Friday, January 23, 2015


No fear No Favour No Corrupt Cops please........

Former National Police Commissioner Jackie Selebi. Picture: EWN
Former police commissioner Jackie Selebi has died after battling with a long illness.

CAPE TOWN - Eyewitness News has learnt that former National Police Commisioner Jackie Selebi has died in hospital in Pretoria this morning.

He was 64 years old.

Selebi was being treated at the Netcare Jacaranda Hospital.

Former top cop Jackie Selebi died at the Netcare Jacaranda Hospital in Pretoria. Picture: Christa Eybers/EWN

His friend, Schabir Shaik, says he heard the news this morning.

“I believe he’s been in an induced coma for some time now for about two and a half weeks. He finally passed on between late last night and early this morning I believe.”

Shaik says he was a good man.

“He was a good man. I have good memories when I worked with him at Shell House in the early 90s. I recall him to be a good comrade.”

Selebi was said to be suffering from end-stage kidney disease brought on by his diabetes.

He was sentenced to 15 years in 2010 for taking bribes from convicted drug dealer Glen Agliotti.

He was released on medical parole in July 2012, with the medical parole board saying he was suffering from irreversible kidney failure, a stroke, diabetes, heart and eye disease, and motor function impairment.



 Self-confessed Brett Kebble murderer Mikey Schultz. Picture: Sapa.
The director of '204: Getting Away with Murder' said they wanted the film to be as real as possible.

JOHANNESBURG -204: Getting Away with Murder, a docu-drama that seeks to expose the truth behind the killing of mining magnate Brett Kebble, stars the self-confessed murderers of the slain businessman and is due to premiere on 24 October. 
The film seems to follow a similar film style employed in the Indonesian documentary The Act of Killing, where the perpetrators of mass killings in the country recounted and re-enacted some of the killings for the cameras.
Admitted killers Mikey Schultz, Nigel McGurk and Faizel “Kappie” Smith have re-enacted the controversial murder for the upcoming film.

The film’s director Warren Batchelor said: “This has never been done before. No one has been offered full immunity for a crime like this.”
Batchelor also said they wanted the film to be as real as possible and that by getting actors to play out the scenes, it would have been ‘run of the mill’.
The film’s title refers to the indemnity the trio received in terms of Section 204 of the Criminal Procedures Act.
The documentary features among others, Kebble’s brother Guy and father Roger, Jackie Selebi, convicted drug dealer Glenn Agliotti, advocate Vusi Pikoli and investigator Piet Byleveld.
Batchelor told The Star, he knows he will be questioned about the ethics of re-enacting a murder scene, but said he sees nothing wrong with showing people what happened, particularly if it allows the public to really question why section 204 notices were given out.
 Kebble was shot dead near a bridge over the M1 in Melrose Johannesburg on 27 September, 2005 while driving to a dinner engagement with his business associate, Sello Rasethaba.


The Piet Byleveld promotion!!
The rogue cop who became head of INTERPOL?
It was Jackie Selebi who promoted Piet Byleveld to Director to try and keep his sorry arse out of PRISON.
Will Piet Byleveld be able to keep him out of the coffin?

Wednesday, January 21, 2015

Concern over rate of police firearm theft

The DA says it will continue to ask questions about the loss or theft of hundreds of police firearms.
31 thousand knives and more than 3000 guns are being destroyed by police in Vereeniging on 5 February 2013. Picture: Govan Whittles/EWN.
FILE: Concerns are being raised this afternoon about the number of firearms being stolen from police stations. Picture: Govan Whittles/EWN.

Alex Eliseev | about an hour ago

JOHANNESBURG - Concerns are being raised this afternoon about the number of firearms being stolen from police stations following the arrest of a senior Gauteng officer.

Eyewitness News this morning revealed that Colonel Chris Prinsloo, who has served 35 years in the South African Police Service, was arrested in connection with the discovery of 750 rounds of ammunition at his house.

The arrest is part of a wider investigation that has been running for over a year and is being conducted by a Western Cape task team.

National police commissioner Riah Phiyega said the high-level arrest of Prinsloo shows the effectiveness of Crime Intelligence.

She said Prinsloo’s arrest is a great disappointment.

“That type of skill takes many years to build and surely to reach that level, the person should also have had passion.”

The Democratic Alliance (DA) says it will continue to ask questions in Parliament about the loss or theft of hundreds of police firearms.

The party also wants more clarity on the role police officers play in the flow of weapons to the criminal underworld.

Prinsloo is due to appear in court in March.

He appeared in court earlier this week, was released on R5,000 bail and now faces suspension while his trial runs its course.

The police’s Solomon Makgale says the arrest relates strictly to the ammunition found at the colonel’s house.

Prinsloo was renowned for his knowledge of firearm laws.

Last week, over 9,000 confiscated weapons were destroyed in Vereeniging with Phiyega and senior police leadership overseeing the process.

(Edited by Gadeeja Abbas)

Tuesday, January 20, 2015

Ex-Sharemax investors should ask: What is this all about?


Author: Ryk van Niekerk|

Ex-Sharemax investors should ask: What is this all about?

Is there more at play than a fight between Moneyweb and Nova?

Investors in the historic Sharemax investment scheme may want to find out for themselves who owns the companies that own and manage the original Sharemax properties.

Moneyweb’s efforts over the past 16 months to get clarity on the ownership structures were delayed again when the North Gauteng High Court (NGHC) granted Nova Properties, Frontier Asset Management & Investments and Centro Property Group leave to appeal a recent interlocutory ruling at the end of November.

This means that before our main case for access to the share registers can be heard, we first have to argue a technical point at the Supreme Court of Appeal (SCA) in Bloemfontein.

Only when this point is decided, sometime next year, will Moneyweb be able to continue with the main case for access in the NGHC. This could mean another 18-month delay.

The process started back in July 2013 when Moneyweb journalist Julius Cobbett applied to access the shareholder registers of these companies in terms of Section 26(2) of the Companies Act. This provision in the Act, in theory at least, is aimed at making it easy for any member of the public to inspect the shareholder register of any company.

Access denied

The three companies vociferously denied Cobbett and Moneyweb access. The directors of the companies justified their refusal by stating that Moneyweb and Cobbett were waging a vendetta against the directors and entities and that Moneyweb and Cobbett would use the information in the shareholder registers to further defame and vilify the parties, particularly the directors.

Moneyweb has always denied that such a vendetta exists.

What is this case all about?

