Tuesday, January 31, 2012

RESTRUCTURED SHAREMAX GROUP




RESTRUCTURED SHAREMAX GROUP
UPDATE COMMUNICATION
31 January 2012
The Boards of Directors (“Boards”) of the Restructured Sharemax Group report as follows.
SCHEMES OF ARRANGEMENT PROCESSES
1. The Boards are pleased to announce that the High Court has sanctioned all the
Schemes of Arrangement in respect of the Zambezi Companies, the Villa Companies
and the Income Plan Companies, as proposed during November 2011 to relevant
scheme creditors and scheme shareholders.
2. The relevant Court Orders sanctioning the Schemes have been registered with the
Companies and Intellectual Property Commission in accordance with the provisions of
the Companies Act.
3. During December 2011 the Scheme in respect of the Growth Plan Companies, as
proposed during November 2011 to relevant scheme creditors and scheme
shareholders, was approved and adopted in accordance with the provisions of the
Companies Act.
4. As provided for in the Schemes, the Registrar of Banks has, in terms of the Banks Act,
formally withdrawn all the Directives which pertained to the repayment of funds, which
were issued during September 2010, in respect of Sharemax Investments (Pty)
Limited, all the Sharemax Syndication Companies and the Individuals against whom
such Directives were issued.
5. Following the aforesaid, all four Schemes have become unconditional with effect from
20 January 2012.
6. The unfortunate delay in obtaining sanctioning of the Zambezi, Villa and Income Plan
Companies’ Schemes is regretted. This was caused by the actions of parties who
attempted to intervene in the sanctioning process of those Schemes, under
circumstances beyond the control of the Boards. These parties withdrew their
intervening actions. Save for additional legal costs to the Sharemax Syndication
Companies in opposing the attempted intervention, the delay did not result in any
losses or further costs to the Sharemax Syndication Companies or Investors.
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7. Attention is drawn to the fact that the Directives and their effect had, since October
2010, been under formal judicial Review, up to the date of the withdrawal of the
Directives as aforesaid.
8. The Boards are satisfied that no relevant transgression of the Banks Act exists in
respect of the Restructured Sharemax Group which may negatively, or at all, impact
on the continuing affairs and/or the assets of the Restructured Group.
9. The Boards are furthermore satisfied that there exists no illegality in the Restructured
Group that could affect the affairs of the Restructured Group or the restructured
interests of Investors going forward.
10. The Boards thank the thousands of Investors who voted in such overwhelming
numbers in favour of acceptance and approval of the Schemes. In excess of 99,5%,
both in number and in value, voted in favour of the Schemes, to the best benefit of all
34,000 Investors.
11. The Boards have commenced implementing the Schemes and the successful
restructuring of the historical Sharemax Syndication Companies group, resulting from
the successful Schemes of Arrangement processes.
12. The historical Sharemax Syndication Companies group is now part of an unfortunate
chapter in history.
13. The Boards and Investors can now look to the future and the enhancing of the affairs
and value of the Restructured Group and the assets in which Investors had historically
invested, and now remain with their restructured interests.
14. The Boards will do all in their power to add and unlock value in the best interests of
Investors, not only in terms of monthly income, but also in terms of the maximum
capital repayment as envisaged in the Scheme Circulars.
15. Business is continuing in the ordinary course, without risk of interference from third
parties with agenda’s pertaining to profiteering from actions aimed at unwarranted
and unfounded liquidation, judicial management or similar processes, which actions
caused immense hardship and contributed to the loss of value of the historical
Sharemax portfolio.
16. The Boards have embarked upon the procuring of short and long term funding in
order to, inter alia, upgrade various of the shopping centres within the Restructured
Group and as priorities, to complete the road works at the Zambezi Mall, complete
current upgrading activities and procure optimal tenanting in all centres.
17. The Boards are also in discussion with various parties in regard to furthering the Villa
Mall project as soon as practicably possible.
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18. The Receivers for scheme creditors and scheme shareholders having been appointed
in terms of the Schemes, have commenced the preparation of Debenture Certificates
to be dispatched in due course to Investors, in terms of the provisions of the Schemes.
19. The Boards emphasise that no basis or need exists for any judicial or statutory
sanction or supervision of any kind in respect of the management or affairs of the
Restructured Group, and that all affairs of the Restructured Group are under the
control of the Boards, working in conjunction with the Receivers to the extent
necessary as per the relevant provisions of the Schemes.
20. The Boards thank the South African Reserve Bank for the opportunity afforded to the
Boards to procure the restructuring of the affairs of the historical Sharemax
Syndication Companies group, as successfully as such restructuring has been
achieved, resulting in the Restructured Group.
21. The Boards furthermore thank all the Advisors for their valued assistance during the
process of restructuring.
FURTHER PROGRESS
Further and regular progress reports and updates will follow with information on specific
properties, their upgrades and development, as soon as practicably possible.
Please note that this information will be available on the Frontier website
www.frontieram.co.za. You are welcome to visit this website for regular updates and
background information.
Investors will be informed directly via sms of any communication placed onto the web.
Please also note that only this website, sms’s, telephonic and personal communication,
including emails and letters, directly to and from Investors, will in future be the official
medium of communication utilised and acknowledged by the Restructured Group.
Queries may be directly addressed by contacting the Frontier Client Services at 0860 77 77
22 or emailing admin@frontieram.co.za.
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A plea for a proper investigation into the debacle.
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ALEC HOGG: Well, Chris de Beer has got a similar case that he's digging into. He's a lawyer at De Beer Janse v Vuuren & De Wet. Chris, you've taken a particular interest in Sharemax. We'll get on to that in a moment, but why? What stimulated you to be interested in this whole saga?

