Monday, November 14, 2011
The luxurious lives of Sharemax bosses
The luxurious lives of Sharemax bosses
This is the luxury life of the two top managers of collapsed property syndication company Sharemax – while thousands of investors have lost most, if not all, of their money.
City Press has traced about R250 million of assets owned by trusts and companies of Sharemax’s former managing director, Willie Botha, and his marketing manager, Andre Brand.
Botha and Brand were, for almost a decade, at the helm of Sharemax as about 40 000 people invested an estimated R5 billion in the company’s 50 property syndicates.
The Reserve Bank ruled in May last year that Sharemax had contravened the Banks Act and had illegally collected deposits from investors.
City Press can reveal this week that one of Brand’s acquaintances, Wietz Nell, has handed incriminating documents and information to the police’s Hawks unit.
The Hawks would not say whether they have launched an investigation against Botha and Brand.
In the documents, Brand accused Botha in a memorandum of illegally pocketing at least R9?million of money intended for investors.
Brand also alleged that Botha had, over a period of four years, pocketed R53 million in “commission” from a Sharemax front company. Brand demanded a R24.5 million share from Botha.
Botha this week ignored multiple attempts to get comment.
Brand said this week that Nell had obtained the documents dishonestly, but he did not deny their veracity.
Brand said that he had in the meantime cleared his complaint with Botha and that he withdrew any allegations against him. He said he now believed the money was paid legally to Botha.
Tomorrow, a group of Sharemax investors plan to bring an urgent court application to declare Sharemax bankrupt, and to freeze the assets of Botha and Brand.
Among the assets that the investors want frozen is Botha’s luxury yacht, which he keeps in the Egyptian port of Hurghada in the Red Sea.
The Italian-designed Scuba Scene is apparently worth between R120 million and R150 million, and is wholly owned by the Willem Botha Family Trust.
The boat has its own website and is described as “43 metres of classic nautical beauty and luxury”.
It says the Scuba Scene is a “true marvel of design, technology and style to provide all its passengers with an aesthetically pleasing masterpiece”.
The investors also want to ask the high court to prevent Brand from selling his 3 000 hectare game farm near Thabazimbi in Limpopo.
The game farm, Thaba Motswere, has been valued at R79 million, and has giraffe, eland, kudu, gemsbok, cheetah and leopard.
The farm’s lodge alone cost Brand an estimated R20 million to build and resembles a five-star hotel with all possible amenities.
Brand is desperate to sell the farm and even considered a price of R21.5 million last month.
Botha has an equally luxurious game farm in Marken in Limpopo that is thought to be worth even more as it has the Big Five – elephant, rhino, buffalo, lion and cheetah.
Botha lives in a double-storey villa in the exclusive Silver Lakes Estate in Pretoria. Brand recently signed a contract to sell his mansion in Mooikloof in Pretoria for R15 million.
Botha was in August “relieved” of his duties and resigned as director. Brand has also since left the company.
In September, the Reserve Bank put Sharemax under statutory management, ordering Sharemax to repay its investors, but there was no money left to do so.
The documents that City Press obtained shows that after Botha and Brand had left Sharemax, they were still paid R15 million commission.
The company that is managing Sharemax on behalf of the Reserve Bank, Frontier Asset Management and Investments, did not respond to queries this week.
A forensic auditor, André Prakke, studied the documents obtained by City Press and concluded that there was evidence of money laundering, theft and fraud.
Prakke says that 80% of the money that was invested in Sharemax is gone.
Prakke has investigated Sharemax for many years and has submitted statements about the company to the high court.
He says that the commission that Brand refers to in his memos to Botha has never been revealed in any of Sharemax’s property portfolios.