This may be an opportune time for investors to take a step back and ask: What is this case all about? Is it about Moneyweb desperately trying to get its hands on the shareholder registers of the companies and then to sensationally report on their contents? Or are the directors fighting to keep the registers secret from everyone, including investors?

Is this case merely a clash between Moneyweb and individual directors of Nova or is there something else at play?

Why are the ownership structures important?

Moneyweb believes it is critical that the shareholder structure of these companies is made public, as this information is key to investors’ interests.

Nova is the company that owns all the various properties that used to belong to Sharemax investors. With the announcement of the scheme of arrangement in 2011, the executive directors of the erstwhile Sharemax group, Dominique Haese, Rudi Badenhorst and Dirk Koekemoer held 43.2% of Nova's issued shares.

Moneyweb wants to see whether this shareholding has changed since 2011 and who owns the balance of the issued shares. Moneyweb also wants to know what Haese, Badenhorst and Koekemoer paid for their shares to acquire such a large slice of a company with assets exceeding R2 billion.

The ownership structure of Frontier and Centro is also important. Frontier provides a range of administrative services to Nova and Centro manages the property portfolio on behalf of Nova.

Walk through the front door

The ironic reality is that although Moneyweb may wait three years to get a final answer from the courts, an investor may access the shareholder registers on any weekday morning.

Investors can do this through the Companies Act. According to Section 26 (1) of the Act any “person who holds or has a beneficial interest in any securities issued by a profit company” may inspect the securities register. This obviously refers to investors.

Section 26(2) is applicable when a person does not have such a “beneficial interest”, such as Moneyweb and any other non-investor. In this case the person has the right to gain access if he or she pays a prescribed fee, currently set at R100.

The Act allows for two ways to access the security registers. The first is for access at the company’s registered address. In theory, anyone can walk through the company’s front door, approach reception and ask to see the particular document.

The second way is to complete the particular form - the company then has 14 days to make the shareholder register available to the applicant. It was this method that Cobbett used.

The Act also clearly states that access cannot be denied, and that if any reasonable request is denied, it constitutes an offence.

For ease of reference, here are the registered addresses of the three companies:

Nova Property: 105 Club Avenue, Waterkloof Heights, Pretoria. (It is the same building as the old Sharemax head office)

Frontier Asset Management: 341, 24th Avenue, Villiera, Pretoria; and

Centro Property: Shop 10, Waterkloof Shopping Centre, corner Garsfontein Road and January Masilela Drive, Waterkloof Glen, Pretoria.

I believe it is critical that the information as to who constitutes the majority shareholders is placed in the public domain. This is the reason why Moneyweb has spent a significant amount of money in legal fees to access these shareholder registers. But we will only be able to publish the shareholder registers when the protracted legal wrangle is over - and this may take a few more years.

But curious investors have unique rights, and they cannot be accused, as we are, of waging a vendetta. I am sure several shareholders would want to take a peek at the shareholder registers to see what the fuss is all about.
Moneyweb News
Special Investigations

Author: Ryk van Niekerk|

Absa, Grindrod Bank reject funding to Nova

Board blames negative media reports and Sarb for failure to secure finance.

Continued negative media reporting about the Nova Property Group has caused Absa and Grindrod Bank to withdraw funding lines to the group, the Nova board said in a recent communiqué to debentures and shareholders of its various investment schemes.

In the communiqué the Nova board does not pull any punches and blames the media for creating a perception of “reputational risk” which led the banks not to extend funding to the group.

The board also lashed out at the South African Reserve Bank (Sarb) for not supporting the Nova Group when Grindrod Bank approached it with concerns that its reputation may suffer if it did business with the Nova Group.

The Nova board did not elaborate on the potential impact Absa and Grindrod’s decision would have on the group. Nova did state that the funding from Absa would have been used to upgrade unnamed shopping centres. Nova also does not state whether it has received funding from other sources.


This attack on the media follows a similar notion by Connie Myburgh (pictured), Chairman of the Nova Group, during the group’s annual general meeting in November last year.

The Nova Group was established through the restructuring of the Sharemax property scheme. Nova is controlled by four directors, two of whom: Dominique Haese and Dirk Koekemoer, played important roles in the promotion of Sharemax investment products.

The scheme was recently placed under the spotlight when the Financial Advisory and Intermediary Services ombud Noluntu Bam stated that Sharemax was nothing more than a Ponzi scheme and that its directors should also be held liable for investors’ losses.

The directors are appealing this determination.

Grindrod Bank

In the recent quarterly update, the Nova board revealed that Grindrod Bank withdrew a possible funding line, following the publication of alleged “inaccurate” and “misleading” media reports.

The board said discussions between Nova and Grindrod had been at an advanced stage when the bank withdrew from the process last month. “The sole reason advanced by Grindrod for not perusing a business relationship with the Nova Group, was the possibility that Grindrod might suffer so-called ‘reputational risk’, should Grindrod lend funds to the Nova Group,” the communiqué reads.

The board added that Grindrod Bank approached Sarb in this regard, but that the Reserve Bank did not allay these fears.

Grindrod Bank declined to comment on these allegations. A spokesperson said it is the bank’s policy not to reveal reasons for credit application refusals or to comment on said refusals to third parties.


According to the Nova board, Absa also declined to extend further funding to Nova due to negative media reports. The board was “surprised” when it was informed about the bank’s decision.

In the communiqué, Nova alleges that Absa sent the following correspondence to Nova: “I regret to inform you that after much deliberation and consultation with our Head Office it was decided that Absa cannot proceed with entertaining any further transactions linked to the Nova Group. Today again, there was media reporting around this which does not pose well.”

It is not clear who sent this correspondence on behalf of Absa and to what media reports it referred to.

The Nova Board also said it has subsequently terminated its business relationship with Absa and that it settled its previous loan before the due date.

Absa did not want to respond to the allegations. An Absa spokesperson did however state that Absa couldn’t comment on the allegations due to client confidentiality.

“In so far as public statements have been made in respect of Absa's relationship with the particular client, Absa reserves the right to answer in the appropriate forum and at the appropriate time.

“Generally speaking, in making decisions of this nature Absa will consider a number of factors such as quality of existing property portfolio, lease expiry profile, group cash flow, group structure and the manner in which investors receive funds post sale of properties."

Reserve Bank

It is also clear that the Nova board is not impressed with Sarb’s failure to dispel the notion that Grindrod would suffer “reputational risk” if it conducted business with Nova.

