Five years into a 25-year, groundbreaking biodiversity research project in the Karoo that cost R82m to set up, its billionaire main sponsor lost interest and, over breakfast one morning in January 2021, pulled the plug on it all. (He had shortly before hinted that he would rather have liked to use some of the R60m he’d invested in the Karoo project to buy a small hotel on a Greek island where he’d recently spent a happy holiday). With that, the project that enjoyed international recognition and had taken years to set up (with funding from inter alia the Development Bank’s Green Fund and the Global Environmental Facility of the World Bank) was instantly and irretrievably laid to waste, triggering a legal war of attrition that has been raging for the past year. This week, a summons was issued in which the project managers are claiming R79.7m in damages from their once most-favoured sponsor.
By Martin Welz (Part One)
“The terms of this Agreement shall at all times be and remain confidential, and no Party shall be entitled to make any public announcement of any of the aspects of this Agreement without the consent in writing of all the Parties to this Agreement […] This obligation shall endure [remain in effect], notwithstanding termination or cancellation of this agreement.”
That’s the sort of clause in a contract that immediately has an investigative journalist wide awake because it’s a fair guess that at least one of the people involved (“Parties”) wishes to make sure you don’t get to know what he’s been up to.
Add the next paragraph and it’s more than a fair guess: “The parties irrevocably and unconditionally undertake that they will not, for whatever reason, lodge complaints against any of the other parties with any regulatory authority, legal forum or otherwise … “
What? No running to the Legal Practice Council? Or the Reserve Bank or SARS? The lawyer who drew up that contract was obviously relying on secrecy as much as his client was.
Another clause in the same vein: “… [the Parties] shall not make any oral or written defamatory or derogatory statements about the other parties to any third party [person], nor shall they solicit any third party to make such defamatory or derogatory statements […] which are intended or reasonably likely to disparage the other party or otherwise degrade the other party’s reputation.”
When the same ‘Parties’ are then required to undertake to “engage in good faith, collegiately (sic) and collaboratively going forward”, you may safely assume those three worthy sentiments have been notably lacking between them.
All these classic clauses appear in a proposed settlement agreement drafted in May last year by Cape Town attorney Andy McPherson – of the firm Smith Tabata Buchanan Boyes (STBB) – on behalf of his billionaire client, one-time fund manager Timothy Allsop (Nedbank, Polaris Capital, Abax Investments. Allsop had some years back emigrated to Bath in England while a significant part of his fortune migrated to Mauritius. (“The political background is giving me the heebie-jeebies,” he explained in a letter. The ANC’s threatened Expropriation Without Compensation was a particular concern.)
Before emigrating, Allsop set up a non-profit trust, the Tamarisk Trust, of which he was a trustee and which features prominently in the story we are about to relate.
The other party who was supposed to sign the agreement – but chose not to – is medical doctor, environmental researcher and activist Dr Bool Smuts, in his personal capacity and as a trustee of the Landmark Foundation Trust. BizNews readers have met him before in our reports on the baboon and porcupine case.
An extensive BizNews investigation reveals our suspicions about those cautionary legal clauses were justified. For a start, that clause prohibiting complaints to regulatory authorities could at least partially be explained by attorney McPherson’s own sensitivity on the subject, given his appearance in the widely reported case of Law Society of the Cape of Good Hope v McPherson and Others (Oct. 2009). Most lawyers would in any event argue that prohibiting complaints to regulatory authorities is invalid because it is, in legal language, contra bonos mores: harmful to the moral welfare of society.
As for that proposed undertaking to ‘engage in good faith, collegially and collaboratively’, here is the reality, as expressed in a letter Bool Smuts addressed to Allsop’s attorney McPherson on 27 May 2021:
“Again I must endure your arrogant lawyer threats and slightly hysterical response. Please spare me that!”
And in the same letter:
“I have made no threats save to inform you we will not allow a billionaire tax emigrant to appropriate more than R30 million [of] state, charitable and private investments in a partnership/joint venture and to destroy a globally significant conservation project, not to mention the damage inflicted on Landmark Foundation, several individuals, and 18 families in his act of trying to appropriate such investments for [his] own gain.
“We had at all times, until you got involved, acted in good faith, friendship and reverence to Mr Allsop. We are working as fast as we can on the [draft] settlement agreements […] to reflect the agreements we understood we [had] reached in April – before you tried to engineer through legal gymnastics and by stealth a repeat of the 5 January repudiation and the appropriation of investments [of other parties] in the partnership.”