- City Press
Sharemax tot weeldemax
"Die Italiaans-ontwerpte Scuba Scene is glo tussen R120 en R150 miljoen werd . Die jag, wat in die Rooi See is, het 13 en-suite kajuite, elk met sy eie televisie en lugreëling. Die boot het ‘n bemanning van veertien, insluitende ‘n maritieme ingenieur" Foto Rapport
Die Italiaans-ontwerpte Scuba Scene is glo tussen R120 en R150 miljoen werd . Die jag, wat in die Rooi See is, het 13 en-suite kajuite, elk met sy eie televisie en lugreëling. Die boot het ‘n bemanning van veertien, insluitende ‘n maritieme ingenieur
’n Superluukse boot van meer as R120 miljoen, wildplase van meer as R100 miljoen en rykmanshuise is ván die weelde waarmee Sharemax se twee topbestuurders hulself omring terwyl duisende beleggers nie meer rente op hul beleggings verdien nie en waarskynlik hul geld kwyt is.
Rapport het R250 miljoen se bates opgespoor wat mnr. Willie Botha, die voormalige besturende direkteur van dié mislukte eiendomsindikaat, en sy bemarkingsdirekteur, mnr. André Brand, gesamentlik besit. Botha en Brand was bykans ’n dekade lank aan die stuur van Sharemax.
In dié tyd het sowat 40 000 beleggers, onder wie talle bejaardes, ’n geraamde R5 miljard in 50 eiendomsindikate belê.
Die Reserwebank het in Mei verlede jaar bevind Sharemax oortree die bankwet en het onwettig deposito’s van beleggers ingesamel.
Rapport kan ook onthul mnr. Wietz Nell, een van Brand se sakekennisse, het die afgelope week inkriminerende dokumentasie aan die Valke oorhandig.
Die Valke wou nie sê of hulle ’n ondersoek teen Botha en Brand begin het nie.
In dié dokumentasie, wat ook in Rapport se besit is, beskuldig Brand Botha in ’n memorandum daarvan dat hy na bewering R9 miljoen van die beleggers se rentegeld onwettig in sy sak gesteek het.
Brand beweer Botha het benewens die betaling van R9 miljoen ook glo oor ’n tydperk van vier jaar sowat R53 miljoen se “kommissie” van ’n frontmaatskappy van Sharemax ontvang.
Brand sê hy het self nie sy regmatige deel gekry nie en eis R24,5 miljoen van Botha.
Botha het die afgelope week geweier om sy e-posadres aan Rapport te verskaf om vrae te beantwoord.
Teen middernag Vrydag het hy egter ’n reaksie van ses bladsye lank gestuur en die aantyging teen hom ten sterkste ontken.
Brand sê Nell het die dokumentasie onder valse voorwendsels bekom.
Hy het nie die egtheid van die dokumente en dat hy die skrywer van die memorandum is ontken nie.
Brand sê hy het intussen alle onduidelikhede met Botha uitgeklaar en is nou tevrede Botha het dié geld regmatig verdien.
Hy sê hy trek alle aantygings teen Botha terug.
Intussen beplan ’n groep beleggers om vandeesweek ’n dringende interdik in die hooggeregshof in Pretoria te bring om Sharemax bankrot te laat verklaar en Botha en Brand se bates te bevries.
Onder die bates wat die beleggers wil bevries, is Botha se luukse jag wat hy in ’n hawe in Hurghada aan die Rooi See in Egipte hou.
Die Italiaans ontwerpte Scuba Scene is glo tussen R120 en R150 miljoen werd en word deur die Willem Botha-familietrust besit.
Dié boot het sy eie webtuiste waarop dit beskryf word as “43 m se klassieke seevaart-prag en luuksheid” wat aan die verwagting van die kieskeurigste reisiger sal voldoen.
Die Scuba Scene het 13 en suite-kajuite, elk met sy eie TV en lugversorging. Die boot het ’n bemanning van 14, insluitende ’n maritieme ingenieur en ’n sjef.
Die beleggers wil die hof ook vra om Brand te verhinder om Thabo Motswere, sy wildplaas van nagenoeg 3 000ha naby Thabazimbi in Limpopo, te verkoop.
Die plaas is vir R79 miljoen gewaardeer en daar is onder meer kameelperde, elande, gemsbokke, jagluiperds en luiperds.