The board said Sarb played an intimate and active role in the restructuring of the Sharemax syndications in 2010 and the subsequent creation of the Nova Group, and that one of the purposes of the new structure was to remove the historical negative perceptions of the old Sharemax structure. “…When asked for clarification as to the continued existence of ‘reputational risk’, the Sarb unfortunately appears to be unable to assist, notwithstanding the aforesaid role of Sarb in the restructuring proves and the creation of the Nova Group,” the communiqué reads.

The board went on to say:

“This is indeed an extremely sad state of affairs, when members of the Banking Fraternity and its regulator, the SARB, are unwilling to assist the Nova Group in acting in the best interests of the very “Pensioners” who’s plight the Media continues to lament, under circumstances where it is the SARB, who imposed the Directives on the historical so-called “Sharemax Group” (some 3 years ago), whilst, afterwards, actively assisted in terminating the existence of such historical “Sharemax Group”, and withdrawing the Directives, as a consequence, on 8 February 2012, so as to remove any impediment on and in regard to the historical business of the restructured “Sharemax Group”, constituting, to the best benefit of Shareholders and Debenture Holders, the new Nova Group.”

Sarb did not respond at the time of publication.



Auditors should have known about Sharemax irregularity – Ombud

Special investigations

Author: Julius Cobbett|

Irregularity reported too late to protect investors.

JOHANNESBURG – Auditors for Sharemax should have known an irregularity was taking place. This is one of the findings in the latest determination by the Ombud for Financial Services Providers (Fais Ombud) Noluntu Bam against a financial adviser who sold Sharemax products.

The determination orders the adviser, as well as four Sharemax directors, to repay a 73 year-old pensioner the R490 000 she invested in Zambezi Retail Park, Sharemax’s second-largest syndication. This is the second determination that has found Sharemax’s directors liable for an investor’s loss. The directors are: Dominique Haese, Gert Goosen, Willie Botha and Andre Brand.

Bam’s determination, dated May 16, takes particular aim at auditing firm, ACT Audit Solutions. This firm has since changed its name and is now known as Advoca Auditing.

Bam states that the auditors failed to report an irregularity timeously to the regulatory body, the Independent Regulatory Board for Auditors (IRBA).

The irregularity in question was the release of investors’ money out of an attorney’s trust account before they had taken transfer of their property. This happened in Sharemax’s two largest syndications, Zambezi and The Villa, and left them in a very precarious position.

Prospectuses for Zambezi and The Villa stated that investors’ funds would remain in the attorney’s trust account until immovable properties were transferred.

ACT Solutions did alert IRBA to this irregularity. But it did so on November 5, 2010. By then Sharemax’s troubles were well known. The irregularity reported served little purpose in protecting investors.

By the time ACT reported the irregularity, Zambezi and the Villa had already raised R2.3bn from investors. The first Zambezi prospectus had been registered three years earlier, on November 15, 2007.

In her determination, Bam notes that her office sent ACT Audit Solutions a letter which asked a number of important questions. An extract of this letter, together with ACT’s lawyer’s response, can be read in the determination.

Bam says it is of concern to her office that ACT does not state when the irregularity was discovered. Nor does it give detail as to the circumstances that led to the discovery.

“The auditors must have known that the investors’ funds were being used to fund the building of the mall and that interest payments, of 12%, to the investors also came from their own funds,” writes Bam.

She concludes: “The auditors, ACT now known as Advoca, failed to report the irregular transaction to IRBA timeously. They ought to have known that investors’ funds were being paid before transfer had taken place. At all times they had access to that information. Also, they ought to have known that this money was ultimately lent to developers who borrowed the money and used the same funds to pay 14% interest back to Sharemax.”

Asked by Moneyweb to comment, Advoca managing director Jacques van der Merwe says: “In response to the determination made by the FAIS Ombud we are satisfied that we answered their enquiries directed to us sufficiently. We did not receive any further enquiries from them after our detailed response on any issues now raised in the determination. We are therefore not going to deal with the issue in the electronic media.”

This is not the only controversy faced by ACT. Moneyweb has previously reported on how the firm changed its mind on a clean audit it gave Sharemax-promoted Flora Centre. ACT only changed its mind after it was notified by IRBA that a complaint had been laid against it relating to the Flora Centre financial statements. For a detailed analysis of these financial statements, see Inside Sharemax’s “magic”.

Copy and paste mistake

Once ACT reported its irregularity to IRBA, Sharemax was invited to respond. Says ACT: “Sharemax’s response was that no reportable irregularity took place as the prospectuses contained a common mistake (the provision that funds could only be transferred after registration of transfer of the property to the property investment companies) which recurred as a result of a bona fide “copy and paste” mistake during drafting of the prospectuses. Sharemax argued that the prospectuses should be rectified.”

Bam says it appears that Sharemax is claiming that there was a mere ‘copy and paste’ error in the prospectus. “This is disingenuous and against the probabilities,” says Bam. “This is a material term of the contract between Sharemax and the investors. Most investors would not have participated if their funds did not enjoy the protection of an attorney’s trust account. This simply cannot be swept under the carpet as a ‘copy and paste’ error. Equally it is far too late to even consider a rectification of the prospectus, large numbers of investors already parted with their funds.”

Bam continues: “The information received by this office is that [Sharemax] representatives specifically told investors that their money will remain in the attorney’s trust account and will only be paid out upon registration of the transfer of the property. The investors were told to pay their money only to and directly into the attorney’s trust account. There the money will be safe.”

Bam also notes that her office is in possession of promotional pamphlets produced and distributed by Sharemax. The pamphlets state: “Investment funds are paid into the trust account of Weavind & Weavind attorneys (established in 1905), which falls under the protection and insurance of the Law Society of South Africa, until the property is ready for transfer into the investors’ names.”

Says Bam: “This statement is consistent with the representations made in the prospectus and its purpose is to assure investors that their funds enjoyed protection. On [Sharemax and its directors’] own version they knew, at the time of producing this pamphlet, that they were wilfully and deliberately misleading members of the public as they equally knew that this protection offered in the prospectus and in this pamphlet was merely a ‘cut and paste error’ and that the prospectus was subject to rectification. The pamphlet was distributed in 2010.”

Furthermore, Bam says that after every investment was made, each investor received a letter from Sharemax. The letter states: “…your investment is deposited into Weavind & Weavind’s trust account, and is kept there until the investment amount is processed and the property is transferred. After this your shares are issued to you as described in the prospectus.”

Bam says these letters were still being written to investors after the “mistake” was discovered.

