Sunday, December 11, 2011
Mnr. Willie Botha, voormalige Sharemax-grootbaas. Beleggers wil hê sy geldsake moet ondersoek word.
Vic de Klerk
Sharemax malls may be saved
More woes for investors
Panic over another property scheme
New hope for some Sharemax investors
New plan punted to save Sharemax
Europese krisis woed voort
Des 11 2011 08:25
Die Europese Unie het Vrydag waarskynlik verseker dat ’n skuldkrisis nie weer die eurogebied sal tref nie, maar die huidige krisis vererger steeds.
The two main shareholders of Sharemax Investments – Willie Botha and André Brand – will receive R40m in exchange for their so-called claims against the Sharemax promoted property syndications in terms of the proposed scheme of arrangement for Zambezi Holdings. Of that, R15m is payable in cash and R25m in five yearly payments of R5m each. In exchange, Botha and Brand accept apparent responsibility for outstanding VAT payments that could amount to as much as R50m.
However, the cause and auditing of the amounts owed in VAT aren’t explained anywhere in the documents submitted to the High Court. Businessmen will know VAT returns must usually be submitted every two months. Postponement and paying off over five years sounds very unusual. Businessmen will also know that being even a few days overdue attracts considerable penalties. Hopefully, the board of the property syndications will be able to explain the payment to Brand and Botha and the outstanding VAT more fully to investors at shareholders’ meetings over the next few months.
For the financial advisers who sold Sharemax investments to their clients and who were concerned about the capital losses – especially in the case of liquidation – there’s also very good news in the proposed scheme of arrangement. In the case of Zambezi, investors will receive a new “debenture” with a face value exactly equal to their original investment. Therefore: no capital loss. The capital and the debenture will be repaid from the 70% of the net rental income earned by the Zambezi Mall over the next 10 years, which could be extended to 12 years. That could be any amount – because the days of miracles aren’t yet over.
Investors – as well as the ombudsman, who is already looking at the financial advisers – will therefore only know in 12 years’ time whether the investors have suffered a capital loss or not. This is a wonderful escape for the financial advisers and explains why they’re so supportive of the scheme on their blogs.
From year 12 to year 17 the investors will receive 30% of the net rental income, up to a maximum of 30% of their original investment. That’s probably interest, or perhaps capital gain.
So it’s possible that investors may still be receiving an interest cheque 17 years after the introduction of the scheme. Once again, that’s very good news for the financial advisers. Briefly, it means no investor will be able to prove he suffered a capital or interest loss before 17 years have elapsed and can therefore not institute a claim against his financial adviser. The ombudsman will also find it difficult to prove damages before the end of 17 years.
I’m sorry to say that for investors in the Zambezi scheme there’s only bad news. In his submission to the court, Rudolf Badenhorst, one of the new directors of the Sharemax-promoted investment, pointed out the best net price that could probably be obtained for Zambezi Mall in the case of a liquidation would be only about R100m, which is about 13c in the rand for each of the investors who pumped a total of R765m into the building. But that’s actually more than Finweek expected.
However, nobody is trying to put a value on the new debentures to be issued, simply because it’s impossible to do so. To calculate the net current value of an investment or debenture that can be compared with the 13c in the rand above, we must do an accurate calculation of the monthly or annual payments the debenture holders will receive: which is 70% of the net rental income earned by the building. The building is managed by its owners, Capicol, and the investors will apparently have no say in how the building is run or what its net income will be.
If you look at the current poor state of disrepair and the building’s significant vacancy factor – plus the new interest burden of the probably R10m or more the building will have to carry in future – the informed investor would no doubt guess its net income will be very small, if anything at all. Remember: 70% of nothing is still nothing.
After 12 years an investor’s rights lapse. And if 70% of nothing is still nothing, the debenture won’t be worth anything. The face value of R1 for every rand invested says nothing. The value of the debentures on an informal market – they won’t be listed on the JSE – is what counts here. I’d like to repeat my prediction of two weeks ago: the market value of the Article 311 debentures will probably not be more than 5c in the rand. Not 5c/year, as some readers seem to think, but a one-off 5c for your R1 investment if you were to sell. And if an investor were to sell it for 5c – assuming he could find anyone wanting to buy it – he’d presumably no longer have any claim for damages against his financial adviser. It could simply be argued the 70% of the net rental in nine years will be enough to repay your total investment and you would find it difficult to prove the opposite.