Die huis op die plaas het meer as R20 miljoen gekos en het die weelde van ’n vyfsterhotel.
Brand – sy dogter is verloof aan die Springbok-senter Wynand Olivier – probeer van die plaas ontslae raak en was verlede maand bereid om dit vir R21,5 miljoen te verkoop.
Hy wou dit in kontant hê.
Botha het ’n ewe luukse en nog groter wildplaas naby Marken in Limpopo wat nog meer werd kan wees omdat hy die Groot Vyf op sy plaas aanhou.
Botha woon in ’n luukse dubbelverdieping-villa in die eksklusiewe Silver Lakes-landgoed in Pretoria.
Brand het pas ’n kontrak onderteken om sy luukse huis in Mooikloof in Pretoria vir R15 miljoen te verkoop.
Nadat die Reserwebank bevind het Sharemax het die bankwet oortree, is Botha van sy pligte “onthef” en hy het as direkteur bedank. Brand het “uitgetree”.
Sharemax is in September verlede jaar onder die Reserwebank se bestuur geplaas.
Die Reserwebank het Sharemax beveel om die beleggers terug te betaal, maar daar was nie geld daarvoor nie.
Die nuwe, sogenaamde onafhanklike bestuur van Sharemax het reeds erken dat beleggers die grootste deel van hul beleggings gaan verloor.
Die dokumentasie in Rapport se besit toon nadat Botha en Brand by Sharemax weg is, het hulle nog bykans R15 miljoen se “kommissie” verdien.
Die maatskappy wat Sharemax namens die Reserwebank bedryf, Frontier Asset Management and Investments, het nie die afgelope week op navrae gereageer nie.
’n Forensiese ouditeur, mnr. André Prakke, het die afgelope week Rapport se dokumentasie bestudeer en gesê op sigwaarde is daar aanduidings van bedrog, diefstal en geldwassery.
Prakke ondersoek en bestudeer Sharemax al jare lank en sê hy glo sowat 80% van beleggers se geld is weg.
Hy sê die kommissies waarna Brand in sy briewe aan Botha verwys, is nooit in enige van Sharemax se prospektusse verklaar nie.
Related story to the above..........
Law firm: Summons against Sharemax
14 Jan 2011
Weavind & Weavind, the attorneys acting for Sharemax Investments has launched a R9-million damages claim against Pierre Hough, managing director of Chase International, Chase Consulting, financial planner Toffie Risk and Johanna Margaretha Magdalena Bosman, an investor in Zambezi Retail Park syndication.
The firm is claiming R2-million while its seven directors are each claiming R1-million from Bosman, Hough and Chase Consulting because of damages that they allege were a result of Bosman’s conduct.
In its particulars of claim, Weavind & Weavind list a number of statements alleging that funds deposited into the firm’s trust account had been stolen. The allegations were apparently made in affidavits drafted in support of a complaint to the Law Society of Northern Provinces and a criminal case.
Weavind & Weavind says the allegations are wrongful and defamatory and implied that the directors were implicit in the theft and shared the proceeds. It claims the statements were made with the intention to defame the firm and its directors and injure their reputation.
Hough, who had assisted in compiling the affidavits, said that the damages claim lacked substance and merit and he confirmed that all the respondents named in the Weavind & Weavind application would defend the action.
He said the damages claim was aimed at scaring off other investors in the syndication to prevent them from lodging claims against the law firm.
Jaco Fourie, a senior legal official within the disciplinary department of the Law Society of the Northern Provinces says the organisation is awaiting a response from Hough to the allegations made by Weavind & Weavind. Once it has received the response it will present its evidence to a disciplinary committee of the law society.
A case of fraud was opened against the firm after Sharemax defaulted on monthly payments to investors in September last year. The commercial crimes unit is investigating the case.
Readers' Comments Have a comment about this article? Email us now.
