Claims of dodgy dealings behind threat to deport Swedish investor

Lars Magnusson, one-time investment advisor to President Cyril Ramaphosa, is fighting a deportation order after Home Affairs claimed he was in possession of a fraudulent residence permit.

Multi-millionaire and former Wall Street investment banker Karl ‘Lars’ Magnusson has hauled a string of government officials, including President Cyril Ramaphosa, to court after he and his family were threatened with arrest and deportation on claims they are in possession of fraudulent residence permits and visas.

Swedish-born Magnusson says he is innocent of any wrongdoing.

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Read: Home Affairs blocked from deporting ‘critical skills’ Czech executive

His lawyers say he was the victim of a shakedown by senior government officials, and that there is no other way to explain how he went from persona non grata to presidential advisor in a few short years, and back to persona non grata when the officials had no further use for him.

Like many overseas investors, Magnusson had made several trips to South Africa over the years and liked the look of the place, especially Cape Town. In 2012 he decided to relocate to SA, along with his wife and two daughters.

Listen/read: Location, location, location: Is Cape Town the new Poland?

Once in SA, he launched a number of new business ventures. He invested R25 million into the country and currently employs 45 people, according to papers before the court.

But he had much bigger plans than that, including a smart city which would showcase SA’s technological prowess to the rest of the world. That plan, if implemented, would attract potentially billions in investment and employ thousands.

So what happened that he and his family now find themselves under threat of arrest and deportation?

Magnusson cultivated contacts at the highest level of government and had been raising funds in support of President Cyril Ramaphosa’s campaign to convince the world we are worthy of their investments.

Read: Ramaphosa announces massive infrastructure investment plan G20 presidency: Ramaphosa wants ‘investors to empty their pockets’

He would, one would imagine, easily qualify for permanent residence based on his investment in SA and the businesses he created here.

Diplomacy challenge

New Home Affairs Minister Leon Schreiber may want to wrap his wits around this one if he wants to succeed in his campaign to attract investment and skills to SA.

The Swedish embassy in SA has been alerted by Magnusson’s lawyers to the case – and the risk to EU citizens planning on investing in SA.

Magnusson is fighting to clear his name of any hint of fraud in obtaining his permanent residence permit.

All this is detailed in the court filings, along with correspondence from the Department of Home Affairs (DHA) suggesting it had found no evidence of Magnusson or his family applying for their respective visas and permits. The department concludes that these documents were obtained by fraud.

That would be shocking if true, and a blight on Magnusson’s reputation which he assiduously nurtured over decades as an investment banker operating around the world.

According to DHA deputy director at the time, Rachelle Reyneke, there was no record on the DHA’s visa adjudication system of Magnusson’s application for a business visa, nor for his wife or his business partner Kay Gundersen.

How it started

DHA official Sam Langa – who Moneyweb understands has since left Home Affairs – explains in an affidavit before the court that the DHA received whistleblower information in November 2018 regarding the issue of fraudulent visas to foreign nationals.

Read: DHA visa backlog 80% cleared [Nov 2024]

After a diligent search of the VFS (the company processing visa applications for DHA) database and the department’s own visa adjudication system, no evidence could be found of Magnusson’s application for a visa, nor for his family members or business partner. Some of the visa labels issued in Pretoria were incorrect, and it was concluded that the visas had been obtained fraudulently or illegally.

That’s when the trouble started.

Magnusson was issued permanent residence in 2017 after applying through Granville de Villiers, who “held himself out to be an attorney” but, he later discovered, was not.

The DHA formed the view that Magnusson and his family’s permits were irregular.

Magnusson then switched advisors to Gary Eisenberg of Eisenberg & Associates, who started the process of applying for permission for the family to temporarily depart the country.

On 9 March 2019, the DHA’s Langa arrived at Magnusson’s house claiming to have in his possession a warrant for his arrest and deportation – though no copy of the warrant was shown.

