In a dramatic turn of events, a South African High Court has provisionally liquidated the venture firm 54 Collective, formerly known as Africa Founders Ventures NPC (AFV), following grave allegations of financial misconduct. The allegations were brought forward by the Mastercard Foundation, which had entrusted the firm with a $106.5 million charitable grant aimed at supporting small and medium-sized enterprises (SMEs) across Africa.
According to court documents obtained, the foundation had already disbursed over $42 million to AFV between 2023 and 2024 before raising red flags about the firm’s financial practices and governance.
Court Orders and Asset Freezes
The provisional liquidation order means that an independent liquidator will now assume control of 54 Collective’s operations while the court deliberates on whether to permanently dissolve the company. In addition, the court has frozen more than a dozen bank accounts held at Nedbank, Standard Bank, and Investec, citing concerns over unauthorized and potentially improper fund transfers.
From Philanthropy to Controversy
Founded in December 2022, AFV was established with a mission to fund African SMEs on a non-profit, philanthropic basis. However, the venture’s trajectory took a sharp turn in August 2024, when the Mastercard Foundation discovered that AFV had undergone an unauthorized and expensive rebranding to “54 Collective.”
The foundation became increasingly alarmed that its charitable funds were being diverted to for-profit entities, including Founders Factory Africa (FFA) and a venture capital brand called Utopia—both reportedly operated by the same individuals behind AFV.
In a letter, Daniel Hailu, Executive Director of Impact, Research, and Learning at the Mastercard Foundation, expressed concern over the blurring of lines between charitable and commercial activities, warning that the goodwill and resources intended for public benefit were being redirected toward private gain.
Deloitte Investigation Uncovers Irregularities
After AFV failed to provide complete financial documentation, the foundation appointed Deloitte in December 2024 to conduct a forensic audit. The investigation revealed:
- A $4.59 million transfer from AFV to the for-profit FFA—an action the foundation said it would never have approved.
- Nearly 2,000 adjusting journal entries posted between March 5 and March 20, 2025, which altered grant income balances and created discrepancies with the foundation’s records.
- A failure to produce audited financial statements for 2023 and 2024, with PwC, AFV’s auditor, citing poor financial reporting standards and a lack of internal financial expertise.
Termination and Failed Business Rescue Attempt
On January 30, 2025, the Mastercard Foundation terminated the grant agreement, demanding the return of all unspent funds and a repayment of $689,931.46 for the unauthorized rebranding. Although AFV initially agreed to repay the amount, it later claimed that doing so would constitute reckless trading.
In March 2025, AFV’s board passed a resolution to enter business rescue proceedings, requesting:
- $1.2 million for employee-related costs
- $500,000 for property closures
- $1 million for program payables
- $400,000–$500,000 for business rescue and professional fees
However, the court rejected this move, calling it a legally invalid and evasive strategy to avoid accountability. Acting Judge Johann Gautschi criticized Barry Urban, the appointed Business Rescue Practitioner (BRP), for failing to notify the foundation and attempting to use remaining funds to cover operational and personal fees. The projected recovery to the foundation was a mere $1 million.
In a rare punitive measure, the court ordered Urban to personally pay the foundation’s legal costs, including fees for two senior advocates.
What’s Next?
A final ruling on whether 54 Collective will be permanently liquidated is scheduled for August 11, 2025. The case has sent shockwaves through Africa’s venture and philanthropic sectors, raising serious questions about governance, transparency, and the safeguarding of charitable funds.
