Lyconet South Africa: senior employees set up their own company – the end for Lyconet South Africa (Pty) Ltd.
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On the 21st of June 2024 the final verdict was handed down: Lyconet South Africa (Pty) Ltd is to be liquidated, the verdict confirms the company’s financial insolvency.
But the real drama is playing out behind the scenes – the insolvency and closure are the result of an internal conflict, led by former senior employees Albert Weiglhofer and Wayne Krambeck, who were once the pillars of the company.
Together with Onicaflex (Pty) Ltd, of which Albert Weiglhofer was a director, a petition for the liquidation of Lyconet South Africa was filed in September 2023. This charge was therefore not initiated by regulators, but by the company’s own local management.
What prompted Albert Weiglhofer to take action against his own company?
The answer lies in Project X, a bonus programme personally announced by Hubert Freidl. Project X once again promised enormous financial incentives for those who reached certain career levels such as ‘Vice President’ or ‘President’.
But the reality was different: many of the promised bonuses and commissions were never paid out, leading to a wave of frustration and a rift between the top marketers and the company
With claims amounting to 82 million rand (about 4 million euros) due to both Weiglhofer and Krambeck and their networks, the marketers ultimately had no choice but to take their company to court. Lyconet South Africa had proven financially incapable of paying the bonuses and liabilities from Project X – bankruptcy was obvious.
But the conflict escalated further when in October 2023, Lyconet Austria GmbH, the parent company of Lyconet SA tried to stop the liquidation under the direction of Radovan Vitoshevich, CEO of Lyconet Austria. Vitoshevich used procedural errors in the forwarding of information as an argument to avert immediate liquidation, he managed to have the ruling changed to a provisional liquidation meaning that additional investigations had to be carried out before a final decision could be made.
It quickly became clear that this was a delaying tactic.
In January 2024 the company was back in court, but once again no concrete action was taken because essential documents were missing – a clear indication that Lyconet Austria wanted to continue delaying the liquidation, this was not surprising, as Lyconet South Africa was the main contractual partner for the South African marketers and a closure would have far-reaching consequences.
On the 21st of June 2024 the final decision was finally made: Lyconet South Africa (Pty) Ltd will be liquidated, despite all attempts by Lyconet Austria to prevent the judgment the court had to recognize the insolvency and the company’s inability to meet its financial obligations.
The parent company’s attempt to get out of the affair with formal errors, delaying tactics and statute of limitation strategies failed definitively.
It is still uncertain what the consequences of the demise of Lyconet South Africa will be.
However, it is clear that the liquidation could have far-reaching consequences for thousands of marketers. Many of them had hoped for the promised bonuses and commissions, which were never paid out.
Mistrust in Freidl’s company is increasingly being shaken and the events in South Africa are not an isolated case.
Similar judgements have been made in Norway, which we will report on in detail.
The current situation may be devastating for the marketers involved, but it is important not to despair, there are still opportunities to assert claims and enforce your rights.
If you are affected and have questions or need support to reclaim investments, contact us.
We actively support the rights of victims and are at your side to help you find ways out of this crisis.
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