CHRIS DE BEER: Hi Alec. Ja, we are acting on behalf of investors in some of the syndication companies and we had a proper look. We've been investigating the scheme for a while now, and ... down to the fact that in our papers we basically state in 700 pages what we believe the state of affairs is. Certainly some of the syndications are doing much better than the others, but the application is brought with a view of ultimately ensuring protection of investors and the public.

ALEC HOGG: You mention an application. You too are going to the courts to try and resolve an issue that you feel is problematic with those who are currently running the Sharemax portfolios. Why are you concerned that they aren't doing a good job?

CHRIS DE BEER: As far as "basically concerned that they are not doing a good job", I think the concern is more regarding the powers that are divested to the statutory managers. They are appointed in terms of the Banks Act, and they've got ... limited powers, whereas if you apply for a judicial manager they've got far more powers than the statutory manager, and they can do proper investigations into financial affairs. They can deal properly with any irregularities if there should have been any. They can better ensure the protection of investors.

ALEC HOGG: You say that you are representing investors. How many investors are those, Chris?

CHRIS DE BEER: Well, it's a group of investors. You've got people putting a lot of money in...

ALEC HOGG: So it's a lot.

CHRIS DE BEER: Pensioners as well. One of my clients put R10m in one of these syndications.

ALEC HOGG: What possessed him to do that? R10m in a Sharemax syndication?

CHRIS DE BEER: It's a lot of money into what was sold as being a good property investment.

ALEC HOGG: So he bought the story, he gave some broker, what, probably R3m in commission, and he's now struggling to get his money back, or at least to get some of it back?

CHRIS DE BEER: You see, that's the reason I say, Alec, there should be proper investigation into this. We don't want to be responsible with statements we make. The bottom line is that we see that some of the properties, specifically the latest ones, are grossly overvalued. And we can't see how with limited powers any statutory manager can properly protect investors and the public. If you have a look at the profile of the investors, I mean, it's old people, it's basically a mix. But ja, it should be a very responsible approach, and that's why we also try to ensure continuity by requesting the court to appoint the statutory managers as the co-judicial managers.

ALEC HOGG: So you want judicial managers. In South Africa's history, though, the past 27 years, only one property has come out of judicial management. All the others have actually gone bust. Is that not something that might happen here - that you then get the liquidators getting their hands on Sharemax, and heaven knows if anything's going to come out after that's happened.

CHRIS DE BEER: What I can tell you about that, Alec, is that at this stage we are approaching the court to get the permission in terms of the appointment of the statutory managers to bring judicial management applications in respect of seven of the syndication schemes. I think the two most problematic schemes are the Zambezi Retail Park and The Villa Retail Park. We are basically bringing two judicial management applications for Zambezi and for Villa.

ALEC HOGG: Those are the two biggest ones, are they?

CHRIS DE BEER: Yes. The two biggest ones, the two latest ones and also the ones with the biggest problems, looking at values.

ALEC HOGG: Chris, just on a broader sense, you say you put together 700 pages for the courts. Is there stuff that's come out in your investigation that we haven't seen yet from Sharemax?

