Judge linked in claim of misappropriated trust funds

In another jolt for the Western Cape High Court division following the ongoing Hlophe saga, a Daily Maverick report reveals that the Legal Practice Council (LPC) has lodged an application with the High Court to have two directors of a law firm linked to Judge Mushtak Parker struck from the roll of attorneys in connection with an alleged misappropriation of around R8m from the firm’s trust fund. The matter, set to be heard on 21 February in the same division rocked by allegations of 'gross misconduct' against each other by Judge President John Hlophe and his deputy, Judge Patricia Goliath, was originally brought to the attention of the Cape Law Society by a whistle-blower in July 2018. The complainant alleged that the trust fund of Parker and Khan Incorporated, of which Parker was a director, was in arrears by about R8.2m. Further allegations are that the firm did not generate sufficient funds to pay its creditors, that trust account funds were used to pay creditors and that the trust’s client ledgers had been manipulated to ‘make it appear that the accounts balanced’. The LPC has asked the court for a curator to be appointed to administer the accounts of Parker & Khan Incorporated, pending an application to strike two directors, Abdurahman Khan and Irfan Kassiem Parker, from the roll. In his answering affidavit, Irfan Parker reveals that his brother, Mushtak Parker, a former director of the firm until he resigned after being appointed to the Bench in 2017, had ‘stumbled on the trust shortfall’ and had confronted Khan about this. ‘I raised the issue with both of my fellow directors (Khan and Mushtak Parker) directly and in person until Mushtak left the firm, and thereafter during the latter part of 2016, by way of WhatsApp communications,’ Irfan Parker revealed. The DM says it contacted Judge Parker to determine whether he disclosed to the JSC during his interview in 2017 for a spot on the Western Cape Bench that a firm of which he was a director at the time had been implicated in the misappropriation of funds. As a candidate for the Bench, Parker, in the standard application form, was required to say whether there was anything the JSC should be made aware of that could bring the judiciary into disrepute. It appears he did not disclose the shortfall in the trust fund of his legal firm.

In its founding affidavit, the LPC’s Janine Kim Myburgh said the application was being brought as Khan and Parker ‘may have misappropriated funds held in trust on behalf of some of their clients and it is apparent that they have mal-administered trust funds’. While Khan had admitted that there was a shortfall held under Parker & Khan Inc’s control, Parker claimed that he had been unaware of developments with regard to the trust account even while, said the LPC, ‘he is a director’ and ‘as an attorney has a responsibility to ensure that the firm’s trust account is kept in order’. The DM report notes that Irfan Parker did not immediately report the shortfall to the LPC ‘when he apparently got to know about the shortfall’ and instead had agreed to assist Khan ‘to attempt to regularise the shortfall’. Both Khan and Parker, the LPC said in its founding affidavit, could not be trusted ‘to practise as attorneys pending final determination of applications to strike their names from the roll of attorneys’. The DM suggests the implication of Parker in this matter involving his former legal firm as well as his apparent lack of disclosure of this to the JSC during his interview for the Bench is bound to add to the woes of the Western Cape judiciary. Hlophe will oversee the allocation of the case, implicating a fellow judge, to another judge in the division. It is common knowledge in the corridors of the division that Parker and Hlophe have a tempestuous relationship – a claim the DM says has been confirmed by three independent sources.

Full Daily Maverick report