Liquidation plan in place -- Pickvest

Liquidation plan in place
THE boards of eight Pickvest syndication schemes have resolved that the companies be placed into voluntary business rescue. They have appointed business rescue practitioner Hans Klopper, who is best known for his appointment as joint liquidator of Consolidated News Agencies (CNA), back in 2003.

September 2011 | Julius Cobbett

THE boards of eight Pickvest syndication schemes have resolved that the companies be placed into voluntary business rescue. They have appointed business rescue practitioner Hans Klopper, who is best known for his appointment as joint liquidator of Consolidated News Agencies (CNA), back in 2003.

Morkel Steyn, a director of all eight Highveld syndication schemes, says in an affidavit that it was “imperative” to implement the business rescue and protect investors from liquidation and “massive losses’.

Public investors have poured nearly R4,5 billion into the eight syndication schemes. Of this,
R3,5 billion has gone to the four most recent schemes, Highveld 19-22. These syndications find themselves in the precarious position of having paid for properties they don’t own, as reported by CitiBusiness in April.

A business rescue is an option in the new Companies Act. If the directors of a company have reasonable ground to believe that a company is financially distressed, and there appears to be a reasonable prospect of rescue, they can implement a business rescue.

While under rescue, a company is temporarily protected from people and entities that have claims against it. Thus, liquidation may be prevented.

By placing the eight companies in business rescue, Steyn is admitting that all is not well in the Pickvest portfolio. In his affidavit he refers to a dispute between Bosman & Visser and Nic Georgiou’s Zelpy group of companies.

Bosman & Visser is an intermediary that stands between the Highveld syndications and the person they buy the properties from, apparent billionaire Nic Georgiou. The syndication companies would pay investors’ money to Bosman & Visser, who would deduct Pickvest’s fees and commission, and in
turn, transfer the remaining cash to Georgiou.

At some point Georgiou became suspicious that Bosman & Visser had been short-changing him, and requested an audit. Georgiou claimed he had been underpaid to the tune of R883million.

An audit was conducted by Calculus Chartered Accountants, who supposedly gave Bosman & Visser a clean bill of health. To this day, a letter, dated May 27 2011, is published on Pickvest’s website that suggests the dispute between Bosman & Visser and Georgiou has been resolved.

This flies in the face of Steyn’s affidavit, dated September 7, 2011. Steyn notes: “There is a dispute between Bosman & Visser and the Zelpi (sic) group of companies whether the whole purchase price in respect of the four companies of R3,2 billion had been paid. The latter group maintains there was a short payment of R883million.”
– julius@moneyweb.co.za