It was the illegal release of the trust funds that started the whole feeding frenzy and made a joke of all the investor safeguards provided for in the Unfair Business Practices Act. Go for them Pierre. You have a lot of support out here - how about us starting a fund to pay a bounty on each one of those involved being put behind bars. - L. Oldacre
Hi, lees News 24 van vandag,kyk in watter weelde leef Botha en Brand,hoe kan hulle met die bedrog wegkom terwyl ek en my vrou, altwee pensionarise, van dag tot dag moet leef op genade,ek kan ook my eiendom verloor,het nie meer n inkomste nie en ons leef op R2,000 n maand.Mense,hoe werk die wet dat skelms ons geld kan vat en daarmee gegkom?Ek wat n leek is weet nie watter kant toe nie,het probeer werk kry maar is te oud,het 10 jaar terug n hartomleining gehad.Het ook nie geld om n saak te maak nie,glo nie dit sou in alle geval gehelp het nie.WAT kan ek doen,groete. - Willem
The Desk is responsible for the receiving, evaluating and disseminating of suspicious corrupt activities reports which have to be reported by persons in certain positions to any police official in terms of Section 34 of the Prevention of Corrupt Activities, 2004 (Act No. 12 of 2004).
The Prevention and Combating of Corrupt Activities Act, 2004 (Act No.12 of 2004), came into operation on 27 April 2004.
According to section 34(1) of the Act, any person who holds a position of authority (defined in section 34(4) of the Act), who knows or ought reasonably to have known or suspected that any other person has committed an offence (of corruption) in terms of sections 3 to 16 or 20 to 21 of the Act or theft, fraud, extortion, forgery or uttering of a forged document involving an amount of R100 000,00 or more, must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official.
Section 34(2) of the Act provides that any person who fails to comply with subsection (1) is guilty of an offence.
From the above it is clear that :
Certain persons, namely those holding a position of authority, irrespective of whether they are employed in the private sector or public sector, must report corruption (irrespective of the amount involved) or certain common law offences, namely theft, fraud, extortion, forgery or uttering of a forged document (involving an amount of R100 000,00 or more).
For purposes of subsection (1), the following persons hold a position of authority, namely-
the Director-General or head, or equivalent officer, of a national or provincial department;
in the case of a municipality, the municipal manager appointed in terms of section 82 of the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998);
any public officer in the Senior Management Service of a public body;
any head, rector or principal of a tertiary institution;
the manager, secretary or a director of a company as defined in the Companies Act, 1973 (Act No. 61 of 1973), and includes a member of a close corporation as defined in the Close Corporations Act, 1984 (Act No. 69 of 1984);
the executive manager of any bank or other financial institution;
any partner in a partnership;
any person who has been appointed as chief executive officer or an equivalent officer of any agency, authority, board, commission, committee, corporation, council, department, entity, financial institution, foundation, fund, institute, service, or any other institution or organisation, whether established by legislation, contract or any other legal means;
any other person who is responsible for the overall management and control of the business of an employer; or
any person contemplated in paragraphs mentioned above, who has been appointed in an acting or temporary capacity.
Reports of corruption or the identified common law offences must be reported to any police official of the SA Police Service. The fact that a person contacted the National Anti-Corruption “hotline” for the Public Service or contacted another law enforcement agency does not exonerate him/her from the obligation to report to the SAPS. Failure to report to the SAPS constitutes an offence.
The police official who receives a report of corruption or the common law offences set out in subsection (1) of the Act must, according to section 34(3) of the Act, “take down the report in the manner directed by the National Commissioner and forthwith provide the person who made the report with an acknowledgement of receipt of such report.”
The National Commissioner’s directions were published in Government Gazette No. 26552 of 16 July 2004, Government Notice No 837. These directions prescribe to police officials who receive a report in respect of corruption or any of the other identified offences in which format they must take down the report and provide an acknowledgement of receipt and what steps they must take to ensure that the report receives dedicated attention with a view to criminal investigation.
