million.
The picture is further complicated by what appears to be disagreement among the liquidators themselves.
The Section 402 report submitted to creditors at the second meeting bears the signatures of Herman Bester and Renee Bailey, both dated at Bellville on 28 April 2026; Jochen Eckhoff, dated at Cape Town on 28 April; Mpoyana Lazarus Ledwaba, dated at Pretoria on 28 April; and Michelle Schutte, dated at Johannesburg on 28 April. The sixth liquidator, HJV Victor, appears on the signature pages but without a completed date or signed copy in the documents circulated to creditors.
Creditor correspondence reviewed by this publication raises this directly with the Master of the High Court, noting that material disagreements appear to persist amongst the liquidators themselves, and questioning how a liquidators' report could properly be circulated to creditors where there is, on the face of it, no consensus amongst the joint liquidators concerning its contents.
The principle invoked is fundamental to insolvency administration: reports submitted to creditors and to the Master must be accurate, complete, made in good faith, and reflective of a properly constituted and considered position adopted by the appointed liquidators acting jointly and within the scope of their statutory obligations.
If liquidators who disagree with the contents of a report are nonetheless named as signatories to it, that raises questions about the integrity of the document and the process by which it was finalised.
Correspondence directed to the Master of the High Court in Cape Town, and reviewed by this publication, represents a formal escalation. It invokes section 381 of the Companies Act, which compels the Master to direct a formal investigation into the conduct of liquidators. It also cites section 45(3) of the Insolvency Act in relation to the treatment of employee claims, a matter reserved for the follow-up to this report.
On the question of costs and governance, the Master has been asked to provide clarity on four specific matters before the second meeting: the Master's position on employee claims; whether the current process complies with section 45(3) of the Insolvency Act; whether the Master intends to take any steps regarding the apparent irregularities; and how the issues are proposed to be dealt with at the meeting.
The liquidators were asked, in the correspondence first sent on 5 May, to confirm within five days that the liquidation and distribution account would be withdrawn until all bills of costs had been properly taxed. No such confirmation had been received as at the date of the follow-up correspondence on 12 May.
The Section 402 report submitted to creditors covers the required statutory ground: the company's share capital and directors; the assets recovered; the causes of the company's failure; the personal liability of directors; legal proceedings; the enquiry into the company's promotion, formation, and failure; books and records; and the prospects of the winding-up. It does not address the contested costs, the pro forma invoice question, or the "by consent" annotation on Voucher 30.
On the broader question of how the estate came to be in this position, the report quotes from the High Court's provisional liquidation judgment, in which Le Grange J found on a prima facie basis that Banxso's business model was unlawful. Again, it is relevant to note that these findings are contested and that Banxso's principals maintain that the company operated lawfully and that the court was misled. Those contests are the proper subject of ongoing legal proceedings, not of an administrator's report.
Tygerberg Trustees did not respond to the substantive concerns raised in the creditor correspondence of 5 May. The follow-up letter of 12 May noted that the continued failure to properly engage with these objections created the impression that the liquidators were unwilling to justify the legality of the procedure followed in relation to the accounts and costs.
Further L&D accounts are coming. The joint liquidators' sworn certificates confirm that collections are expected from IT equipment, office furniture, Paymaster transactions under investigation, and cross-border transactions under further enquiry. Each new tranche of collections will generate further percentage-based statutory fees for the administrators. Each new phase of legal proceedings will generate further attorney and counsel invoices for Mostert and Bosman.
If the daily rate of R160,000 for the enquiry legal team is sustained across months of further examination, the cumulative professional fees could reach multiples of the R11.6 million already charged in the first account.
For 216 proven creditors whose combined claims stand at R194,379,545.72, who have received nothing from the first account and who face the prospect of the concurrent dividend being eroded further by every passing week of professional engagement, the question of whether those fees are being properly controlled is not abstract. It is the difference between recovering something and recovering nothing.
The costs, creditor correspondence states plainly, appear "excessive, unjustifiable and prejudicial." That assessment, supported by a handwritten annotation on Voucher 30, is now a matter of record before the Master.
* TOMORROW: The disputed employee claims, the draft resolutions to be placed before creditors at the second meeting, and what they mean for who controls this estate going forward.