To understand the nature of the partnership/joint venture embarked upon by Allsop and Smuts and their respective trusts – and how a globally significant conservation project in which close on R100m was invested – came to nought as a result of Allsop’s sudden decision to abort the venture five years into the 25-year project, we need to go back to the beginning of the story.
It has been assembled from their correspondence, interviews and the records of the eight High Court applications brought in the past year by one or the other of them.
Smuts describes their early relationship in an affidavit filed in response to a High Court application filed in November last year by a company controlled by Allsop’s Tamarisk Trust to have Smuts declared a “delinquent” company director. (They have not proceeded with the case.) An edited extract from that affidavit:
“It is important that I elaborate on the history of the relationships (both contractual and personal) between Allsop, his trust Tamarisk, the company Kromelboog, and Landmark and myself. This context and chronology will show […] that this application has been brought to maliciously and vexatiously silence me.
“Tim Allsop and I first met in about 2007 when he began to support Landmark projects through charitable donations from his erstwhile companies, Polaris Capital and later, Abax Investments. We became close personal friends and later collaborators in conservation efforts. Allsop was a co-trustee of the Landmark Foundation from 2013 until August 2019.
“I am the founder (in 2004), a trustee and the executive director of Landmark, a conservation NGO, registered as a charitable trust. One of Landmark’s projects, known as the Shepherding Back Biodiversity Project (SBBP), reintroduces traditional herding as a conservation and employment initiative in semi-arid livestock agriculture areas such as the Karoo, and through it seeks to restore biodiversity patterns and processes on production landscapes.”
This project had its genesis in 2008, in a research collaboration between Smuts and Dr Jeannine McManus, a Wits science graduate and research fellow at the University of the Western Cape.
Smuts continues:
“I was project manager on behalf of Landmark. It took until 2014 for it to be implemented, following extensive planning and negotiation with the South African Government, the United Nations Environmental Programme (“UNEP”), the Global Environmental Facility (“GEF”), the Development Bank of Southern Africa’s Green Fund, the Woolworths Trust, the National Lotteries Commission and Allsop and his Tamarisk Trust.
“While I was able to raise significant funding for the project both locally and internationally, the SBBP required long-term tenure over operating farmland for its effectiveness to be properly assessed.
“In late 2013, Allsop and I both attended a Landmark trustees’ meeting. We shared a car ride back to Plettenberg Bay after the meeting. During the trip, Allsop asked me what the biggest challenge was facing Landmark in regard to implementing the SBBP.
“I told him that the greatest impediment was acquiring the right to utilise and operate farmland for the generational period of 25 years, the time required for the project to be completed. [Within that time period, both extremes of drought and flood – and all the stages between – were likely to have been experienced.] He told me that he wanted to solve that problem for Landmark – he would make available R20 million for the acquisition of a suitable farm property and that Landmark could have generational tenure of 25 years over the farmland. Allsop’s only condition was that any increase in the value of the farms would accrue to the owner, which would be him or one of the trusts that he controlled.”
(In an interview, Smuts recalled how on another trip together, Allsop had suddenly declared: “Today I became a rand billionaire!”)
Smuts’ affidavit continues:
“We reached agreement on these terms, effectively establishing a joint venture (JV), and I began to make plans to search for a suitable farm.”
“At the time of agreeing to the JV, Allsop was in the process of financial emigration. He told me that he felt slightly guilty about leaving South Africa (where he had made his fortune) and wanted to contribute something that would have a lasting benefit for the country; a legacy project. Perhaps naively, I believed at the time that this was Allsop’s sole reason for entering the JV. At the time he was in the process of getting South African Revenue Services (“SARS”) and Reserve Bank (“SARB”) clearance for this emigration as he was a high nett-worth individual wanting to take his assets out of the country and changing his tax domicilium, and would have had no legitimate reason for purchasing commercial farms other than the support of the JV. I was extremely grateful for what I believed to be simple generosity on Allsop’s part.”
“Days later, on 20 August 2013, I wrote in an email to Tim: ‘I may have been inappropriately reserved in my gratitude to you for indicating your willingness to invest in the programme. I know our success in stemming the onslaught of human depravity on the environment will at best be partial, but somehow we are compelled to try. As you said so movingly, we are obliged to look at our legacy on earth. We would be honoured to take your hand on that, and hope that our passion and vision can complement your resource investment into making a telling contribution.’