Reports can be made in any manner by the person who holds a position of authority and such person may even use another person to report the offence to the SAPS (“cause such knowledge/suspicion to be reported....”). A person who is compelled by the Act to report the identified offences to the SAPS, may, however, not report anonymously, or use the whistleblowing mechanisms of the Protected Disclosures Act, 2000 (Act No. 26 of 2000), to circumvent their responsibilities in terms of the Prevention and Combating of Corrupt Activities Act, 2004.
Can be contacted at (012) 393 2108
Fax prescribed form to (012) 393 2481
The form on which a report must be submited.
Related to the above story
An open letter to the regulators
Sharemax Investments (Pty) Ltd and Sharemax Premium (Pty) Ltd
Please reply to my letter
Mr Trevor Manuel
Minister of Finance
Republic of South Africa
Mr Mandisi Mpahlwa
Minister of Trade and Industry
Republic of South Africa
12 March 2007
Sharemax Investments (Pty) Ltd and Sharemax Premium (Pty) Ltd
A. General comments and questions
I refer to my previous lettter of 8 October 2006 (copy attached hereto for ease of reference and named Ministers). I have received no reply to that letter.
I again declare my interest in that I am involved in litigation with Sharemax Investments (Pty) Ltd under case number 3208/2006 in the Pretoria high court. I understand and appreciate that you don't want to get involved in a private court dispute. However, nothing stops the respective regulators to establish the facts independently and act accordingly.
Since I have last corresponded with you, the serious regulatory and compliance issues raised in the Prakke report (Part of the above court record) had become more burning as a result of ongoing and further non-compliance by Sharemax Investments (Pty) Ltd.
I have recently corresponded with Gerry Anderson, Deputy Registrar: Financial Services Providers. He advised me as follows:
"As you are aware, the FSB does not regulate property syndication promoters, but this falls under the Department of Trade and Industry. The proper application of the FAIS Act is our only concern in this area. If you have evidence that any company is involved in deposit taking activities, please liaise directly with the Registrar of Banks."
The correspondence with Mr Anderson and annexed material had been published on the website of Insurance Times and Investments. It is not attached hereto but available here.
I prefer to look at the Sharemax situation holistically. For that reason I address this letter to both the Finance and Trade and Industry Ministries.
Sharemax has gone through three phases in its history. It has now entered the fourth phase.
The first phase during the period 1999-2003 was to raise funds from the public through a so-called trust structure. This was unlawful in terms of section 30 of the Companies Act and later too in terms of the Collective Investments Schemes Act. In October 2003 the Financial Services Board prohibited the further raising of funds through this trust structure. The history of these events are recorded if affidavits by Gerry Anderson and Jurgen Boyd dated respectively 21 February 2006 and 17 February 2006. The affidavits were filed under case number 3208/2006 in the Pretoria high court (Why was this scheme not outlawed much earlier in terms of section 30 of the Companies Act?).
The second phase followed thereafter when funds were raised in terms of prospectuses registered under the Companies Act. Prospectuses did not comply in all respects with Schedule 3 of the Companies Act. Vital disclosures necessary to appraise the risk of property syndications were simply not made. As examples I would like to cite paragraphs 6 (h), 12 (d), 12 (e) and 26 of Schedule 3. . Please also refer to my published article Who regulates unlisted public offers? attached hereto. During this phase an unwillingness to disclose financial statements was exposed. It also transpired that many Sharemax syndications failed to finance interest commitments to investors. Sharemax then funded it with subsidies and/or loans.
The third phase was introduced with the promulgation of the new disclosure requirements for property syndications in Government Gazette 28690 of 30 March 2006. I will return to this later.
The fourth phase has now been introduced with the launch of a new product by Sharemax Premium (Pty) Ltd. Given the practice to subsidise interest payments and given the likely liquidity squeeze once investors consider their investments to be mature, the new product is in all probability designed to meet these cash flow challenges. I will return to this later.
B. Prospectus of Range View Shopping Centre Holdings Limited registration number 2006/028278/06
A copy of the prospectus is attached hereto.[Download this here.] To the best of my knowledge it is the latest prospectus issued by Sharemax. I use this as a case study.
