The first inkling of this trust emerges in the leaks when, in May 2015, the Bermuda-based law firm Appleby<\/a> was asked by the executors of Mandela\u2019s estate to provide a \u201clegal opinion on the validity of an Isle of Man Trust, known as the Mad Trust.\u201d<\/p>\n But the circumstances of exactly how the Mad Trust \u2014 a reference to Mandela\u2019s clan name, Madiba \u2014 was to be established in one of the most secretive tax jurisdictions has been hotly contested in court in recent years.<\/p>\n Mandela, who emerged after 27 years in prison to lead the talks that led to the dismantling of apartheid in 1994, remains a deified figure in SA, nearly four years after his death.<\/p>\n But following the money trail of the Mad Trust revealed an epic behind-the-scenes clash between Mandela\u2019s former lawyer, Ismail Ayob, and the executors of his estate, led by the country\u2019s former deputy chief justice, Dikgang Moseneke, over the R17.8-million left in the trust\u2019s account.<\/p>\n The original 17-page trust deed shows the Mad Trust was established by Ayob on January 21 1995 on behalf of Mandela as a repository for donations that could be used for \u201ccommunity-based beneficiaries, as well as educational and charitable objects .\u201d<\/p>\n It said: \u201cThe trust shall be domiciled in the Isle of Man, and the laws of the Isle of Man shall be of application.\u201d<\/p>\n Quite why Ayob chose the Isle of Man isn\u2019t clear. The Tax Justice Network ranks the Isle of Man poorly on transparency: it doesn\u2019t keep a register of trusts, and doesn\u2019t require proper disclosure to the authorities in someone\u2019s home country.<\/p>\n That trust deed is dated four months after Ayob opened an account at the London branch of the SA bank Nedbank in September 1994 in the name of the Mad Trust, with \u00a32.4-million. It cited the \u201csettlors\u201d of the trust (essentially the founders) as \u201cMr and Mrs At the time, that would have included Winnie Madikizela-Mandela, who divorced Mandela only in 1996.<\/p>\n By October 2003, that London account held $2,096,220, according to an audit of Mandela\u2019s affairs by Deloitte & Touche at the time. In 2009, the Mad Trust\u2019s money was transferred back to a Nedbank account in SA .<\/p>\n Ayob, who is now 75, still operates his law firm from Houghton, a stone\u2019s throw from Mandela\u2019s last home. The lawyer had known Mandela since the 1970s, and was one of the few allowed to visit him in jail.<\/p>\n Ayob\u2019s office is stacked with wall-to-wall apartheid struggle memorabilia: faded photos of Mandela and other activists, arrest warrants for struggle icons and a framed ballot paper from SA\u2019s first free election in 1994.<\/p>\n In an interview, Ayob says Mandela \u201cwanted the trust created so that he could give away money to people abroad, who\u2019d been \u2018good\u2019 or needed it \u2014 he was always very generous.\u201d<\/p>\n He says, for example, that Mandela used part of the money in the Mad Trust to support Margot Honecker, wife of Erich Honecker, the last president of East Germany (he resigned weeks before the Berlin Wall fell in 1989).<\/p>\n Margot Honecker, considered the most powerful woman in the communist state, fled to Chile soon after her husband was extradited from Russia back to Germany. Honecker eventually joined her in Santiago, Chile, where he died in May 1994.<\/p>\n Ayob says she\u2019d fallen on hard times. \u201cAt the time, she was really struggling, as she had no pension. So Mandela said he\u2019d like to assist her. From time to time, he\u2019d tell me to give that person money, or this person money, and that\u2019s what we\u2019d use the trust for,\u201d he said.<\/p>\n It\u2019s a remarkable revelation \u2014 not least because Margot Honecker was anything but a defenceless widow: her mauve-coloured hair and tough personality earned her the title of the \u201cpurple witch\u201d of East Germany. She held the post of education minister for many years, reshaping the syllabus to encourage hard-line socialism.<\/p>\n Asked why the trust was to be governed by the laws of the Isle of Man, Ayob says: \u201cAt the time, it was quite difficult to move money in and out of SA, especially to foreign countries\u201d. It seemed a sensible solution, he said.<\/p>\n Court papers show the trust was declared to the SA Reserve Bank. Ayob says it was \u201cfully legally compliant\u201d.<\/p>\n However, few people, even in Mandela\u2019s inner circle, seem to have known of the trust\u2019s existence, until after he died in December 2013, when the cataloguing of his assets began.<\/p>\n Some of those contacted doubt whether Mandela was aware of the mechanics of this offshore account.<\/p>\n \u201cI would be very surprised if Madiba ever gave instruction to have offshore assets, or was aware he had offshore assets,” says Michael Katz, chairman of law firm Edward Nathan Sonnenbergs, and the lawyer for the executors of Mandela\u2019s estate.<\/p>\n Others are sceptical of Ayob\u2019s account. They point to a much-publicised fallout with Mandela in 2004.<\/p>\n Ayob had overseen Mandela\u2019s legal affairs for decades. But in 2004, Mandela\u2019s advisers accused him of exploiting Mandela\u2019s name to sell artworks in the US for millions. Mandela filed court papers describing Ayob as \u201cduplicitous\u201d, ordering him to quit as a trustee of all his trusts.<\/p>\n (Appleby, in its client screening, flagged that Ayob had been \u201creportedly investigated by police for alleged failure to channel royalties into the Mandela Trust in 2003 [R15-million]\u201d, but added that he \u201cdenied any wrongdoing\u201d.)