“The only reasonable conclusion to be drawn from this conduct is that the second to seventh respondents were involved in a scheme calculated to defraud members of the public.”


R147bn lost through money illegally leaving SA

R147bn lost through money illegally leaving SOUTH AFRICA !

Sarah Evans

South Africa is losing roughly R147-billion a year to the illegal movement of money out of the country.
The money moved out of the country frequently funds corruption or organised crime, according to the GFI. (Oupa Nkosi, M&G)

South Africa is losing roughly R147-billion per year to the illegal movement of money out of the country.

This is according to a report by international monitoring organisation, Global Financial Integrity (GFI), which released a new report on illegal capital flight this week. The report tracks illegal outflows from 2003 to 2012.

To put this figure in perspective, Higher Education Minister Blade Nzimande told Parliament in 2012 that R147-billion could accommodate all university students at all universities in the country.

This form of illegal capital flight, or, in economics terms, illicit financial flows, involves the movement of money out of the country in which it is generated, robbing countries of the economic benefits of money generated.

Companies or organised crime groups do this to purposefully hide profits generated or money illegally earned from their record books.

The money moved out of the country frequently funds corruption or organised crime, according to the GFI.

Illicit financial outflows
Out of 151 countries, South Africa loses, on average, the 12th highest amount of money through illicit financial outflows. In 2012 alone, South Africa ranked 9th, losing $29.13-billion.

“Illicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” GFI president Raymond Baker said this week. Outflows in 2012 were the highest on record.

According to the Thabo Mbeki Foundation, this practice in Africa dates back to the 1960s. Many multinational corporations, insecure about the political future of their host countries after decolonisation, sought mechanisms to move their profits offshore.

One way in which money is moved is euphemistically called “tax planning” or the movement of profits to tax havens around the world via the establishment of fake operations in offshore tax secrecy jurisdictions, to hide taxes owed to host countries and increase profits.

The practice has become so common that at least one auditing firm released a tip sheet to its clients, mostly multinational corporations, to advise them on how to avoid paying taxes without alerting tax authorities.

Developing countries lost $991.2-billion in illicit outflows in 2012. And in total, from 2003 to 2012, these countries lost $6.6-trillion.

“This is a trillion dollars that could have contributed to inclusive economic growth, legitimate private sector job creation and sound public budgets,” according to report co-author Joseph Spanjers.

Sub-Saharan Africa had the biggest amount of illegal financial outflows as a share of Gross Domestic Product (GDP) at 5.5%.

Over the past 10 years, illicit outflows have grown 13.2% per year in sub-Saharan Africa.

Deliberate misreporting
Another form of illicit financial outflows involves trade misinvoicing or the deliberate misreporting of the value of commercial transactions on invoices submitted to customs to illegally move money across borders. It is the biggest contributor to illicit flows from developing countries, according to the GFI. This kind of capital flight was responsible for 77.8% of all illegal flows in the developing world over the period studies by the GFI.

But the actual amount of capital that the developing world – and South Africa – loses each year thanks to illegal money flows could be much higher. The GFI says its estimates are “highly conservative” as the institute does not add into its calculations the movements of bulk cash, services mispricing or other types of money laundering.

“This means that many forms of abusive tax avoidance by multinational companies, as well as the proceeds of drug trafficking, human smuggling and other criminal activities, which are often settled in cash, are not included in these estimates,” according to Dr David Kar, a senior economist at the GFI and the main author of the study.

Kar said the rate at which countries are losing money thanks to this kind of capital flight was “extremely troubling”.

“These outflows are growing the fastest and taking the largest toll as a share of GDP on some of the poorest regions in the world. These findings underscore the urgency with which policymakers should address illicit financial flows,” Kar said.

To combat this, the GFI says regulators and law enforcement authorities must ensure that all of the anti-money laundering regulations are strongly enforced.

And policymakers must require multinational companies to “publicly disclose their revenues, profits, losses, sales, taxes paid, subsidiaries and staff levels on a country-by-country basis”.

“All countries should actively participate in the worldwide movement towards the automatic exchange of tax information. Trade transactions involving tax haven jurisdictions should be treated with the highest level of scrutiny by customs, tax, and law enforcement officials,” the GFI said.

Sarah Evans is a Mail & Guardian news reporter.


Sars applies to liquidate Sharemax

By Roy Cokayne

The South African Revenue Service (Sars) has applied to the North Gauteng High Court to liquidate Sharemax Investments, the property syndication promotion and marketing firm that collapsed in 2010 and was deemed a Ponzi scheme by the ombud for financial advisory and intermediary services (Fais).

Sars is also applying for Sharemax’s business rescue proceedings, which were launched in November 2011, to be set aside and terminated because of non-compliance with the Companies Act. The application has been prompted by the alleged inability of Sharemax to pay Sars R15.7 million in outstanding taxes.

The application, among other things, reveals that a business rescue plan has to date not yet been published for Sharemax Investments, despite a business rescue practitioner being appointed to Sharemax on December 7, 2011.


The Companies Act requires a business rescue plan to be published by the company within 25 business days of the business rescue practitioner being appointed, or any longer time allowed by the court or the holders of a majority of the creditors’ voting interest.

About 33 000 investors invested about R4.5 billion in Sharemax’s various schemes.

Sharemax’s collapse in 2010 was precipitated when a finding that its funding model contravened the Banks Act became public knowledge after an investigation by the registrar of banks at the Reserve Bank.

This led to new investments drying up and it being unable to make monthly payments to investors.

The registrar of banks placed Sharemax under statutory management in September 2010 and appointed two statutory managers with a mandate to manage the repayment of investors’ funds or seek other legal alternatives.

In January 2012 the North Gauteng High Court sanctioned a scheme of arrangement and offer of compromise to shareholders.

The registrar of banks laid criminal charges against Sharemax for alleged contraventions of the Banks Act in March 2012.

In its application, Sars cites Sharemax and six other respondents, including Liebenberg van der Merwe, Sharemax’s appointed business rescue practitioner; the Companies and Intellectual Property Commission; former Sharemax managing director and creditor Willie Botha; former Sharemax director and creditor Andre Brand; former Sharemax director Dominique Haese, who is now managing director of the Nova Property Group and Frontier Asset Management, which took over and manages Sharemax’s property portfolio in terms of a high court-approved restructuring of Sharemax; and Nova Property Group chairman Connie Myburgh.

Elle-Sarah Rossato, a Sars official, said in an affidavit filed in support of the application that Van der Merwe confirmed in September last year that Sharemax was unable to pay the debt owing to Sars because of an unforeseen development.