The opening date of the prospectus is 20 February 2007 and the closing date 19 May 2007.
On page 1 it is stated: "The Registrar of Companies has scrutinized the information disclosed in the prospectus". Is this statement factually correct?
On page 1 it is stated: "Range View Shopping Centre Holdings Ltd registered a prospectus on 31 January 2007. That prospectus was not issued after date of registration and has been withdrawn." Why was the prospectus withdrawn?
Furthermore: "The prospectus is a continuation of the property syndication referred to in the prospectus that has been withdrawn." Does that mean that the company was allowed to keep funds being raised earlier with a withdrawn prospectus? If your reply is "yes" do you consider this to be legal in terms of the Companies Act?
According to paragraph 30 on page 29 the following paragraphs (among others) of Schedule 3 of the Companies Act are not applicable: 6 (h) and 26. Why do the Registrar of Companies consider these paragraphs to be "not applicable"? Aren't they vital disclosures?
On page 35 schedules A to P are listed. These schedules does not physically form part of the prospectus (although according to the definition on page 4 it is part of the prospectus) and is "available for inspection at all reasonable times during business hours" at the head office of Sharemax (p. 25). In practicle terms it means that members of the public can't get a copy of schedules A to P. Is the Registrar of Companies satisfied with this arrangement given the fact that many investors are elderly people?
Is there any co-ordination between the Registrar of Companies and the Office of Consumer Protection about disclosure in the prospectus and disclosure in the disclosure document issued in terms of Government Gazette 28690 of 30 March 2006? If so, what is the nature of such co-ordination?
I refer to par. 6 on page 5 of Government Gazette 28690 of 30 March 2006. Have the Minister of Trade and Industry granted any exemption to Sharemax in terms of section 12 (6)(c) of the Consumer Affairs Act? If so, what is the nature of the exemption and on what basis was it granted?
Are you satisfied that the prospectus of Range View Shopping Centre meets the requirements of both Schedule 3 of the Companies Act and Government Gazette 28690 of 30 March 2006?
No easily identifiable separate disclosure document in terms of Government Gazette 28690 of 30 March 2006 has been published by Sharemax on its website. What is your view about this?
Who scrutinizes the disclosure documents in terms of Government Gazette 28690 of 30 March 2006? Are these documents publicly available at the Office of Consumer Protection?
Schedules A to P of the Rangeview prospectus purports to be some of the disclosure required in terms of Government Gazette 28690 of 30 March 2006. Schedules F1 and F2 are merely valuation certificates according to par. 5.4.1 and 5.4.2 on page 11. Does this meet the requirements of par. 6 and 10 of the new disclosure requirements?
C. Sharemax Premium (Pty) Ltd
The document issued by Sharemax is not attached hereto but is available here.
The document speaks for itself.
Although a bank account is opened for the client in his own name the client loses control over that account: See paragraph 3 of the client mandate.
Serious debate and soulsearching should be conducted to establish whether the product is not deposit-taking in nature. Is the bank account opened in the name of the client not merely a ruse to disguise the true nature of the product?
The product should also be viewed on a holistic basis taking among others all the current and historic non-disclosures into account.
Refer back to paragraphs A9-A11 above.
Also take into account current attempts to boost liquidity with sales competitions.
The risk profile of banks are closely monitored by the SA Reserve Bank. The same goes for insurance companies who are regulated by the FSB. Who are doing the same or similar in relation to property syndication schemes?.
Lastly, please consider the two reports of the Nel Commission. There are currently some worrying trends reminding me of the Masterbond days. It calls for immediate action.
