Former business associate claims Muhammad Karolia is a fraudster with a gambling problem.
Mohammed Ebrahim and vape shop owner Muhammad Karolia were once part of the same large Muslim community scattered across the eastern suburbs of Joburg.
There’s not a lot of love between them now. Ebrahim claims in his court filings that he invested about R40 million with Karolia with the expectation that it would be used to develop padel courts east of Joburg.
That never happened, and Ebrahim wants his money back, fearing it is being used to fund Karolia’s lifestyle.
On Thursday the Johannesburg High Court ordered the South African Reserve Bank (Sarb) to put a freeze on all bank accounts under the control of Karolia, and ordered Absa and FNB to likewise freeze his accounts and provide eight months of bank statements on his accounts so that Ebrahim can see what has happened to his money.
Moneyweb caught up with Karolia, who says he has nothing to hide.
“They can get the bank accounts. They will see that the money is there,” he told us.
Karolia says the sum involved is R26 million, not R40 million. Of this, R20.5 million is sitting in a 60-day Absa call account. The remaining R5.5 million has been paid back over a period of months, he insists, though the court papers tell a different story: an amount of close to R1 million has been repaid after Ebrahim started to threaten legal action.
Neither Karolia nor his lawyer appeared in court to defend the matter.
There doesn’t appear to be any evidence of a written agreement between them, though Karolia told us there is a loan agreement with a repayment date of 2030. This is refuted by Ebrahim’s legal team.
Absa has already put a freeze on Karolia’s account after a precautionary tip-off by the Southern African Fraud Prevention Service.
The Joburg High Court also ordered the Sarb to provide records of any forex transactions made by Karolia over the last eight months. Also now frozen are bank accounts for his vape shop under the name House of Cloud.
Ebrahim’s legal team says he thought he was investing in the booming padel court business, but none of this materialised.
Padel is a kind of hybrid between tennis and squash and has become hugely popular across Joburg and other cities in SA.
Ebrahim’s nearly R40 million investment should have bought him a decent number of these courts, which cost between R800 000 and R1.2 million each.
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Questions
When the padel courts never materialised, Ebrahim started asking questions. What he found disturbed him, as detailed in papers before the court. There are claims that Karolia has a gambling problem, “a reputation of scamming people” and had blown a good chunk of the money paid over to him on things other than padel courts.
Not true, says Karolia, adding that he used to have a gambling problem but had himself voluntarily banned from casinos in 2022. “We used to be so close,” he told Moneyweb. “I just want to pay them back the money and be rid of all this.”
Karolia’s one-time attorney Mohammed Yusuf tells us there was an attempt to settle the dispute within the Muslim community, but agreements there appear to have fallen through.
The matter has now escalated, and quickly, involving several law enforcement agencies.
A fraud complaint has been lodged with the South African Police Service (SAPS), as confirmed by Colonel Naidoo of the Specialised Commercial Crimes Unit. The matter is being investigated by staff at the Boksburg police station, east of Joburg. Fraud allegations against Karolia were also referred this week to the Financial Intelligence Centre.
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Settlement deal falls through
Karolia’s cousin Waseem attempted to mediate the dispute, promising Ebrahim that Karolia, now pleading for mercy, would sell his vehicles and other valuables to scrape together around R750 000 in repayment.
Two days later, on 17 October 2025, Karolia’s then attorneys broached the possibility of an out-of-court settlement where he would pay back R20.5 million sitting in the 60-day Absa account that was now frozen. That deal fell through.
Ebrahim’s lawyers were ready a week ago to enter court in search of an urgent interdict to stop Karolia from transacting on his accounts, believing he might blow whatever was left of their client’s funds. They waited in vain for Karolia’s signed settlement agreement.
On 20 October, Ebrahim opened a criminal case against Karolia.
He states in an affidavit: “They (the police) have not made an arrest, or taken any action against [Karolia] or his associates, to prevent them from continuing to interfere with witnesses, conceal/destroy evidence and resources. This, in my view, makes an interdict an exigent necessity.”
A day later Karolia sent a message to Ebrahim’s brother, a screenshot of which appears in the court papers: “Salaam Bilal. It’s Muhammad here. I wanted to ask you and your entire family for maaf [forgiveness] please from the bottom of my heart I’m asking for forgiveness please. I know I did wrong and I will make sure that every cent is paid back to you and the family. Please have mercy on me.”
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Payments
The same day Karolia paid R100 000 into a family law firm trust account in two payments of R50 000.
“Far less than what was promised on 15 October 2025,” deposes Ebrahim.
“These payments, as with the payments before, prove that [Karolia] is liable to the Ebrahim family for the funds we seek to recover, and that he is still in control of the resources he fraudulently acquired.”
We asked Karolia about the admission of wrongdoing to Ebrahim’s brother. It was, he says, an earnest attempt to rebuild relations with erstwhile friends. What’s not clear from the message is what wrongdoing he was admitting to.
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Second issue
Around the same time, Ebrahim’s brother Uzair had started to investigate Karolia’s financial dealings and returned from Durban with grim news, claiming Karolia had manipulated a mechanic’s invoice to divert funds into his own account – a clear case of fraud, says Ebrahim.
Karolia has a different take on this.
He was asked by Ebrahim if he knew a mechanic who could do body work on a high-end Audi that had been in a crash. He obtained a quote for about R660 000 with a profit margin on top for himself.
Yet annexures to the court papers show texts from a mechanic: “This looks like a quote I did for a gentleman that called himself MK [Karolia]. I did it in January this year. Never heard anything from him again after the quote.”
Ebrahim claims Karolia had been pressuring witnesses not to bring his crimes to the attention of authorities and the court.
The National Prosecuting Authority was informed of this and replied that his lawyers should advise him not to interfere in criminal proceedings. Karolia refutes this.
“I would like to inform the court that news of this litigation has done the rounds in our community,” deposes Ebrahim. “[Karolia] has allegedly defrauded many more people in our community than just my family … We genuinely fear that he may abscond with our money.”
This article was republished from Moneyweb. Read the original here.