The warrant appears to be based on a hurried statement given via Magnusson through De Villiers to Langa. It was badly written and contained errors that Magnusson was not given time to correct.

‘Leave’ order

Langa told Magnusson he had to sign an “Order to Leave” document and purchase air tickets out of the country, but seemed dismissive of his right to appeal. Langa denies this in his replying affidavit.

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“I got on my knees pleading with Langa to let our daughters say goodbye to their friends and schoolmates, and to the horses and dogs. Langa refused, and explained to me that I was like a prisoner going away to prison,” according to Magnusson’s version.

They managed one more meeting before the planned deportation – this time with Eisenberg, who advised that there were urgent grounds to appeal to the Immigration Inspectorate to delay the deportation.

Eisenberg fired off a letter to Home Affairs, which appeared to grant a 14-day extension but put the wrong year – 2019 instead of 2020.

Langa was back at Magnusson’s door on Saturday 9 March 2019 with what he claimed was an arrest warrant, supposedly issued by Cape Town magistrate Samuel Maku, though Sea Point police said no such arrest warrant had been issued.

An affidavit from Maku says he was approached to issue the warrants, but was involved in other matters. He says the warrants were subsequently issued by another magistrate.

Magnusson initially filed a review application in 2019, but says he was coerced into withdrawing it as a condition for his return to SA, which he did on 13 January 2023 prior to boarding a flight from Doha to SA.

On Friday 6 December 2024 Advocate Simba Chitando, who is representing Magnusson, removed a contempt of court application against the minister of Home Affairs for failing to file an answering affidavit on time.

It’s been more than a year since the case was filed with the court.

Travel troubles

Despite his troubles with the DHA, Magnusson was introduced to then presidential advisor Bejani Chauke in 2019 to assist in bringing foreign investment to the country. He also promised to assist Magnusson with the challenges he was facing with Home Affairs.

Magnusson was about to board a flight from Doha to Joburg on 12 January 2023, but was blocked after he was flagged by the airline’s pre-screening system.

He quickly dashed off a WhatsApp message to Livhuwani Matsila, then secretary of the ANC’s electoral committee: “We were supposed to travel this morning but the airline refused to board as the advanced passenger pre-screening system rejected me. According to DHA, I have been cleared in the system, but they haven’t updated the Interpol that feeds into the Advanced passenger pre-screening system.

“My girls are on their way to SA and will land tomorrow morning. They are in a state of shock. The DG [director-general] of DHA needs to update the Interpol system and remove my travel block to SA.”

Matsila intervened and the block was eventually lifted. Magnusson was able to return to SA and be reunited with his family. But the question of the “fraudulent” permanent residence remained.

Fundraising for the president

“[Presidential advisor Chauke] invited me to assist in fundraising for the President of South Africa in his election campaign and asked me to be a director of the former’s charitable organisation,” reads Magnusson’s supplementary affidavit before the Cape Town High Court.

“I would not have accepted these invitations if I believed that the respondents would maintain the position that I was a prohibited person,” he adds.

“I do not believe that the respondents would have asked for my support if they believed that I acquired my residency in the Republic fraudulently.”

Faced with litigation over the threat of deportation, Home Affairs sent Magnusson a letter on 6 December 2023 saying he had not provided any evidence “that you were a victim of fraud, or an unwilling participant in the acquisition of a fraudulent business visa and a permanent residence permit”.

“This is evidenced by the fact that you failed to provide information to assist with further investigation with regards to the sequence of events which led to your obtaining a fraudulent business visa and thereafter a permanent residence permit.”

No charges

Magnusson replies that he and his wife have never been charged or convicted of the criminal offence of fraudulently acquiring permanent residence.

Therefore, he is constitutionally presumed innocent until convicted after a fair trial.

“I have no obligation to prove that I am innocent of the crime of fraud. Failure to provide the respondents with a sequence of events that led to the respondents issuing me with a permanent residence permit does not in of itself prove fraud.”

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