The High Court in Cape Town has authorised Old Mutual Alternate Risk Transfer Insure Limited (OMART) to access the premises of SA Guarantee Specialists (Pty) Ltd (SAGS) to search and remove data related to guarantees issued in terms of their binder agreement.
The Old Mutual Insure business brought an urgent application, contending that SAGS had failed to provide it with critical documents and data about any guarantees that might have been issued in its name without authorisation.
OMART is licensed to issue guarantees within South Africa but prohibited from conducting such business abroad. It operates as a cell-captive insurer, allowing non-insurers to manage insurance through ring-fenced cells on OMART’s licence.
SAGS, a licensed financial services provider, served as OMART’s underwriting manager. It administered guarantee insurance on OMART’s behalf via a dedicated cell, established through a shareholders’ agreement and a binder agreement dated 8 October 2020.
The binder agreement defined SAGS’s mandate strictly: to enter, vary, or renew policies; determine premiums; report on activities; administer IT platforms; and settle claims – all confined to South African business.
Discovery of the offshore guarantees
According to the judgment, delivered on 13 August, the issuing of unauthorised guarantees first came to OMART’s attention on 20 June this year.
OMART’s managing director, Walter Cronje, received a telephone call from Domenico Ferrinia of Ninety One Securitisation SA, expressing concern about the non-payment of a demand on a guarantee issued by SAGS on OMART’s behalf. This is referred to as the “Franki guarantee”.
The Franki guarantee, issued on 7 June 2024 and amended in April 2025 to €47 710 000 (about R989 million), secured a debt owed by a German entity to Ninety One in Luxembourg.
Cronje sought an explanation from SAGS director Carel Daniel Hanekom, and they exchanged a series of emails between 20 and 22 June.
Hanekom alleged that Ninety One was in breach of the terms of the guarantee, and SAGS had accordingly denied liability.
Responding to another email from Cronje the following day, Hanekom said SAGS had in 2022/23 disclosed to OMART that it intended to establish an international platform to write bonds in other jurisdictions. He said SAGS had engaged Ninety One during 2023, which led to the issue of the Franki guarantee. The plan was for the guarantee to be swapped within three months of its issue, replacing OMART with an international carrier, but the replacement insurer had pulled out at the last minute.
Hanekom wrote in his email: “The intention was never for the bond to be on the books of OMART for more than three months. I accept that none of the above is of any comfort, and I also accept there will be consequences for SAGS. If possible, allow SAGS four months to defend against the breaches of the bond conditions by Ninety One.”
Acting Judge Andrew Morrissey commented that Hanekom recognised that issuing the Franki guarantee was beyond OMART’s licence conditions. “It had been issued to show potential third parties who were authorised to issue such guarantees that SAGS could generate business for such bonds, with a view to it being transferred to such a third party shortly after it was issued.”
In an email on 21 June, Cronje again pressed Hanekom for answers, including a full disclosure “any other such arrangements” SAGS had entered into without OMART’s authority. He also revoked SAGS’s authority to bind new business pending the resolution of the matter.
Hanekom responded to Cronje’s queries on 22 June. His response to the request for the disclosure of arrangements SAGS had entered into without OMART’s authority was: “There are no other such arrangements.”
Meanwhile, as a result of discussions with Ninety One, OMART discovered that SAGS had issued a second offshore guarantee in June 2024 for £23.8m. This is referred to as the “Blade guarantee”.
OMART contended that the discovery of the Blade guarantee showed that Hanekom was dishonest when he said there were “no other such arrangements” in his response to Cronje’s question.
Hanekom disputed this in his affidavit, claiming his response was truthful because the “arrangement” under the Franki guarantee was unique, and his response did not constitute a denial other of guarantees.
Morrissey AJ said he had “some difficulty” accepting Hanekom’s interpretation of Cronje’s request as being so narrow as to encompass only guarantees on identical or substantially similar terms to those of the Franki guarantee.
“Significantly, Mr Hanekom chose not to use the opportunity his answering affidavit presented to clarify whether or not any other offshore guarantees had been concluded, over and above those OMART has since discovered,” the judge said.
On 24 June, OMART formally terminated the binder agreement, effective after 90 days’ notice, citing material breaches from issuing offshore guarantees beyond its licence and mandate.
OMART also demanded that SAGS provide it with a report on all the active guarantees issued to date. It further demanded access to SAGS’s system, so it could view and retrieve all data and information relating to active and expired guarantees.
OMART’s attempts to obtain information
Between 24 June and 29 July, OMART engaged with SAGS through various communications to obtain the information demanded in the termination letter.
SAGS did provide some documents and data, but OMART submitted it was not provided with all the information it required.
OMART’s attorneys sent a letter demanding an inspection at SAGS’s premises on 25 July, to access and copy specific categories of information and documents. But the scheduled inspection did not proceed because SAGS’s offices were found locked and no employees were present.
OMART’s attorneys sent a letter on 29 July, requiring the outstanding documents by 5pm on the same day. SAGS did not meet this deadline but provided additional documents on 30 July.
