Publication: Sunday Times Issued: Date: 2004-10-24 Reporter: Jeanne van der Merwe

Russian Arms Dealer in Battle to Keep Cape Farm

 

Publication 

Sunday Times

Date 2004-10-24

Reporter

Jeanne van der Merwe

Web Link

www.sundaytimes.co.za

 

Bank sues Mark Voloshin over R6.6-million debt

Voloshin poured more than R40m into the property

A controversial Russian arms trader is fighting to keep his prize-winning Cape wine farm as Standard Bank moves to recover debts of R6.6-million from him.

Set in a picturesque valley between Stellenbosch and Kuils River, the farm Hazendal belongs to, among others, Russian citizen Mark Voloshin, founder and chairman of the international Marvol Group.

The company’s local subsidiaries include a solar-panel manufacturer, Liselo, and a company that advertised its links with the Russian defence industry. The company, Marvotech, was chaired by the late Defence Minister Joe Modise who, with Voloshin, became entangled in a controversy over a deal to fit Russian jet engines to South African fighter aircraft.

Voloshin poured more than R40-million into the farm after buying it in 1994. He lavishly renovated the homestead, building a restaurant and a museum stocked with Russian Orthodox icons.

Erstwhile Western Cape Premier Hernus Kriel opened the winery in 1998. Photo albums on display in the estate’s plush wine-tasting room show Voloshin with former President Nelson Mandela, Kriel, his successor Gerald Morkel and other members of Cape high society.

Hazendal’s attorney Waheed Badrodien said the debt had been reduced to about R3.5-million since Standard Bank started the action in February. Hazendal’s former managing director, Delamore Terwin, claimed in court papers that too much had been spent on renovations at the expense of planting new vineyards. The bank is attempting to place the farm under liquidation.

Hazendal has produced award-winning wines since Voloshin took over. But the estate ran into financial trouble two years ago, failing to respond to a final letter of demand for R6.6-million from the bank.

André Tredoux, a manager in Standard Bank’s retail credit division, said in papers before the Cape High Court that Hazendal management “made various proposals” for settling its liability but reneged on them.

In July 2002, Voloshin promised monthly payments of R500 000 to clear the debt, claiming the Marvol Group had signed a contract that would earn $100 000 a month, but “due to the confidentiality involved in this kind of contract”, he could not say exactly what it entailed. The farm only made one payment in terms of the deal.

In March last year, the estate management tried to sell the farm at a much-publicised auction, expecting at least R25-million. But the highest bid was R17-million and the offer of sale was withdrawn.

Voloshin also announced in a local newspaper that he was leaving South Africa.

Tredoux said Hazendal owed more than R16-million to its holding company and R16.6-million to another company in the Marvol Group, COAB.

Two representatives of other Marvol Group companies, Tanja and Leo Schumacher, have filed affidavits opposing Standard Bank’s action.

The Schumachers blamed the business’s poor performance on Terwin. However, Terwin denied any mismanagement.

The case has been postponed to December 6 for argument.

With acknowledgements to Jeanne van der Merwe and the Sunday Times.