A legal dispute over a £250,000 funding offer in 2013 has laid bare a complex network of legal disputes, false assurances, and financial irregularities spanning two decades. At its core stands Errol Elsdon, a representative for Black Rock Mining, who asserted he could obtain financing for Nkosana Makate’s lawsuit against Vodacom by using an unrelated claim against Old Mutual. Court filings and trust records now confirm Elsdon had no involvement in that case—and the collateral he proposed held no value.
The Old Mutual lawsuit, launched by the Living Hands Umbrella Trust (LHUT) in 2010, sought R1.124 billion in damages, alleging the insurer had failed to exercise due care when transferring mineworkers’ death benefits to Fidentia Asset Management. Those funds, originally paid by the Mineworkers Provident Fund to dependents of deceased miners, were later embezzled by J Arthur Brown, Fidentia’s former CEO, in what became one of South Africa’s largest corporate frauds. Brown received an effective 15-year prison sentence in 2014, while Graham Maddock, Fidentia’s financial director, was jailed for seven years after pleading guilty.
Elsdon’s 2013 Funding Proposal
In 2013, Elsdon sent an email to Walton Eddlestone proposing to use LHUT’s claim as security for the £250,000 investment—equivalent to R3.75 million—for Makate’s Vodacom case. He guaranteed repayment within 90 days if the lawsuit failed. Wilna Lubbe, a trustee of LHUT and Makate’s attorney, stated that Elsdon had no connection to the Old Mutual case. “LHUT had no agreement with Elsdon, Schoeman, Black Rock, or Kevin Brian Jenkins,” she said. The trust’s actual funding came from GDAF, a Bermuda-based entity under the Commercial Intelligence Funds Group (CIFG), which provides litigation financing across Africa, Asia, and the Middle East.
The LHUT case stretched for years. In 2022, the Gauteng High Court ruled in favor of the trust, determining Old Mutual had acted improperly. However, the Supreme Court of Appeal reversed that decision in 2024, concluding Old Mutual had no legal responsibility to prevent the loss and that no negligence could be established. The court also rejected any connection between the fund transfer to Fidentia and Brown’s subsequent theft.
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False Claims and GDAF Involvement
Elsdon’s assertions about LHUT’s case were not only false but legally meaningless. By the time he made the funding offer in 2013, the trust’s lawsuit was already being supported by GDAF, not by Elsdon or his companies. Court documents reveal GDAF III provided the litigation funding under a confidentiality agreement with LHUT’s curators, Dines Gihwala and George Papadakis. Gihwala’s history, however, included serious concerns: in 2014, the Western Cape High Court declared him a delinquent director for misusing company funds, a ruling later upheld by the Supreme Court of Appeal. He was removed from the attorney’s roll in 2019.
A March 2019 Public Protector report found no irregularities in Gihwala’s role as a curator for Fidentia, despite his civil penalties. His resignation in 2014 followed the High Court’s adverse findings. The trust’s funding structure, through GDAF and CIFG, remained unclear, with Lubbe confirming no direct agreements existed between LHUT and Elsdon’s entities.
The Old Mutual case was part of a broader pattern. Elsdon, formerly the head of Sterling Rand, a litigation funding firm, claimed his company only backed cases with at least a 70% chance of success. Yet his ties to LHUT’s funding were nonexistent, according to Lubbe. Chris Schoeman, Elsdon’s former partner at Sterling Rand, had previously told Business Day that the firm was financing the R2.4 billion LHUT claim, a figure that contradicted court documents, which listed the claim as R1.124 billion.
Supreme Court Clarifies Negligence vs Fraud
The Supreme Court of Appeal’s 2024 reversal of the High Court’s ruling in the LHUT case clarified a key legal point: Old Mutual had no legal duty to prevent the loss, had not acted negligently, and no factual or legal link could be established between it transferring the money to Matco Trust’s Standard Bank account for investment by Fidentia Asset Management and it ultimately being plundered by Brown. The judgment also dismissed any link between the insurer’s actions and Brown’s fraud, which had already resulted in his criminal conviction. This distinction-between negligence in asset transfers and criminal misappropriation-became central to the trust’s failed claim.
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While the Old Mutual litigation was ongoing, court records show Sterling Rand had no formal role in funding it. Instead, GDAF III, a Bermuda-based entity under CIFG, provided the financing. The funding agreement between GDAF and LHUT’s curators, Gihwala and Papadakis, remained confidential, with terms never disclosed publicly. Court records confirm GDAF’s involvement began in 2011, well before Elsdon’s 2013 funding proposal for Makate’s Vodacom case. The trust’s 2013 status report, issued by Lubbe, stated that “Global Fund” (later identified as GDAF) was still financing the litigation, a claim Elsdon’s representatives never challenged in court.
Makate Case Funding Inconsistencies
The funding inconsistencies extend to Makate’s legal battle. Elsdon’s 2013 offer to secure £250,000 for the Vodacom case depended on an interest in LHUT’s lawsuit that did not exist. By the time of his proposal, GDAF had already funded the trust’s claim for two years, with no involvement from Elsdon or Sterling Rand. Lubbe’s statement that LHUT had “no agreement” with Elsdon or his entities was supported by the trust’s reliance on GDAF III, which operated under confidentiality. This arrangement left Elsdon’s funding promise legally unsound; yet Makate’s team accepted it, leading to an 18-year legal fight in which Elsdon’s Black Rock Mining later claimed 40% of any settlement.
The Public Protector’s 2019 report on Gihwala’s curatorship addressed lingering questions: while the Western Cape High Court ruled him a delinquent director in 2014 for misusing funds, no wrongdoing was found in his role as a curator for Fidentia. The Supreme Court of Appeal upheld this distinction in 2016, allowing Gihwala to keep his position despite the findings.