<\/p>\n Says one of Mandela\u2019s confidantes: \u201cI knew Mandela for years, and I never saw him as angry and as emotional as he was with Ayob.\u201d<\/p>\n Two years ago, the estate\u2019s discovery of the Isle of Man account led to a furious court scrap, revealed here for the first time.<\/p>\n Mandela\u2019s estate demanded the money in the Mad Trust\u2019s bank accounts \u2014 which at last count consisted of about \u20ac1.1-million and R223,000 in cash, about R19.8-million in today\u2019s money.<\/p>\n But Ayob, still the sole trustee, refused. He said he\u2019d let a court decide. So the messy scrap went to Johannesburg\u2019s high court.<\/p>\n The court papers show how in November 2003, Mandela wrote to Ayob, asking him for details about the Mad Trust: who is the signatory, where are the bank statements, and what money is in the account?<\/p>\n Ayob replied, saying Mandela was the \u201cproprietor \u201d, but he was sketchy on the details. The court papers show that Ayob later told his lawyers that the executors wanted him to \u201caccount to them for all the transactions from inception to date, [but] it is common cause that I have no such information.\u201d<\/p>\n Ayob said: \u201cAll the funds held in the Mad Trust came from foreign beneficiaries, and none of the funds held in the Mad account came from local sources .\u201d<\/p>\n He said the money came to Mandela on his \u201cnumerous travels abroad\u201d, and some of the Mad Trust\u2019s money was given to Mandela\u2019s family \u2014 including his new wife, Gra\u00e7a Machel.<\/p>\n But Ayob\u2019s unwillingness to transfer the Mad Trust \u2019s funds to the estate infuriated Moseneke, who dubbed the lawyer \u201cuncooperative and obstructive\u201d.<\/p>\n Moseneke argued that the money was Mandela\u2019s \u201cpersonal funds\u201d as the Mad Trust had never been properly created.<\/p>\n Ayob denied this. In a letter to the estate in May 2015, he said: \u201cI have made it clear that the Mad Trust is a valid trust, that the laws of the Isle of Man apply thereto, and that the object of the trust is primarily educational and charitable.\u201d<\/p>\n In another letter, he says: \u201c[Mandela] donated the funds to a valid trust. He never revoked his donation. He never terminated [my] instructions.\u201d<\/p>\n Moseneke, in his court papers, fired back that Ayob should no longer have been a trustee of the Mad Trust anyway, since Mandela had demanded he quit all his trusteeships in 2004.<\/p>\n Ayob, in an affidavit in September 2015, replied: \u201cMy mandate to act on behalf of the late Mr Mandela was indeed terminated, but that did not result in my removal as the sole trustee of the Mad Trust.\u201d<\/p>\n Moseneke said Ayob\u2019s version was largely empty and uncreditworthy. \u201cHis assertion that he established the Mad Trust at the request of Mr Mandela is a good example. Where? When? How, and why did Mr Mandela give the instruction? Why did he open the account before the trust deed was signed? Why was the trust never registered?\u201d<\/p>\n It was then that the estate hired experts to give a verdict on whether the Mad Trust was legitimately established in the Isle of Man.<\/p>\n One of those companies was Appleby. In 2015, Appleby gave an opinion, in which it said it was hard to tell, since there was no register of trusts in the Isle of Man. But it said: \u201cUnder the laws of the Isle of Man, the Mad Trust would be void (from the outset) on the basis that it fails to identify adequately any beneficiaries.\u201d<\/p>\n Maitland, a legal firm in the Isle of Man, said while \u201cit appears that there was a clear intention to create a trust\u201d and that \u201cthe choice of Isle of Man law to govern the trust is a valid choice\u201d, it warned the trust may be \u201cvoid for uncertainty\u201d.<\/p>\n Finally, on November 11 2015, Judge Lucy Mailula laid the matter to rest. She ruled the estate was the \u201cbeneficial owner\u201d of Mad Trust\u2019s money, while Ayob had \u201cno authority\u201d over the funds.<\/p>\n The money \u2014 equal to R17.8-million at the time \u2014 was transferred to the estate.<\/p>\n Though the Paradise Papers have added another piece to the puzzle of Mandela\u2019s money, the estate has yet to finish its labyrinthine task of accounting for the funds.<\/p>\n This week Madikizela-Mandela, argued in SA\u2019s supreme court of appeal that she should be awarded his former homestead in Qunu, rather than allowing it to remain in the hands of the estate.<\/p>\n In 2013, SA\u2019s high-priority crimefighting unit, the Hawks, launched a probe into Mandela\u2019s \u201cmissing millions\u201d. Nothing has yet come of it, in part because the criminal authorities have been so severely weakened under SA\u2019s current president, Jacob Zuma.<\/p>\n * Written in collaboration with the <\/em>Financial Mail (RSA)<\/em><\/p>\n The leaks reveal that a trust was apparently set up by Nelson Mandela\u2019s lawyer under Isle of Man law.<\/p>\n","protected":false},"author":7,"featured_media":22157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=4752"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4752\/revisions"}],"predecessor-version":[{"id":30530,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4752\/revisions\/30530"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22157"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=4752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=4752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=4752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nMandela\u201d.<\/p>\n![](\"https:\/\/amabhungane.org\/wp-content\/uploads\/2018\/03\/250x106.jpg\")
<\/a>
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