Investors in Zambezi will have to make up their minds at the meetings whether they want to accept the 13c in the rand that could possibly be obtained in the case of liquidation or whether they want to take a chance on a debenture with a completely unknown market value.
Related to above story...Latest ( Rapport)
Sharemax-beleggers sê: ‘Likwideer!’
Mnr. Willie Botha, voormalige Sharemax-grootbaas. Beleggers wil hê sy geldsake moet ondersoek word.
Foto's · Lesersfoto’s · Nuus in Foto's
Stuur vir ons jou foto's · Stuur vir ons jou foto's
HERMAN SCHOLTZ IN PRETORIA
Sommige beleggers in Sharemax ruik bloed oor die “weelderige leefstyl” van Sharemax-base en het ’n likwidasie-aansoek ingehandig wat reddingsplanne in die wiele kan ry.
Ingevolge die Bankwet kan ’n maatskappy nie hof toe gesleep word terwyl die Reserwebank se opdragte nog geld en inspekteurs nog werksaam is nie.
Maar mee. Cornelia Raath Lotter en Louna Marx sê in hul aansoek, wat by die hooggeregshof in Pretoria ingedien is, dié verbod is nie absoluut nie.
Hulle wil toestemming hê vir regstappe teen Sharemax Investments.
Lotter en Marx het onderskeidelik R1,3 miljoen en R50 000 in The Villa, ’n onvoltooide ontwikkeling oos van Pretoria , belê.
Tesame met dié aansoek het Lotter en Marx ’n aansoek om die likwidasie van Sharemax ingedien.
’n Reëlingskema ingevolge die Maatskappywet is tans aan die gang.
Die applikante is allermins tevrede met die voorwaardes van die voorgestelde reëlingskema.
Hulle sê in hofstukke die skema kan, selfs as dit deur die hof goedgekeur word, nie ’n blywende oplossing wees nie omdat alle beleggers wat deur verskillende pro-spektusse in die eiendom belê het, nie eers genader is nie.
Dit sal in elk geval steeds ’n risiko vir beleggers inhou wat minstens tien jaar moet wag om moontlik hul geld terug te kry, sê hulle.
Volgens die applikante bied die likwidasie van Sharemax die beste moontlike kans aan beleggers om binne ’n redelike tyd hul geld terug te kry.
Sharemax het nie noemenswaardige bates nie en kan nie die beleggers terugbetaal soos die Reserwebank vroeër gelas het nie, lui die hofstukke.
Likwidasie-prosesse sal egter skuldeisers in staat stel om te kyk waarheen die geld gevloei het en of dit op so ’n manier teruggekry kan word.
Lotter en Marx het veral ’n appeltjie te skil met mnr. Willie Botha, voormalige besturende direkteur, en mnr. André Brand, ’n huidige direkteur, van Sharemax.
Luidens die hofstukke besit Botha ’n luukse boot wat tot R150 miljoen werd kan wees, asook ’n wildplaas.
Brand besit glo ook ’n wildplaas wat tot R80?miljoen werd kan wees.
“Ek huiwer nie om te sê die winste (uit Sharemax) is verdien tot die nadeel van beleggers in die verskillende sindikasieskemas nie,” sê Marx.
Boonop lyk dit vir die applikante asof Brand en Botha nóg etlike miljoene kan verdien uit die reëling- skema.
Dit is vir hulle ’n angswekkende gedagte, lui die hofstukke.
“Daar is geen geldige rede waarom (Sharemax se) direkteure... toegelaat behoort te word om hul luukse leefstyle voort te sit terwyl die beleggers in hul skemas geldelik sukkel nie.”
Mnr. Ruann Kruger, die applikante se prokureur, het by navraag gesê hy weet van ander beleggers wat ook likwidasie-aansoeke voorberei.
“Die artikel 311-kompromis kan nooit slaag nie omdat daar steeds nie met skuldeisers oop kaarte gespeel word nie. Dit lyk vir my asof daar ’n poging is om met dié kompromis ’n onwettige beleggingskema wettig te laat lyk.”
Die respondente – Sharemax, die ondersoekers van die Reserwebank en die registrateur van banke – moet nog op die aansoeke reageer.( Rapport)
The luxurious lives of Sharemax bosses
Galleries · User Galleries · News in Pictures
Send us your pictures · Send us your stories
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