CHRIS DE BEER: Alec, I can tell you this much. The papers are available from tomorrow at 10 o'clock, on an internet website. It's a link that you can find on the internet site. It's a public document, so anybody who wants to read it can go and read it there.

ALEC HOGG: How bad were these guys - Mr Willie Botha and his team, his cohorts?

CHRIS DE BEER: Well, I think it's for the reader to decide. At this stage we are strongly of the view that there should be further investigation into the affairs of the group. I think it's quite clear that there have been irregularities, otherwise there wouldn't have been statutory managers. But ja, I think specifically if you look at the way that they conducted loans between the companies - I think that's something that needs to be attended to.

ALEC HOGG: Chris, just finally - did you track down any assets abroad, overseas?

CHRIS DE BEER: Well, at this stage we haven't really had the opportunity to do that, but that's something that a judicial manager will probably have a proper look at, and we'll investigate that as we go further.

ALEC HOGG: Chris de Beer is a lawyer at De Beer Janse v Vuuren & De Wet, and he's done some serious investigation, as you heard, into Sharemax. We will be posting that link onto Moneyweb tomorrow. You can go and read the 700 pages and make up your own mind.
( Money Web)
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Special Report Podcast: Niki Vontas – CEO, Bonatla

Niki Vontas cries foul says communication process to shareholders is flawed.
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ALEC HOGG: It’s Tuesday December 13 2011 and in this Boardroom Talk special podcast, Niki Vontas, chief executive of Bonatla Property, joins us now. Niki, good to have you on the programme, there’s been big developments in the Sharemax saga. From your perspective though, you did propose a rescue scheme and walked away, why? What was the background to that?

NIKI VONTAS: I put together a proposal that was originally accepted by the directors of Sharemax and they circulate it to the constituencies. Unfortunately, if you remember, there were a lot of public debates and public analysis in the Financial Mail or the Finance Week in which I commented and obviously I commented on controversial findings of my due diligence and they invoked this disclosures to the press for canceling the transaction summarily for disclosure of, for a breach of non-disclosure, which I find very funny because the press knew almost as much I knew already.

ALEC HOGG: So, you didn’t really walk away it was more a question of being kicked out.

NIKI VONTAS: I need to tell you I still haven’t walked away, there could be still some surprises but I cannot comment on that yet.

ALEC HOGG: But at the moment shareholders or investors, 35 000 of them, at Sharemax have actually voted in favour of a rescue scheme that’s being decided on right now. You don’t think it’s such a good idea?

NIKI VONTAS: Well, first obviously I wouldn’t like to comment on the process but from the little I’ve seen, if you visit the Sharemax website you’ll see that there’s less than 200 people visiting that website a day, there’s very little visits. What you find generally speaking in this doomed [UNCLEAR] syndication schemes like Bluezone that we salvaged or Sharemax or [UNCLEAR] or Realcor, you’ll find that the investors are generally older investors, generally Afrikaans, they haven’t got an email address, they haven’t got proper communication skills and they really rely on [UNCLEAR] communication to get decisions or information passed onto them. So, what I dispute really is that the process is completely flawed. I don’t believe that proper documentation has been circulated to investors to allow them whether or not they will get the investment of such a long period as [UNCLEAR] ten years and what Magnus Heystek, in fact, commented on the Business Report is absolutely right. It’s a total circus.

ALEC HOGG: It’s a circus you say?

NIKI VONTAS: It’s a total circus…[UNCLEAR] a total circus because if you want to put a proposal to 30 000 or 40 000 people on most probably the biggest failure in physical property in South Africa, you at least make the owner of at least the proper analysis of the merit or the pitfalls, you give feasibilities, you give time value of money, your present value, the returns over such a long period. You give them some form of information to ponder about and you don’t give them such a short time basically. Basically to me it’s a little bit of a hit and run operation that’s basically the way I consider it.

ALEC HOGG: From a business perspective though, can this rescue plan that has been proposed work?

NIKI VONTAS: I don’t think so. You’ll find that the Sharemax [UNCLEAR] is not finished, you’ll find some further applications for liquidations, further litigation. Obviously by now the investors are desperate and therefore they are going to consider anything but I still believe that in property there is always a solution. Sometimes if the difficulties are extreme, like in Sharemax, the solutions are more extreme but I still believe its investors deserve proper information in order to make a proper decision. They should, I think…if you want to talk to shareholders you can work like in the old Company Act, [UNCLEAR] to get special resolutions, you conduct meetings, you’ve got quorums and things like that. I haven’t seen anything of that sort. It looks like a bosberaad and the next day you basically announce a 99.9% approval. Last time I’ve seen that it was 1938 and 1939 in Hitler’s referendum. So, my feeling, you need to apply corporate governance, the new companies act, you need to apply proper process to give the time and information to investors to decide whether or not these solutions be good for them an what applies for them, applies for anybody. If I do that transaction, they should also call special meetings and give information and give analysis and ask the press to comment. This thing is a little bit of an occult operation.