This was the determination delivered by the Fais ombud between Gerbrecht Siegrist and various Sharemax group companies, including Sharemax Investments, in terms of which all of these companies were held jointly and severally liable for the payment of R580 000 to Siegrist.


Rossato said Myburgh had indicated that about 500 further complaints had been lodged with the Fais ombud as a result of this ruling, and until the appeal against this had been determined, the debts owed to Sars could not be paid.

She said Van Merwe claimed in October last year that a business rescue plan for Sharemax could not be finalised until the Sars claim was finally quantified and finality was achieved on the complaints adjudicated by the Fais ombud.

Rossato said the quantification of Sars’s claim was “disingenuous and incorrect” because the correctness of the tax debt was confirmed at a meeting in September last year.

Van der Merwe’s assertion that the business rescue plan could not be finalised until finality was achieved regarding the Siegrist determination was “equally disingenuous”.

Rossato said Van der Merwe was appointed Sharemax’s business rescue practitioner on December 7, 2011, and the Siegrist determination was only handed down on January 29 last year.

To date, no business rescue plan for Sharemax Investments had been published, she said.

Rossato said Sharemax and Botha, Brand, Haese and Myburgh were aware that Sharemax did not have any assets to pay its creditors but “they disingenuously abuse the Siegrist determination”.

Rossato claimed Sharemax’s business rescue proceedings terminated after the expiry of the 25-day period from Van der Merwe’s appointment when he failed to publish a business rescue plan. She said Van der Merwe had claimed in October last year that consent had been obtained for an extension from Botha and Brand.

In a response to Sars’s application filed this week, Sharemax Investments said the failure by Sars to cite and join Siegrist as a respondent made its application defective because Siegrist’s rights as a creditor would be prejudiced if its application was successful.

A date has not yet been set for the application to be heard.


Sharemax hints at Sars tax settlement

By Roy Cokayne

SHAREMAX Investments, the property syndication promotion and marketing firm that collapsed in 2010, claims it has reached agreement with the SA Revenue Services on the “essential terms” of a settlement of its alleged tax liability.

However, a written settlement agreement had not yet been concluded with Sars, Sharemax said in a statement issued on its behalf by attorneys Faber Goerts Ellis Austin last week.

Adrian Lackay, a Sars spokesman, said it would be premature to comment at this stage on Sharemax’s statement, adding the liquidation application was still to be heard.

“At issue is a consolidated amount for outstanding taxes of around R17 million. Unless payment of the taxes due is made or the matter resolved between the parties, the application will proceed,” he said.

Sharemax claimed in the statement the negotiations were at an advanced sensitive stage and the terms of the settlement agreement reached with Sars were “confidential and cannot be disclosed”.

It claimed that once a final written settlement agreement had been concluded with Sars and implemented in accordance with “the terms that have already been agreed”, the high court application brought against Sharemax by Sars would be withdrawn by Sars “and that will be the end of the matter”.

Sharemax stressed it had sufficient means to pay any tax liability it may have and believed the high court application brought by Sars was “ill conceived and nothing more than an attempt to coerce Sharemax to yield to Sars’ premature demands”.

However, Sars’ court action also included an application for Sharemax’s business rescue proceedings, which were launched in November 2011, to be set aside and terminated because of non-compliance with the Companies Act.

Sars’ application revealed that a business rescue plan had to date not yet been published for Sharemax Investments, despite a business rescue practitioner being appointed to Sharemax on December 7, 2011.

The Companies Act requires a business rescue plan to be published by the company within 25 business days of the business rescue practitioner being appointed, or any longer time allowed by the court or the holders of a majority of the creditors’ voting interest.

In its application, Sars cited Sharemax and six other respondents, including Liebenberg van der Merwe, Sharemax’s appointed business rescue practitioner; former Sharemax managing director and creditor Willie Botha; former Sharemax director and creditor Andre Brand; former Sharemax director Dominique Haese, who is now managing director of the Nova Property Group and Frontier Asset Management, which took over and manages Sharemax’s property portfolio; and Nova Property Group chairman Connie Myburgh.

In a determination issued last year, the ombud for financial advisory and intermediary services deemed the Zambezi Retail Park property syndication scheme promoted and marketed by Sharemax a Ponzi scheme.

About 33 000 investors invested about R4.5 billion in Sharemax’s various schemes.

Sharemax’s collapse in 2010 was precipitated by the finding of a registrar of banks investigation, that Sharemax’s funding model contravened the Banks Act, becoming public knowledge. This led to new investments drying up and it being unable to make monthly payments to investors.

The registrar of banks placed Sharemax under statutory management in September 2010 and appointed statutory managers to manage the repayment of investor’ funds or seek other legal alternatives.

In January 2012 the North Gauteng High Court sanctioned a scheme of arrangement and offer of compromise to shareholders. The registrar of banks laid criminal charges against Sharemax for alleged contraventions of the Banks Act in March 2012.


Sharemax hopes for compromise from court
March 29 2011 at 06:00am
By Roy Cokayne


The planned application by the new board of the Sharemax group of companies to seek permission from the High Court for an offer of compromise in terms of the Companies Act to creditors in schemes promoted and marketed by the company has hit a potential snag.

Chase International managing director Pierre Hough, a business strategist who conducts specialist forensic investigations, claims the planned offer of compromise is seeking to legalise an illegal act and prejudicial to the rights of “prospective investors”.

Hough said there were no investors or shareholders in either the Zambezi Retail Park or The Villa schemes because a condition that had to be met for the scheme to become effective had not been fulfilled.

This condition was the transfer of the properties into the syndication vehicle mentioned in the prospectus for both these schemes, he said.

Hough stressed both the Zambezi Retail Park and The Villa schemes had failed and, in terms of the government notice on property syndications, the money deposited by prospective investors into the trust account of Sharemax attorneys Weavind & Weavind must be repaid.

“In terms of the government notice, the money deposited can only be dealt with in one way. It must be repaid to the applicants. The issue of share certificates to prospective investors is highly irregular and possibly fraud.

“Prospective investors in Zambezi Retail Park and The Villa must not be duped into believing they are shareholders and debenture holders. They are merely prospective investors,” he said.

An investigation by the Reserve Bank found that Sharemax’s funding model contravened the Banks Act.

“You can’t take an illegal scheme and through a compromise arrangement move people from A to B. You must inform people correctly,” he added.

