Sharemax investors accept new scheme

Sharemax investors accept new scheme
12 December | 05:00
By Roy Cokayne
Roy Cokayne


Investors in schemes promoted by the troubled Sharemax group have voted overwhelmingly in favour of a proposed scheme of arrangement, a move seen by some experts as a ploy by the company’s financial advisers to avoid a liquidation inquiry.

The process has also been criticised for restricting access to the terms of the planned scheme of arrangement to only shareholders and creditors and their financial advisers.

Brenthurst Wealth Management investment strategist and director Magnus Heystek said the same financial advisers who placed the investments of investors into Sharemax schemes had advised the mostly elderly and ill-informed investors how to vote at the scheme of arrangement meetings.

“How can that be? It’s a circus. Why is the scheme circular not available? It’s all part of a massive cover-up to hush up the biggest fraud in South Africa’s history,” he said.

“By voting for the scheme, investors will exchange their current investments and claims for worthless pieces of paper, allowing the perpetrators to get off scot free and walk away as there will be no liquidation inquiry,” he said.

About 40 000 investors have invested about R4.5 billion in the various schemes promoted by Sharemax, which collapsed in August last year. This was after an investigation by the registrar of banks found its funding model contravened the Banks Act, leading to investments drying up.

It was subsequently placed under statutory management by the registrar of banks with the managers given a mandate to manage the repayment of funds obtained by Sharemax in contravention of the Banks Act or to seek legal alternatives.

Frontier Asset Management managing and financial director Dominique Haese said the decision to limit access to the circular was taken by the new Sharemax board because “they were personalised documents” and it was being circulated in terms of the court order it had obtained for the scheme.

Haese said all the documentation related to the scheme of arrangement was available on Frontier Asset Management’s webpage and anyone who had the client number of an investor could gain access to it.

Frontier Asset Management, comprising former management and employees of Sharemax, is responsible for the day-to-day administration and management of the properties in the schemes marketed and promoted by the Sharemax group. This function was transferred to Frontier after Sharemax Investments and property investment firms syndicated by Sharemax were placed under statutory management.

Meetings took place over the past two weeks to allow creditors and shareholders to vote on the scheme of arrangement, and it is believed a high court hearing this week will take place with a view to sanctioning and approving the scheme of arrangement.

The response of eligible voters at the scheme meetings had been “overwhelmingly positive”, Haese said.

Interim results indicated between 25 percent and 30 percent of the about 29 000 creditors and investors had voted, with 99.95 percent of votes received in person or by proxy in favour of the scheme of arrangement, she said.

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Did Sharemax silence Deon Basson?

There's a great tribute to Deon Basson by top financial journalist Bruce Cameron in which he talks about Basson's investigation of Sharemax saying: "In my view, the Sharemax court action was pure intimidation. Personal Finance also took a close look at Sharemax at about the same time as Deon and came to much the same conclusions, which we published. The articles are on our website: www.persfin.co.za. We have yet to be sued by Sharemax.

For the past few years Deon devoted his time and limited resources to fighting Sharemax. He started writing a book called Public Interest Warriors about the saga, and recently published the first couple of chapters online, on his website www.deonbasson.co.za

You should read what he had to say, particularly if you are contemplating investing in any property syndication scheme.

Sharemax again retaliated with court action, attempting to block publication of the book.

I wouldn't be surprised if the stress of all this contributed to his death."

You can read all about Deon Basson's investigation of Sharemax here, while Moneyweb covered Sharemax's attempts to block the publishing of this book at length.

Speaking to journalists this week about Basson's death I got the distinct impression that many feel a great deal of anger towards Sharemax. This because of how Sharemax sought to muzzle Basson, the vitipuritive nature of their legal attack and because they singled out Basson in his private capacity. Most feel that the stress of dealing with Sharemax was a contributing factor to Basson's death.

Posted at 08:14 | Permalink | Comments
20 September 2008
He is dead
Stop all the clocks, cut off the telephone,
Prevent the dog from barking with a juicy bone,
Silence the pianos and with muffled drum
Bring out the coffin, let the mourners come.

Let aeroplanes circle moaning overhead
Scribbling on the sky the message He Is Dead,
- Funeral Blues, W. H. Auden (1936)

I was lucky enough to spend time with some great writers this week, including Sue Grant Marshall, Gus Silber and Denis Beckett. One of the things we talked about was the passing of Deon Basson. Silber made a telling comment when he said that Basson's death was symbolic of the demise of investigative journalism in South Africa.

Moneyweb's Alec Hogg wrote a brilliant tribute to Basson, which is poignant particularly given that Basson had largely finished his book "Public Interest Warriors" and was planing to return to journalism.

Although I never knew him well, I was highly honoured to have spent time with Basson before his death. We had some email interchanges on the Naspers/Mugabe story, and met for lunch during which we talked about investigative journalism. I had deep respected for Basson, and followed his career and writing over an extended period so it was a great priviledge for me to meet him and talk about his career and life. Part of our discussion was recorded and was transcribed for Moneyweb, then there are a few video interviews with him on Zoopy.

Is this the symbolic death of investigative journalism? Fortunately investigative journalism is alive and well in our country at a time when it is most needed. However forensic journalism has suffered a huge loss.

Basson was unique in that he was a forensic business journalist with significant depth and huge experience which shows in his reporting on corruption and greed. He was relentless in his investigation and unafraid to uncover corporate rot. As such he often went where few journalists were prepared or dared to go. This is well explored in Reg Rumney's Thought Leader piece "In memory of Deon Basson, a great forensic business journalist."

Empassioned by the public interest, Basson's book will be an living tribute for his life's work, for Basson was South Africa's Public Interest Warrior. Peerless and fearless, he sacrificed much and fought for truth and justice to the end. I doubt if our country will see the likes of him again.