Padel deal turns sour

R40M CLAIM: RESERVE BANK TO FREEZE VAPE SHOP OWNER'S ACCOUNTS

- Ciaran Ryan

SMOKESCREEN. The owner of the House of Cloud says he has nothing to hide but has asked for 'forgiveness'. Several law enforcement agencies are now involved.

(Picture: Bloomberg)

Mohammed Ebrahim and vape shop owner Muhammad Karolia were once part of the same large Muslim community scattered across the eastern suburbs of Joburg.

There's not a lot of love between them now. Ebrahim claims in his court filings that he invested about R40 million with Karolia with the expectation that it would be used to develop padel courts east of Joburg.

That never happened, and Ebrahim wants his money back, fearing it is being used to fund Karolia's lifestyle.

The High Court in Johannesburg last Thursday ordered the South African Reserve Bank (Sarb) to put a freeze on all bank accounts under the control of Karolia, and ordered Absa and FNB to likewise freeze his accounts and provide eight months of bank statements on his accounts so that Ebrahim can see what has happened to his money.

Moneyweb caught up with Karolia, who says he has nothing to hide.

"They can get the bank accounts. They will see that the money is there," he told us.

Karolia says the sum involved is R26 million, not R40 million. Of this, R20.5 million is sitting in a 60-day Absa call account. The remaining R5.5 million has been paid back over a period of months, he insists, though the court papers tell a different story: an amount of close to R1 million has been repaid after Ebrahim started to threaten legal action.

Neither Karolia, nor his lawyer appeared in court to defend it.