Jan Vermeulen | 26 January 2025

Culross Property Co, the company at the centre of the controversy surrounding Dimension Data’s sale of The Campus, has entered business rescue.
The Campus was sold for around R1.3 billion to a black women-led consortium. Dimension Data’s financial statements valued it at R1.6 billion.
Former Dimension Data CEO Grant Bodley said at the time that selling The Campus was part of a restructuring programme to focus on its core business.
He said it would also help the company’s B-BBEE rating, which improved from Level 4 to Level 2, with ambitions to reach Level 1.
However, Japanese parent company NTT launched an investigation into the deal in 2022 after a whistleblower reportedly provided the company with enough evidence of malfeasance to warrant one.
It appointed Herbert Smith Freehills to investigate the matter and ultimately launched legal action against several former executives in 2023.
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, it also named them for the first time: Jeremy Ord, Jason Goodall, Grant Bodley, Steven Nathan, Saki Missaikos, and Bruce Watson.
The announcement came as a shock, as the six men were South African IT industry royalty.
Last year, the Johannesburg High Court delivered a bombshell ruling against the six men and several people who worked with them on the deal.
“The scheme was brazen and dishonest. It was orchestrated without due regard to the relationships between the Japanese holding entities and the SA interests,” Judge Denise Fisher said in her ruling.
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.
She 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 NTT’s legal costs on a punitive scale.
The executives said they would appeal the ruling, stating that they would clear their names by proving the deal was above board and never sought to undermine transformation.
Culross Property Co was at the centre of the deal to sell The Campus.
The High Court ruling stated that one of the defendants, Martin Epstein, took complete control of The Campus buyer.
“He changed its name to Culross Property Co and was then appointed as its sole director,” it said.
It added that Epstein was acting and continues to act as a front for the protagonists and that he had no real control. “The protagonists” is how the court referred to the accused executives.
“This is evident from the protagonists’ statements that they are willing to reverse the transaction on their terms, which demonstrates their impunity,” the judgement said.
“Epstein has not even made a pretence of autonomy. He has not made an affidavit to explain the part played by him.”
On 14 November 2024, Culross was placed under business rescue, and Lance Schapiro was appointed as the business rescue practitioner (BRP).
Epstein explained that the company was established to hold The Campus. Its focus was to own and manage this company.
It entered into agreements to finance the R1.3 billion acquisition of The Campus. However, this deal faced legal challenges.
Legal proceedings were initiated in October 2022, challenging the validity of the sale and purchase of the rental enterprise entered on 11 October 2019.
This dispute has stalled potential transactions, as the pending litigation deters potential buyers and refinancing options.
It challenged the validity of the agreement related to the sale of The Campus, seeking the return of the property to Dimension Data.
As the High Court ruling declared the transaction void, Culross Property Co received a demand for this money.
“This debt obligation has placed an unsustainable financial burden on the Culross Property Co,” Epstein said.
He explained that Culross Property Co was unable to pay certain of its debt and that it was unlikely to change.
“The Company’s major creditor issued a letter of demand on 5 November 2024, requiring repayment of the outstanding balance by 8 November 2024,” Epstein said.
Culross Property co said that given the severity of its financial situation, the board believed that placing the company into business rescue was the most prudent course of action.
“There is a reasonable prospect that business rescue proceedings will provide a pathway to resolve the company’s financial distress.”
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.