Dawie Roodt, the chairman of the Efficient Group and a director and spokesman for the new board of the Sharemax group of companies, said he was not in a position to comment on claims that there were no shareholders in Zambezi Retail Park or The Villa. He said he did not understand all the legalities around such claims.

But he said there was a lot of freedom around an offer of compromise provided the court was satisfied the alternative was worse for all concerned.

A statement issued by the Sharemax board last month stated the schemes of arrangement related to an offer of compromise were being structured “with the view to eliminating all and any contraventions of the Banks Act”.

It said this was to make it possible for the directives issued by the Reserve Bank against all Sharemax companies, and the appointment of statutory managers, to be withdrawn once the High Court had sanctioned the schemes of arrangement.

Roodt confirmed the planned offer of compromise would probably involve four Sharemax schemes, Zambezi Retail Park, The Villa and Sharemax’s income and growth plans.

He said the new board had made progress and on behalf of investors had taken over all the claims of former Sharemax chief executive Willie Botha and chairman André Brand and “with a bit of luck” would be able to launch the High Court application soon. - Business Report


Sharemax fails to settle with Capicol
09 March 2011

Sharemax board unable to pay R64m, Capicol to seek legal action.

The arbitration award made at the end of 2010 concluded that Sharemax owes Capicol R64 million, excluding damages, which was due for payment by no later than 7 March 2011. The Sharemax board conceded, prior to the payment date mentioned, that they are unable to pay said amount. Capicol then made yet another offer to them for consideration by the investors. This offer once again provided for repayment of the full syndicated amount paid out monthly over 10 years to the investors to assist them as these payments represent the sole livelihood of many of these investors.

The newly appointed Sharemax board has inexplicably rejected this offer whilst the 7th March has come and gone with no payment forthcoming in accordance with the arbitration award. This comes after Capicol made an offer to the Sharemax board in September 2010, which was signed by a duly authorized director of said board and it also entailed repayment of the full syndicated amount (invested capital) to the investors; however the board failed to even present this offer to the investors for approval.

Capicol has made all reasonable attempts to ensure that the investors are protected in this dispute; however, due to the Sharemax Board's most recent decision Capicol has no choice but to proceed with an urgent application for cancellation of the subsequent bond as the agreement has now cancelled. This will be done in order to ensure proper protection of the collective interest of Capicol, Zambezi Mall, its' tenants, contractors and employees.

Capicol is disappointed with this result, but will now pursue the necessary legal remedies available to it.

( Realestateweb )


New plan punted to save Sharemax
By: Vic de Klerk

2011-03-23 07:02
A MARVELLOUS exchange of words (or is it a civil war?) is taking place among the financial advisers previously so keen to place our senior citizens' money with the Sharemax property syndications.

On the one hand, there's the group giving unqualified support to the SA Reserve Bank and the new independent board in a Section 311 scheme of arrangement.

On the other, there's Herman Waschefort, who has solutions – or perhaps dreams – that could result in capital losses and possible liabilities for the advisers.

Waschefort is now being branded a heretic in Sharemax circles.

Sharemax founder Willie Botha has also reappeared from the wilderness over the past two weeks. In a letter to his former colleagues – and especially the financial advisers – he's now singing the praises of the Reserve Bank as their saviour.

That's the same bank – and especially deputy registrar of banks Michael Blackbeard – whose status has quickly changed over the past two weeks from skunk to champion.

The reason, in brief, is the so-called directive given by Blackbeard himself to the two statutory managers – Neels Alant and Jaco Spies – he appointed for Sharemax and its syndications.

The directive states: investors' capital must be protected, no liquidations may be granted and investors' deposits must be refunded.

The advisers, probably unknowingly, with the assistance of new chairperson and former Judge Willie Hartzenberg and spokesperson Dawie Roodt, interpret that directive very conveniently as meaning – under the proposed 311 scheme of arrangement – no action may be taken by the manager that may cause capital losses.

In brief, no building – no matter what state it's in – may be disposed of at less than the syndication value.

In his letter, Willem (previously Willie) Botha, big chief of the old Sharemax, simply interprets the first directive as follows: "The Reserve Bank must protect investors' capital."

That might be a bit different from Blackbeard's original intention with his directive.

The gist of the 311 scheme of arrangement seems to be that no capital losses may be suffered and that the advisers will therefore escape any claims by investors.

That's the advisers' interpretation. In his letter to them, Theo van Grijp, one of a trio in control of DA-Assits, an organisation formed to protect the interests of brokers, shares the following good news with his fellow advisers.

At a meeting with Frontier, which now manages Sharemax's day-to-day activities, it was said "the advisers are very serious about the fact they will not be able to support any solution that will result in capital losses for the investors.

"If the Section 311 scheme excludes capital losses for the investor it automatically means no liability for the capital losses for the advisers. This is a very important point."

That's a unique way of interpreting the Reserve Bank's directive.

Blackbeard was very quick to confirm to Finweek last week that directive No 1 – which reads: "The investors' capital must be protected" – is indeed an instruction to the statutory managers to proceed as effectively as possible with investors' assets.

"Keep the losses and costs as low as possible; the instruction is not a fire sale," Blackbeard said.

The interpretation by the old Sharemax advisers, perhaps with some help from the new board of the syndications and the new management company, Frontier, that it means there may not be any capital losses is simply wrong.

The net rental income with the possible exception of Leeupoort, is simply far too low to justify the so-called syndication value of the buildings.

Even in the case of an orderly sale of the buildings, the prices that could be realised would in most cases be far short of 50c in the rand.

Of course, it suits the board of the syndications perfectly to have the advisers suddenly now supporting their 311 scheme of arrangement so eagerly.

Spies says there are currently more than 27 000 individual investments in the syndications. The number of people could be fewer, perhaps around 25 000, as some invested in more than one syndication.

To get the scheme of arrangement to work, the directors need the support of 75% of those 25 000 investors. Not only 75% of those who turn up at the meeting, but 75% of both the number and extent of the investors.

The assistance of the former advisers is therefore highly necessary to obtain that support.

In a special letter to financial advisers who marketed Sharemax Investments' property products, signed by Judge Hartzenberg, the board confirms that on March 1 this year it held a kind of information session with a group of advisers involved with Sharemax products.

Hartzenberg again pointed out how important it was for the advisers to keep up to date with developments and especially to make sure their clients (investors) got to see the original media and other releases.

The reason for that, Hartzenberg said, "was that the investors should not depend on newspapers and the radio, or on journalists' interpretations".

Hartzenberg is quite right, but then the releases and communication with advisers and the investors should preferably be fully complete from the beginning.

