Monday, November 9, 2015
Nova directors pocket R16.7m - SHAREMAX - BULLET IN THE MAIL
Ryk van Niekerk
Nova directors pocket R16.7m - SHAREMAX
" Gross understatement of the funds required to complete The Villa. I saw the statements from the construction company and what is required is well over 2 billion.... "
- by Joe Soap
Sparks fly at Nova AGM
Sharemax heir aims to complete construction of The Villa, Zambezi within three years.
Ryk van Niekerk | 6 November 2015 00:08
Tempers flared at Nova Property Group’s annual general meeting (AGM) between chairman Connie Myburgh and brokers on Wednesday, although it is not clear who provided the spark to ignite the tempers.
Moneyweb was denied access to the AGM, but spoke to many investors and brokers who did attend the meeting and then put questions to Dominique Haese, Nova’s CEO.
The investors Moneyweb spoke to all allege that Myburgh was the aggressor, while Haese said it was actually the brokers who abused and disrupted Myburgh during the official proceedings.
The AGM was attended by only 11 of approximately 33 000 Sharemax investors, who became Nova shareholders and debenture holders through the various schemes of arrangement set up to save their Sharemax investments.
Haese stated that there are 1 200 Nova shareholders who converted their debentures into Nova shares.
A handful of brokers also attended.
Brokers and bullets
According to some of the investors and brokers, the sparks began to fly when two brokers put questions to Myburgh and Hease.
According to Jan Labuschagne of JL Brokers, Myburgh’s manner was aggressive, particularly when addressing the brokers who were in attendance. “After a broker asked a fair question in a civilised manner, Myburgh started using crude language. He said that he hated brokers. I also got the impression that they were trying to hide facts. They didn’t want reveal the identity of the holders of the shares with voting rights.”
Haese strongly denied that Myburgh used crude language and said he hated brokers. She stated that he said he “disliked” brokers.
“Three brokers behaved with the utmost disrespect toward Mr Myburgh and others in the meeting. Mr Myburgh on numerous occasions requested the brokers to please refrain from such disruption.”
She said one broker stood up during the meeting and approached Myburgh. “The same broker threw a middle finger at Mr Myburgh in front of many people, on leaving the venue after the meeting.”
Bullet in the mail
During the presentation Myburgh also said he felt threatened and referred to an incident where he received a bullet in the mail, delivered to the Nova office. Haese said this happened in 2012 and also stated that all directors had received numerous death threats.
Labuschagne was also unhappy with the communication of the AGM to investors. “None of my clients were informed of the AGM and I only became aware of the event through the media. This was despite Corrie van Rooyen (of Frontier Investments) stating at the AGM that registered letters were sent to all investors.”
Haese also denied this and confirmed that documents were either e-mailed or sent via registered mail.
One attendee confirmed to Moneyweb that he had received an emailed notification of the AGM.
Completion of The Villa and Zambezi
The attendees recounted that during the operational update, Myburgh and operational director Dirk Koekemoer said the aim was to complete the construction of The Villa Retail Park and the Zambezi Mall within three years, if it was able to obtain finance.
In the company’s annual financial statements the board estimates that it would cost about R740 million to complete the Villa. However, there remains a legal dispute with Capicol.
Haese said that the board anticipates that it would take 24 months to complete Phase 1 of the Villa Centre once restarted.
Regarding the Zambezi Mall, Haese said it would cost about R40 million to complete the Moloto Road upgrade, which would enable access from the Moloto Road and attract new tenants.
Koekemoer also said that progress was being made at the Zambezi residential development and that bulk services were being installed for almost 1 000 houses to be built at the rear of the development, which would also be positive for the mall.
Myburgh added that the board planned the construction of residential units at the Flora Centre in Roodepoort and that the media had painted an unfair picture about the centre.
In her response to questions, Haese says the lettable area has recently increased from 18 000m² to 24 000m² and confirmed the additional residential development of 27 500m² as residential flats. An Absa branch is set to open its doors before the end of the year and a gym before the end of 2016.
All eight normal and four special resolutions were approved swiftly by proxy votes, apparently representing 100% of the shares with voting rights. According to attendees Myburgh said he held 100% of the proxies, which Haese confirmed.
Investors, who were issued with shares, or those who converted debentures to shares, were not able to vote, as they received ordinary D shares. These shares do not have voting rights. Moneyweb took Nova to court after Nova and other subsidiaries denied Moneyweb access to the shareholder registers.
Haese did not want comment on this as it was sub judice.
The special resolutions regarding the directors’ remuneration included the approval of the R16.7 million remuneration the four directors received in the 2015 financial year and that this remuneration be increased by a maximum of 10% in the current 2016 financial year.
According to the published annual financial statements of the past few years, the four directors earned nearly R47 million. This is the sum of the R12.6 million in 2013, R17.1 million in 2014 and R16.7 million in 2015.
Haese denied this and said the directors did not receive these amounts in full. “Only the remuneration portion for services rendered as directors were received, the rest of the figures disclosed on the AFS (annual financial statements) are bonus provisions, these have not been paid to directors, as the board’s policy is to ensure the successful repayment to debenture holders prior to any payment of bonuses provided.”
She added that in 2013 the directors earned R8.2 million, R12.2 million in 2014 and R11.6 million in 2015.
At the AGM Haese justified the directors’ remuneration, stating that the directors were working extremely hard for all stakeholders of the group and that what they earned was in line with industry norms.
In the response to questions Haese also stated that Nova applies King III, which states that “levels of remuneration payable to directors need to comply in order to not only attract but to also keep motivated and to retain such relevant qualified directors”