“Not long afterwards I identified a farm in the Beaufort West district called Little England as ideal for our purpose. It was derelict and for sale.
“A few months after our initial agreement I was somewhat surprised, albeit happy, when Allsop informed me that Tamarisk would authorise me to purchase farms on its behalf to an increased value of R60 million.”
(He had established that three adjacent farms were also up for sale and was eager that we should buy them as well.)
On 19 January 2014, the trustees of the Tamarisk Trust (including Tim Allsop) formally resolved to acquire farms for the Landmark projects “for a maximum value of R60 million”. They authorised Bool Smuts to sign “any and all” documentation necessary to give effect to the purchase of these farms and authorised Mr Dale Kohlberg (a Tamarisk trustee) to then sign leases of these properties to the Landmark Foundation.
“The existence of the JV is also apparent from the undertaking signed by Allsop on 23 December 2014, in which he guaranteed and underwrote a funding commitment from the Global Economic Fund (“GEF”) as part of the co-funding by the Development Bank of SA’s Green Fund participation to the tune of R 7,5 million. It provides that the guarantee offered is ‘for the implementation of the Shepherding Back Biodiversity Project by [Landmark]’.”
The GEF document that was copied to Allsop, refers repeatedly to the long-term nature of the project, as reflected by its use of such phrases as: “generational time frame”, “more than two decades”, “rollout over the next 20–25 years”, “interventions over the next 20–30 years”, “the evaluation will be ongoing throughout the 25 years of the project”, “20-year biodiversity impact assessment”.]
(The existence – or not – of such a joint venture agreement and its status in relation to other subsequent short-term agreements (for instance, the farm lease agreements referred to above were for a five-year period, which was renewable) lies at the heart of this story, making it necessary, from time to time, to canvass the issue in some detail. – Ed.)
On 14 August 2015, accountants Moore Stephens in Cape Town – as accountants to the Tamarisk Trust and Mr Timothy Allsop – wrote to confirm that Tamarisk and Allsop had transferred US$4.9m (then approximately R60m) as co-financing for the Landmark Foundation Shepherding Back Biodiversity Project. It was to be seen as co-financing to other sources, inclusive of an application to the Global Environmental Facility. It went on to state:
“Specifically, the monies will support the establishment of 1. A herding academy to facilitate the development of shepherding and its ancillary methods of livestock management; 2. Field interventions to test and establish the various methods of human wildlife conflict mitigations on livestock farms.”
While the central purpose was to conduct a scientific experiment to test ecological land management and livestock farming methods that would be compatible with preserving wildlife diversity on the same land, the experiment of necessity included the buying and selling of farm livestock – trading for profit – to prove the farming method economically viable. The Landmark Foundation, a registered non-profit organisation could not trade.
Kromelboog Conservation Services (Pty) was established for this specific purpose on the advice of Allsop’s accountants, who saw to all the secretarial work necessary for its establishment. Allsop’s Tamarisk Trust was its shareholder and Bool Smuts became its sole director. “I accepted the arrangement in good faith,” said Smuts. (Kromelboog, too, concluded a five-year management agreement with the Landmark Foundation, but this was renewed twice.)
Although all Kromelboog’s shares were owned by Allsop’s Tamarisk Trust, according to Smuts, “its role was embedded in the Shepherding Back Biodiversity Project. It had no purpose outside of that project,” he declared in an affidavit. “I was a functionary within the SBBP objectives. This is apparent from the fact that I was appointed as its sole director and for 6 years was not remunerated for the service of managing the company. Kromelboog was an integrated part of the SBBP and I contributed my service to the SBBP as director of Kromelboog – an in-kind contribution to the JV.
“On the basis of the JV, Landmark invested approximately R22 million of charitable and State donor funds into the infrastructure and ecological rejuvenation of the farms, and a further R8 million of personnel sweat equity contributions to restore and improve the farms’ biodiversity, to rejuvenate the agricultural land and the built infrastructure owned by Tamarisk. This investment was in the foundational and establishment costs to be carried by the donors to create the enabling environment for the generational SBBP,” Smuts declared.
Read also:
- Martin Welz: When taking a stand, politeness be damned
- Supreme Court of Appeal finds in favour of animal rights activist Bool Smuts
- Martin Welz: Animal rights and human privacy – a riveting mix