To the advisers, this isn't a journalist's interpretation. The first point of the Reserve Bank's directive – "investors' capital must be protected" – certainly doesn't mean the statutory managers may not dispose of an asset at less than the syndication value.

Investors will still suffer losses, even if the 311 scheme works perfectly and as things currently stand, the advisers can still be held liable for the capital losses investors would suffer.

* This article was first published in Finweek.
* To read more Finweek articles, click here.


Sharemax shareholder update
Board of Directors of the Sharemax Promoted Portfolio of Companies
23 February 2011

Statement from the board of directors of the companies in the Sharemax promoted portfolio of companies.

The board of the Sharemax related companies currently operating under the directive of the South African Reserve Bank (the SARB), is pleased to announce that good progress is being made with the proposed Schemes of Arrangement Process. The board remains convinced that this Process provides the best solution and protection to investors and other interested parties.

In previous press releases the board reported that the relationships between the various entities related to the Sharemax promoted portfolio of companies (the companies), are complex and in some instances uncertain. Due to these complexities, the board has decided to propose Schemes of Arrangement in respect of the companies, in order to restructure the financial affairs of the companies to the best benefit of investors and other interested parties (“the Schemes”).

A likely alternative to the proposal of the Schemes may be the liquidation of some or all of the companies, which will inevitably result in significant losses to investors and other interested parties. It is commonly known that a liquidation process has no result, other than causing substantial losses, as a result of the very process of liquidation, and the forced sale scenarios, inevitably associated with a liquidation process.

In addition, investors and other interested parties, including financial advisors having advised investors to invest in the Sharemax promoted portfolio of companies, need to be cognisant of the following. Should the board be unsuccessful in restructuring the affairs of the companies to the extent that any unlawful structures associated with the companies are not rectified by virtue of the proposed Schemes, the business conducted by the companies prior to the directives having been issued by the SARB, may be determined as having formed part of possible illegal scheme. The effect this off may well be that investors who had received income under such a possible illegal scheme, may be required to repay prior income received.

The same applies in respect of financial advisors, having received commissions on their activities in promoting the business of the companies, and having advised their clients to invest in the Sharemax promoted portfolio of companies. In short, financial advisors may well face the possibility of having to repay their commissions and/or face possible litigation, based on advice provided to investors, to invest in such a possible illegal scheme.

Furthermore, should the board not be determined and resolute in its attempts to restructure the affairs of the companies in the aforesaid manner, or be unsuccessful with the proposing of and having the Schemes sanctioned by the High Court, the board will have no alternative but to report to the SARB that it has been unsuccessful. In this event, the SARB may well instruct the board to comply immediately with the directives of the SARB, to the extent that all monies invested in the various projects undertaken by the Sharemax promoted portfolio of companies, will have to be repaid.

Since it will be practically impossible to “repay all monies”, the only alternative will be the liquidation of some or all of the companies, with the consequential serious negative impact on interests of investors and other interested parties. A liquidation process, as opposed to a successful restructuring of the affairs of the companies, so as to eradicate any possible illegality, will undoubtedly bring with it, the extremely negative effects of illegality as referred to above. Moreover, in specific circumstances, the SARB may decide not to oppose a liquidation application by other parties, should the board not be able to present an acceptable plan(s) that are approved by the relevant stakeholders.

The board is aware of the creation of forums and pressure groups which purport to represent certain “interest groups”. The board is willing to engage with credible support groups provided they are properly constituted, representative and with credible objectives.

However, the board is concerned that the creation of some of these groups are designed to jeopardise or undermine the progress made so far. It is also clear to the board that the demands and proposals by some of these groups are impractical and based on a misunderstanding of the issues regarding the legal consequences of and the board’s intentions with the proposed Schemes.

Rumours to the effect that the board refuses to consider reasonable offers on properties are also factually incorrect. The board has received various offers and where these offers were considered reasonable and in the best interests of the companies, the necessary steps were taken to eventually sell these properties as part of the Schemes. Furthermore, the board is legally and duty bound at all times to act in consultation with the SARB appointed statutory managers and to obtain approval from them in regard to all actions of the board relating to its dealings with assets of the companies.

The board is also aware of a process attempting to replace the current board of directors. As part of the Schemes, investors will get the opportunity to ratify the appointment of the current board or to replace the current board with other directors. Attempts to force such a change prematurely could contribute to the derailment of the existing process, will be resisted.

The board is also concerned that attempts to replace the current board is driven by parties having agendas other than those of the board, and in particular, agendas aimed at either liquidating the companies and/or utilising the assets of the companies in a manner and to the effect which will be less beneficial to the interests of the investors and other interested parties. The board’s aims and activities are primarily intended to serve the best interests of investors and other interested parties, with a view to providing the best possible financial benefit to investors and other interested parties, without personal gain to the members of the current board and most certainly with a view to averting the losses undoubtedly associated with any liquidation process.

The board is also aware of actions by certain pressure groups and/or individuals, including attorneys, to solicit proxies from investors. The board urges investors to study the Schemes of Arrangement documentation as soon same are available before signing any proxies. The Schemes of Arrangement documentation will include proxy forms, should investors wish for someone else to represent them at the upcoming meetings of investors, following the implementation of the Schemes.

Any mooted “judicial management process” is concerned, the board advises that it has carefully considered this, and has also taken extensive professional advice in regard thereto. Investors are again cautioned against supporting such a process, as it is the considered opinion of the board that this process is nothing more than a carefully designed action aimed at ultimately procuring the liquidation of certain of, if not all, of the companies. Clearly, the intention is to benefit, not investors, but liquidators and parties affiliated to liquidators whilst ignoring the serious negative effects of a liquidation process, including exorbitant fees and expenses to be paid, to liquidators and parties affiliated to liquidators. The Board will, and by reason of the fact that no judicial management process will achieve any results other than eventual liquidation, oppose any judicial management process.

A brief status report:

· Agreement with Sharemax shareholders

The board has been and is in discussion with relevant parties and agreements have been reached in some instances (see previous press releases). Following the agreements already concluded, the board is pleased to announce that it is on the verge of reaching an agreement with the shareholders of Sharemax Investments. More detail will be provided as soon as these agreements have been concluded.

· Property management

The Frontier board has decided to subcontract some of the property management of seven properties (Athlone; die Meent; Oxford Gate; Liberty; Range View; The Fern; Rivonia) to JHI Properties as from March 1, 2011.


