Friday, December 9, 2016

Legal battles involving Sharemax far from over - BUSINESS WATCH

Legal battles involving Sharemax far from over BUSINESS WATCH
/ 13 April 2011, 09:03am

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
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Unemployment

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.

4 comments:

  1. The Attorneys....LSNP " Brothers in Arms " President Ronald Bobroff, at the time, sat on the council of the Law Society of the Northern Provinces (LSNP) and was later its President. It was during his tenure that the LSNP Council decided to allow its members to act outside of the law and sign up RAF claimants using what was called a Common Law Contingency Fee Agreement (CLCFA).

    Question ? At The same time "...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! What was the outcome of this case.Check who was serving on the LSNP Board of Directors at the same time as Criminal and former President of the LSNP Ronald Bobroff?You may find the answer there.

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  2. The Communist element infiltrated SHAREMAX AS THEY INFILTRATED ALL BANKS AND THE TREASURY IN SOUTH AFRICA......
    .......ALL WITH THE AID OF TRAITOR F W DE KLERK AND HIS CRONIES..........

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  3. Die NPA bekik nie oor die nodige kennis en dryfkrag om hierdie kriminele aan te vat nie. Die advokate en prokureurs beskerm mekaar .Die wiel sal stadig maar seker draai .

    ReplyDelete

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