A new development in an ongoing matter involving securitisation has reared it’s head in the town of Grahamstown where an ostrich farmer has shown the local courts that his mortgage loan with Standard Bank has been sold on to a third party (securitised) and that Standard Bank have no jurisdiction.
Standard Bank have been trying for a long while to repossess Mr Davenport’s 3,260ha ostrich farm outside Grahamstown in an effort to recover a R3 million loan he made 7 years ago.
A Securitisation Audit?
Mr Davenport’s defense have presented a securitisation audit to the court which indicates that the loan had been sold onto a Taiwanese bank. They then argued that due to the securitisation that Standard Bank has no jurisdiction in the matter. The audit also seems to indicate that the R3 million loan had been sold on as a R5 million bond. These sort of audits are new to South Africa but have been around in the USA for a while now. They are essentially the same as a financial opinion by an auditor but have been challenged by the various banks locally as hearsay. Standard Banks legal representatives have stated that the bond has not been securitised.
The case between Mr Davenport and Standard Bank is not a new one and has been underway for around 7 years. The case has been going on for years now and Mr Davenport has even accused the bank of perhaps manufacturing documents to try appear to be the original documents he signed when taking the loan. His copies of the original and that produced at court seem to differ and thus his defense team think the documents handed to the court were concocted long after the battle began. At one point the bank tried to auction off his property and goods for R4 million when Mr Davenport holds that the value should have been around R60 million.
Virtual Velocity , the company who produced the securitisation audit in this case, has been involved with over 3000 cases in the USA. It is now up to the court to decide if they will accept the audit and be able to act upon this new information.