Sharemax Television Ad 2009...A plea for proper investigation into Sharemax

Sharemax Television Ad 2009
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Sharemax update: Chris de Beer - lawyer, De BeerJanse v Vuuren & De Wet Inc
Interviewer ProfileAlec Hogg is a writer and broadcaster. He founded Moneyweb and is its editor-in-chief.

A plea for a proper investigation into the debacle.
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ALEC HOGG: Well, Chris de Beer has got a similar case that he's digging into. He's a lawyer at De Beer Janse v Vuuren & De Wet. Chris, you've taken a particular interest in Sharemax. We'll get on to that in a moment, but why? What stimulated you to be interested in this whole saga?

CHRIS DE BEER: Hi Alec. Ja, we are acting on behalf of investors in some of the syndication companies and we had a proper look. We've been investigating the scheme for a while now, and ... down to the fact that in our papers we basically state in 700 pages what we believe the state of affairs is. Certainly some of the syndications are doing much better than the others, but the application is brought with a view of ultimately ensuring protection of investors and the public.

ALEC HOGG: You mention an application. You too are going to the courts to try and resolve an issue that you feel is problematic with those who are currently running the Sharemax portfolios. Why are you concerned that they aren't doing a good job?

CHRIS DE BEER: As far as "basically concerned that they are not doing a good job", I think the concern is more regarding the powers that are divested to the statutory managers. They are appointed in terms of the Banks Act, and they've got ... limited powers, whereas if you apply for a judicial manager they've got far more powers than the statutory manager, and they can do proper investigations into financial affairs. They can deal properly with any irregularities if there should have been any. They can better ensure the protection of investors.

ALEC HOGG: You say that you are representing investors. How many investors are those, Chris?

CHRIS DE BEER: Well, it's a group of investors. You've got people putting a lot of money in...

ALEC HOGG: So it's a lot.

CHRIS DE BEER: Pensioners as well. One of my clients put R10m in one of these syndications.

ALEC HOGG: What possessed him to do that? R10m in a Sharemax syndication?

CHRIS DE BEER: It's a lot of money into what was sold as being a good property investment.

ALEC HOGG: So he bought the story, he gave some broker, what, probably R3m in commission, and he's now struggling to get his money back, or at least to get some of it back?

CHRIS DE BEER: You see, that's the reason I say, Alec, there should be proper investigation into this. We don't want to be responsible with statements we make. The bottom line is that we see that some of the properties, specifically the latest ones, are grossly overvalued. And we can't see how with limited powers any statutory manager can properly protect investors and the public. If you have a look at the profile of the investors, I mean, it's old people, it's basically a mix. But ja, it should be a very responsible approach, and that's why we also try to ensure continuity by requesting the court to appoint the statutory managers as the co-judicial managers.

ALEC HOGG: So you want judicial managers. In South Africa's history, though, the past 27 years, only one property has come out of judicial management. All the others have actually gone bust. Is that not something that might happen here - that you then get the liquidators getting their hands on Sharemax, and heaven knows if anything's going to come out after that's happened.

CHRIS DE BEER: What I can tell you about that, Alec, is that at this stage we are approaching the court to get the permission in terms of the appointment of the statutory managers to bring judicial management applications in respect of seven of the syndication schemes. I think the two most problematic schemes are the Zambezi Retail Park and The Villa Retail Park. We are basically bringing two judicial management applications for Zambezi and for Villa.

ALEC HOGG: Those are the two biggest ones, are they?

CHRIS DE BEER: Yes. The two biggest ones, the two latest ones and also the ones with the biggest problems, looking at values.

ALEC HOGG: Chris, just on a broader sense, you say you put together 700 pages for the courts. Is there stuff that's come out in your investigation that we haven't seen yet from Sharemax?

CHRIS DE BEER: Alec, I can tell you this much. The papers are available from tomorrow at 10 o'clock, on an internet website. It's a link that you can find on the internet site. It's a public document, so anybody who wants to read it can go and read it there.

ALEC HOGG: How bad were these guys - Mr Willie Botha and his team, his cohorts?

CHRIS DE BEER: Well, I think it's for the reader to decide. At this stage we are strongly of the view that there should be further investigation into the affairs of the group. I think it's quite clear that there have been irregularities, otherwise there wouldn't have been statutory managers. But ja, I think specifically if you look at the way that they conducted loans between the companies - I think that's something that needs to be attended to.

ALEC HOGG: Chris, just finally - did you track down any assets abroad, overseas?

CHRIS DE BEER: Well, at this stage we haven't really had the opportunity to do that, but that's something that a judicial manager will probably have a proper look at, and we'll investigate that as we go further.

ALEC HOGG: Chris de Beer is a lawyer at De Beer Janse v Vuuren & De Wet, and he's done some serious investigation, as you heard, into Sharemax. We will be posting that link onto Moneyweb tomorrow. You can go and read the 700 pages and make up your own mind.

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