Sharemax lawyers called to pay back
October 22 2010 at 03:48am


A 105-year-old Pretoria-based law firm connected to the multibillion-rand property syndications marketed by troubled Sharemax Investments could be liquidated.

Weavind & Weavind has been served with a written demand for repayment of R1.55 million to 11 investors in terms of section 145 of the Companies Act, which is a precursor to launching an application for the liquidation of the firm.

The demand relates to funds deposited by the investors into the law firm's trust account for The Villa syndication, a R2.8 billion retail property development in Pretoria's eastern suburbs that was promoted and marketed by Sharemax.

Construction on The Villa and Zambezi Retail Park syndications ground to a halt last month when funds from Sharemax to Capicol dried up. Capicol is the developer of both projects.

Kobus Schabort of Schabort Attorneys, who represents the 11 investors, confirmed yesterday that the letter of demand was served on Weavind & Weavind early last week.

Schabort said his firm had not yet received any response from Weavind & Weavind, but in terms of the Companies Act the law firm had three weeks to respond. He confirmed that his intention was to initiate legal proceedings to liquidate Weavind & Weavind if it failed to repay or put up security for the amount demanded.

Attempts to obtain comment from Eckhard le Roux, the managing partner of Weavind & Weavind, were unsuccessful.

Schabort Attorneys said it had to execute the claim against Weavind & Weavind before a claim could be lodged against the fidelity fund of the Law Society of the Northern Provinces. However, a R200 000 claim has already been lodged with both the fidelity fund and Attorneys Insurance Indemnity Fund related to the alleged illegal release of funds deposited into the trust account of Weavind & Weavind for the Zambezi Retail Park syndication.

Over the past 13 years, Sharemax has raised billions of rands, much of it from pensioners, for more than 30 property syndications. But last month the registrar of banks appointed statutory managers to manage the repayment of funds to investors from all its syndications after an investigation revealed that Sharemax's funding model contravened the Banks Act.

A planned high court application last month on behalf of the 11 investors to place Sharemax under judicial management was stymied when the registrar of banks appointed the statutory managers, which stayed all legal proceedings against the company.

Weavind & Weavind was identified in various prospectuses issued by Sharemax as the attorneys involved in the property syndication scheme, and was responsible for administering deposits made into its trust account for the syndications.

Neither the Zambezi nor The Villa property syndication schemes have been transferred to the property syndication vehicle. The withdrawal of funds from the trust account before the transfer of the properties to the syndication vehicle is prohibited in terms of a Trade and Industry Department notice issued in 2006

( Businessreport )

Acting HAWKS head to decide on Shadrack Sibiya's suspension

Acting Hawks head to decide on Sibiya's suspension

Shadrack Sibiya is accused of facilitating the illegal rendition of four Zimbabwean men from Diepsloot.
FILE: The Hawks say a decision on whether Shadrack Sibiya will be suspended will be made by acting head Mthandazo Ntlemeza within the next few days. Picture: Supplied.

Govan Whittles | (EWN)

JOHANNESBURG – The Hawks say a decision on whether Shadrack Sibiya will be suspended will be made by acting head Mthandazo Ntlemeza within the next few days.

Sibiya is accused of facilitating the illegal rendition of four Zimbabwean men from Diepsloot, north of Johannesburg, over the Beitbridge Border crossing in 2010, which is the same reason Hawks boss Anwa Dramat was placed on precautionary suspension.

On Monday, he made representations to Ntlemeza, explaining why he believes he's innocent.

Hawks spokesperson Hangwani Mulaudzi says, “The matter is receiving attention. We will be making an announcement soon. As we speak now, that position has not been taken as yet.”

The rendition case was investigated by the Independent Police Investigative Directorate (IPID).

It was earlier reported that Ntlemeza arrived in Cape Town to meet with senior officials in the province to discuss sensitive ongoing investigations.

Ntlemeza is in charge of the Priority Crimes Unit while Dramat is on suspension.

But Ntlemeza could be out of office by the end of the week if the High Court rules the action taken against Dramat by Police Minister Nkosinathi Nhleko was illegal.

Ntlemeza has been accused of purging Dramat’s allies through suspension notices and having links to former crime intelligence boss Richard Mdluli.

Mulaudzi says Ntlemeza has already visited KwaZulu-Natal in a bid to ensure the unit's work is not disrupted.

“It’s also an opportunity to give the members a platform to talk to him. We are trying by all means to make sure that we bring stability to the unit and hopefully with his visit, we will be able to make sure our members concentrate fully on what they’re supposed to do.”

(Edited by Tamsin Wort & Gadeeja Abbas)

Monday, January 19, 2015

DA wins Zuma 'thief' SMS court battle


DA wins Zuma 'thief' SMS court battle
2015-01-19 10:55
(File, AP)

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DA to appeal ruling on Nkandla SMS
DA ordered to retract Zuma SMS
SMS ruling a victory for freedom of speech - DA

Johannesburg - The DA was within its rights when it said in an SMS that President Jacob Zuma had stolen money, the Constitutional Court ruled on Monday.

It set aside a ruling by the Electoral Court that an SMS calling Zuma a thief fell short of the test for fair comment.

The Constitutional Court set aside the Electoral Court's ruling in favour of the African National Congress, saying the opposition Democratic Alliance did act within its rights when it sent the SMS.

In the SMS, sent to over 1.5 million voters in Gauteng last March, the DA said: "The Nkandla report shows how Zuma stole your money to build his R246m home. Vote DA on 7 May to beat corruption. Together for change."

Protector’s findings

The SMS followed findings by Public Protector Thuli Madonsela that Zuma and his family unduly benefited from some of the R246m spent in security upgrades to his KwaZulu-Natal residence.

The ANC went to the High Court in Johannesburg to secure an order declaring it amounted to the publication of false information.

But the judge agreed with the DA who argued the text message was fair comment based on the protector's findings.

The DA also said it was entitled to send the message in terms of its right to freedom of expression and right to political activity.

Freedom of speech

The High Court found that the SMS amounted to fair comment and dismissed the ANC's application.

But the ruling party successfully appealed to the Electoral Court which found that the SMS fell short of the test for fair comment.

The matter went to the Constitutional Court where the DA argued this was an important test for freedom of speech and free political activity. It said the track record of those in power needed to be open to robust scrutiny, especially during election time.

But the ANC maintained that the SMS was a false statement.
Read more on: jacob zuma | thuli madonsela | da | anc | nkandla upgrades
Nhleko jumped gun on Dramat, court hears
2015-01-19 09:57