Xodus Gold faces urgent liquidation bid over R2.6m dispute

A member of Xodus Gold has applied for the urgent liquidation of the entity after it refused to pay out his R2.6 million investment.

The application was brought by Pretoria businessman Dian van Zyl, one of several investors Moneyweb has engaged with over the past few weeks, who allege that Xodus Gold declined their withdrawal requests.

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He has now brought the liquidation application to recover his investment, claiming the co-operative is insolvent and unable to pay its debts.

In response, Xodus Gold denies it is insolvent. It labels the application as “scandalous and defamatory,” arguing that the entity remains solvent and that its refusal to repay investors is permitted under the co-operative’s constitution.

A co-operative, like Xodus Gold, operates differently from a company. A key distinction is that a co-operative is a democratically controlled, jointly-owned enterprise governed by the Co-operatives Act. A member’s interest is viewed as a “patronage proportion” of the co-operative’s total pool. Assets belong to the co-operative as a legal entity, with the board managing them on behalf of members. In contrast, a company is governed by the Companies Act, where shareholders own the company through shares.

Xodus Gold

Xodus Gold, which describes itself on its website as a “unique structure to invest in precious metals,” was established in 2002 as a co-operative enabling members to pool investments in Krugerrands. Over time, additional pools were created for silver, platinum and in 2020, the co-operative expanded to include pools for cryptocurrency and legal litigation.

The board suspended all member withdrawals in February 2024 – a measure that remains in place. In February 2025, it consolidated most of the investment pools into a single “Precious Metals and Crypto” super pool, although separate pools for crypto and the Burmilla litigation remain. According to court papers, the super pool is currently valued at R134.4 million, and Xodus Gold has more than 400 members.

Josias van Zyl (unrelated to the liquidation applicant) is the chairman of the board. He is well known for a long history of litigation against the South African government and the president. He is a trustee of the Burmilla Trust, which was one of several parties involved in lawsuits, including a R28 billion claim against the president and the government of South Africa, after losing diamond mining rights when the Katse Dam was built in Lesotho more than 30 years ago.

Willem Pretorius, the founder of Xodus Gold, also serves as a director.

Urgent liquidation application

In his affidavit, Dian van Zyl says he has been a member of Xodus Gold since March 2020, having invested in Krugerrands. In August, he sought to withdraw his investment of R2.6 million, but the request was refused on the basis that “withdrawals are subject to the board’s discretion.”

He states that his decision to bring the liquidation application followed a visit to Xodus Gold’s offices the previous day, where he inspected the co-operative’s financial statements with forensic accountant Johannes Grobler of Premium Forensics. During this visit, they also engaged extensively with director Willem Pretorius.

A central plank of Van Zyl’s case is an accounting concern.

He and Grobler allege that Xodus’s financial statements improperly recorded members’ pooled assets as if they were assets of the co-operative itself, rather than assets held in safekeeping on behalf of members. They argue this misclassification masks the true financial position and supports the case for liquidation.

He further refers to several statements Pretorius allegedly made during the meeting, most of which Pretorius later denied in Xodus Gold’s answering affidavit.

According to Dian van Zyl and Grobler, who deposed of a supporting affidavit, Pretorius said that “many members were frustrated” that pools were closed and withdrawals suspended, “as per discretion of Mr Josias van Zyl, the chairperson.”

Pretorius also allegedly confirmed that Xodus had invested in cryptocurrency XRP “at the sole discretion” of Josias van Zyl, and the illegal Ponzi scheme Mirror Trading International (MTI).

“These investments were not authorised by the constitution and [were] in breach of the fiduciary duties of directors towards the members of the Respondent,” Dian van Zyl claims.

He adds that, despite crypto assets being declared as financial assets, Xodus Gold is not registered with the Financial Sector Conduct Authority (FSCA) as a financial services provider authorised to trade in such assets, rendering trading in crypto assets illegal.

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Dian van Zyl also expresses concern that the board was acting contrary to members’ interests, including by pursuing offshore structures to avoid tax and engaging in unauthorised trading in crypto and possibly other assets. “Mr Pretorius informed us about an offshore trust in Hong Kong, which would assist us in avoiding payment of income tax to Sars [South African Revenue Service]; such action would be illegal.”

He claims Pretorius also referred to an investment in a Brumilla Trust pool, linked to Josias van Zyl’s litigation over lost diamond concessions in Lesotho. Dian van Zyl denied that he was aware of such a pool at the time or that Xodus Gold was authorised to invest in that trust.