The legal minefields surrounding the collapse of property syndication company Sharemax Investments are growing. Sharemax’s attorneys, Weavind & Weavind, and Capicol, the developers of the Zambezi Retail Park and The Villa, have both launched independent defamation and damages cases. A criminal case has been lodged against Weavind & Weavind related to the alleged illegal release of Sharemax investor funds from its trust account before the transfer of properties to the syndication vehicles. A demand for repayment has been issued to Weavind & Weavind on behalf of 11 investors in terms of a section of the Companies Act that is normally a precursor to a liquidation application. Claims have been submitted to the fidelity fund of the Law Society of the Northern Provinces and Attorneys Insurance Indemnity Fund, both also related to the release of funds by Weavind & Weavind. Lurking behind the scenes is the finding by an investigation conducted for the registrar of banks that Sharemax’s funding model contravened the Banks Act. Surely at some stage someone is going to be prosecuted for this contravention” The new board of the Sharemax group of companies also plans 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. However, it has been claimed that this planned offer was seeking to legalise an illegal act and was prejudicial to the rights of “prospective investors”. In fact, doubts have been expressed about whether the Zambezi Retail Park or The Villa schemes had any investors or shareholders because a suspensive condition had not been fulfilled: the transfer of the properties into the syndication vehicle mentioned in the prospectuses for both of these schemes. But can such a scheme of arrangement be applicable to investors and shareholders in the company or only creditors? In terms of a government notice on property syndications, the money deposited by prospective investors into the trust account of Weavind & Weavind must be repaid if the syndication does not proceed. Weavind & Weavind maintains the government prohibition on the release of investor funds for a property syndication prior to the transfer of the property is not applicable to the firm and various clauses in the prospectuses made it “abundantly clear” it was not the intention that investors funds would only be paid out of trust once the property had been transferred. However, the prospectuses also specifically state that investors funds will not be released from its trust account prior to the transfer of the property. What then gives Weavind & Weavind the right to ignore or disregard a mandatory government notice related to property syndications? The share and debenture certificates issued by Sharemax to prospective investors also specifically state that their “investment” would be deposited into Weavind & Weavind’s trust account and “kept there until the investment amount is processed and the property is transferred”. Finally, an arbitration last year concluded Sharemax must pay R64 million, excluding damages, to Capicol. This amount was due for payment by no later than March 7, but the Sharemax board has admitted it is unable to pay it. Does this not mean Sharemax is insolvent? If so, does the rescue plan being hatched by the new Sharemax board mean the company is still trading and the directors of the company could be held liable for reckless trading” It is obvious this saga, involving about 40 000 shareholders who have invested about R4.5 billion in property syndications promoted and marketed by Sharemax, will probably take years to resolve. page 20 The gain in employment that is evident from data releases in the past few quarters is welcome. The modest uptick means there is still a long way to go before the hundreds of thousands of jobs that were lost during the recession are recovered, but it is nevertheless an encouraging start to what is hopefully a sustainable trend. Every bit of good news builds confidence. Since the release of Statistics SA’s Quarterly Labour Force Survey, which showed the unemployment rate in the fourth quarter of last year had fallen to 24 percent from 25.3 percent, and the Quarterly Employment Statistics, which showed 101 000 jobs were created in the formal sector in the fourth quarter following the addition of 23 000 jobs in the third quarter and 46 000 in the second, other data have also reflected gains in employment. The Adcorp employment index for March showed a 5.6 percent gain in employment, and there were gains in all sectors and occupations. But it is disheartening that official statistics show the number of discouraged work-seekers is still rising, by 117 000 people in the fourth quarter, compared with the previous quarter, and by 440 000 compared with a year earlier. There are now well over 2 million discouraged work-seekers, over and above the more than 4 million unemployed. The expanded unemployment rate remains devastatingly high at 35.8 percent. After companies enhanced productivity, cut costs and right-sized to cope with the recession, they will now be cautious in expanding their staff complement. Especially as there are perpetual concerns about the rand, new labour laws and electricity supply constraints, among other things. But even without these concerns greater mechanisation introduced during the recession may mean companies will not need significantly more staff even if the economy starts to really pick up. This of course means that many people, especially those without skills, will remain in desperate circumstances. Edited by Peter DeIonno. With contributions from Roy Cokayne and Samantha Enslin-Payne.