On 29 July, OMART’s attorneys sent a letter recording SAGS’s failure to accede to its previous demands and stating it would seek urgent court relief.
Parties’ submissions regarding OMART’s application
OMART instituted urgent proceedings in the High Court on 31 July, seeking authority to access SAGS’s business premises, to search the premises for certain documents and electronic data, and to copy or retain the documents and data.
SAGS opposed OMART’s application, characterising it as an overreach akin to an Anton Piller order – a judicial mechanism typically used to preserve evidence at risk of destruction. Counsel argued that OMART’s request for intrusive access to SAGS’s premises, including the potential use of force to search for and copy data, constituted the selection of a “nuclear option”.
SAGS contended that OMART had not established the prerequisites for an Anton Piller order, particularly the critical requirement of a demonstrable risk that evidence would be destroyed if the application was not granted ex parte.
Furthermore, SAGS argued it was proactively engaged in handing over the documents, asserting its obligation to provide the requested data matured at the end of the 90-day termination period of the binder agreement, set for 22 September.
OMART countered that the application was not an Anton Piller order but a legitimate enforcement of its contractual rights under the binder agreement.
The urgency, it submitted, stemmed from two critical needs. First, OMART required immediate access to determine whether SAGS had issued additional unauthorised guarantees beyond the Franki and Blade guarantees. Second, having taken over SAGS’s business operations during the termination period, OMART needed the data to manage the business effectively and comply with its regulatory obligations.
OMART’s counsel highlighted the potential scale of the risk, saying that SAGS’s disclosures suggested an exposure of R2.5 billion, while intermediaries indicated it could reach R4.3bn.
Claims of urgency well founded
Morrissey AJ agreed with SAGS that the relief resembled an Anton Pillar order in its intrusiveness but distinguished the basis on which that relief is premised. Unlike Anton Piller applications, which require a likelihood of evidence destruction and are typically ex parte, OMART’s application was premised on contractual entitlements, with SAGS given notice and the opportunity to oppose.
The court found OMART’s claims of urgency well founded, driven by the unknown extent of SAGS’s unauthorised activities. This concern was compounded by OMART’s distrust of SAGS, particularly because of Hanekom’s response to queries about “other arrangements”.
The court recognised that unauthorised guarantees could involve “substantial sums of money” and breach OMART’s licensing conditions, exposing it to regulatory scrutiny and reputational harm.
Morrissey AJ accorded limited weight to OMART’s estimate of a potential exposure of R2.5bn to R4.3bn, because these allegations were made in reply papers and in relatively unsubstantiated terms. Nevertheless, the judge found a “reasonable prospect that OMART is facing a much larger problem than it is currently aware of”.
The court rejected SAGS’s argument that OMART’s delay undermined urgency, finding that OMART had acted reasonably by initially seeking informal compliance.
Contractual entitlements under the binder agreement
The court upheld the validity of OMART’s termination notice of 24 June, finding that SAGS’s issuance of the Franki and Blade guarantees constituted a material breach of the binder agreement.
Having validly terminated, OMART was entitled to exercise its rights, in terms of the agreement, to obtain information and perform SAGS’s functions and limit activities and mitigate risks during the 90-day period.
The court dismissed SAGS’s claim that OMART’s demands were premature or invalid.
Even without termination, OMART had broad access rights: “Clause 6.6 of the binder agreement contains an express acknowledgement by SAGS that OMART has a right to access any data regarding any policy and policyholder held by SAGS as and when such data is requested by OMART,” Morrissey AJ said.
The court concluded that OMART was entitled to access SAGS’s records and data related to its obligations under the binder agreement.
What the court ordered
Morrissey AJ granted OMART’s core relief – an order allowing supervised access to SAGS’s premises in Somerset West to search for, copy, and potentially remove data, including through forced entry if necessary.
The judge sought to reconcile OMART’s urgent need for the data with SAGS’s right to contest the scope of access.
Notably, the order was suspended for 15 court days, with provisions for extension by agreement or further court direction, and an automatic lapse on 2 February 2026 unless executed. The court designed this mechanism to encourage voluntary co-operation between OMART and SAGS, recognising the intrusive nature of the relief and the potential for overreach.
The court authorised a team comprising a supervising attorney, six forensic experts, OMART representatives, and the sheriff to conduct the search. The order authorised the examination of digital devices – covering networks, computers, and cloud storage – and the disclosure of passwords if necessary.
The order delineated a comprehensive scope of data OMART may access, covering documents and information related to guarantees issued by SAGS on OMART’s behalf, including 16 categories for general guarantees and seven categories each for information and Ninety One-specific documents.
The supervising attorney must monitor execution, prepare a detailed inventory of removed items, and provide copies to SAGS and OMART’s attorney. A report to the court on the execution process is required, and removed documents must be returned within a week, with OMART permitted to retain copies.
The order may only be executed on weekdays between 8am and 6pm, upon 24 hours’ notice. OMART must compensate SAGS for damage caused by anyone who exceeds the terms of the order.