He also expressed concern, based on what Pretorius allegedly told him, that Josias van Zyl was in his final year of his chairmanship and wanted to place the co-operative into voluntary liquidation. “I am concerned that he intends to place the respondent in voluntary liquidation, which will allow him to appoint a ‘friendly liquidator’ to the detriment of the members.”

Dian van Zyl argues that Xodus is unable to meet its obligations to him and possibly other members.

He claims Josias van Zyl and the board made unauthorised investments, including funding litigation, which provided no real value to members.

“As such, I have good grounds to believe that the respondent’s directors are not acting in good faith, are not acting in the best interest of the respondent, are not acting in a transparent manner, and are neglecting their fiduciary responsibilities – as such, it would be just and equitable to liquidate the respondent.”

Exodus responds

Pretorius filed a strongly worded answering affidavit on behalf of Xodus Gold, describing the liquidation application as “scandalous and defamatory” and alleging that it was intended to pressure the co-operative into making a payment to which the applicant is not legally entitled. He also denied many of the statements attributed to him in Dian van Zyl’s affidavit, which Van Zyl relied upon as the basis for bringing the application.

He stated that Dian van Zyl and Grobler only had a “quick glance” at the financial statements, but “were more interested in trying to extract information from me concerning the chairman of the respondent’s board than in what is contained in the financial statements.”

Pretorius stresses that Van Zyl is not a creditor but a member of the co-operative. He points to the constitution’s definition of a “patronage proportion,” which calculates each member’s share of the total pool. On this basis, Van Zyl’s R2.6 million investment represents only 1.88% of the total member interest of R134.4 million, and does not entitle him to demand immediate repayment.

Pretorius adds that the co-operative’s constitution strictly regulates withdrawals and may refuse withdrawal requests to protect the co-operative’s financial well-being.

He rejects the claims that the financial statements are misleading, noting that they have been externally audited with clean reports for more than 20 years. Although he did not attach the latest statements to his affidavit, he said they would be made available to the court if required.

Pretorius also denies the assertion that he claimed during the meeting that Josias van Zyl has sole discretion over investment decisions. “The decisions regarding the management of the respondent, including the decision when to liquidate the various pools, rest with the board and are not taken by one person acting alone”.

Pretorius denies that Xodus traded unlawfully in crypto assets, stating that the pool was created before cryptocurrencies were declared a financial asset and trading required an FSCA licence. The board froze this pool in April 2021, and no trading has taken place since. “This pool will be liquidated at a suitable time determined by the board, subject to FSCA approval, the proceeds distributed to members.”

Pretorius also denies Xodus Gold “invested” in MTI, stating that Xodus Gold started a crypto pool in March 2020 at the request of a group of members, and bitcoin was “placed in an account on the MTI platform”.

This bitcoin was withdrawn from the MTI platform a few months later and repaid to the pool’s members.

Pretorius also disputes Dian van Zyl’s version of their discussion at Xodus Gold’s offices regarding possible unlawful structures, such as the Hong Kong Foreign Trust. “During the meeting, the applicant shared details of his personal tax problems, specifically referring to income generated outside the Republic of South Africa. In response, I merely mentioned that he could consider lawful offshore structuring options, such as a Hong Kong Foreign Trust.

“The discussion with the applicant is being misrepresented and distorted in an attempt to cast an unlawful or improper connotation over the matter, which is wholly unfounded and inaccurate, and really has nothing to do with the respondent.”

Pretorius admits that a Burmilla pool exists, valued at R4 million, but says it was created voluntarily by certain members in 2019 and 2020 to support the litigation. He stresses that Dian van Zyl was not invested in this pool and that “his remarks are irrelevant”.

Pretorius also denies stating that Josias van Zyl wants to place Xodus Gold in voluntary liquidation.

“I do not accept that the applicant, advised by a forensic accountant and legal representatives, does not appreciate the difference between the liquidation of an asset and the liquidation (winding up) of a corporate entity.”

He adds that there “is no truth that the respondent or its board is guilty of neglecting their fiduciary responsibilities. The experience and status of the directors of the respondent point in the opposite direction.”

Pretorius further argues that the case is not urgent and was brought prematurely. He contends that Van Zyl had alternative remedies available, such as resigning his membership and claiming repayment under the constitution, or approaching the Co-operatives Tribunal. He insists the co-operative is both solvent and liquid, subject to regular audits, and that there is no evidence of asset dissipation.

Throughout his affidavit, Pretorius denies any claims of misconduct, emphasising that the directors act under the Co-operatives Act and the constitution, and are subject to fiduciary standards and external audits.

He acknowledges that Xodus does not provide financial services and, therefore, FSCA registration is not required.

The urgent application will be heard in the Pretoria High Court on Thursday, 4 September.

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