ALEC HOGG: Do you know Connie Myburgh, the lawyer who’s behind this rescue scheme?

NIKI VONTAS: Yes, I’ve heard about him, yes.

ALEC HOGG: I believe our investigation journalist, Julius Cobbett, says that he was one of those who vigorously defended the Garek disaster. Lots of people lost much money there as well. What is his motive in this? Are you saying that his motive perhaps is questionable?

NIKI VONTAS: I believe Mr. Myburgh was involved also, if I remember, with Colin Barnard and the fiasco on the Melrose Arch deal with the mine pension fund in 2004, on which I think the late Ian Fife put some very nice article on them, so there must be a bibliography on the SM available if [UNCLEAR]

ALEC HOGG: So, if the courts are to sanction this, would you then try to go to court to get it reversed?

NIKI VONTAS: No, we’ve got other things pending but I cannot believe a court, looking at the way this process was handled, is going to sanction it. I don’t believe a proper judge is going to sanction a process like that. It’s the biggest failure in property in South Africa with 40 000 or 45 000 victims that are asked to give the money over and most of them, I can guarantee you, will be dead before the last payment because they are generally - the syndication investors in all these schemes – are generally retired people, who unfortunately invested their life savings in a property investment with obviously a property and a financial risk and therefore they lost their investment and now ask to receive the return on the investment through their estates because a lot of them won’t survive that [UNCLEAR], I can tell you that.

ALEC HOGG: Niki, outside of Sharemax there’s another controversial property issue going on at the moment, where the shareholders in a company called Accentuate or 26% shareholders there are tackling the management on a lease that was signed by the management before the property was sold. Do you have any insight into this?

NIKI VONTAS: Well, no, I’m quite aware of that transaction, all I can comment from what I…and I pursued it over the last year as well, all I can comment is that first if you as a director are involved in a property company and you’re obviously a director of the operating company, which is listed on the AltX I think, you should technically, if you sell that property company or the property you should have a related party circular, whereby you recuse yourself from any voting on your shares and you allow your shareholders to decide if this deal is good or bad for the company. I don’t think this process was followed and the other comment that I have is that if you do a leaseback, industrial leaseback, traditionally the operating company sells its property by signing a lease and obviously receives the proceeds from the sale of the property. In this case the property went into a ten year onerous lease but without receiving any proceeds from any sale. The proceeds of the sale went obviously to the shareholders of the property company or the directors, I suppose, and therefore there’s no merit whatsoever. If I was in the property company I would have only signed a three or four year lease or five year lease because it doesn’t help you to be on the [UNCLEAR] for ten years for the benefit of somebody else who’s unrelated to your operations.

ALEC HOGG: You call it an onerous lease, is it above market rates?

NIKI VONTAS: It is, I would say it is. There is obviously, although it’s an industrial area, they could argue that the ratio of non-industrial space to office space is not the same because traditionally in industrial property you find that 80% of your space is industrial and perhaps 15% to 20% of the gross lettable area is offices, in this Steeledale property you’ll find the ratio of office is higher but still I believe Steeledale is Steeledale, it’s not a prime area anymore. It used to be a good industrial area in the olden days of apartheid but for the new change of…since 1994 a lot of the old industrial areas, which are very largely your areas in the south were generally created to separate the white townships from the black townships. Now it’s not anymore the case. Your new industrial areas are created just for the economic value, not anymore for a demarcation between racial groups. I think all the…I visited, in fact, two or three of these industrial areas like Troyeville and Booysens, all these areas are basically declining quite substantially at the present moment because there’s an exodus of these industrial tenants towards your Lindor Parks [UNCLEAR], your Medowdale, all your new generation industrial townships.

ALEC HOGG: How did you get involved in investigating the Accentuate deal?

NIKI VONTAS: I put an offer two years ago, I put an offer last year, which obviously didn’t succeed.

ALEC HOGG: Because you were…for what reason?

NIKI VONTAS: Well, I was not satisfied with the transaction.

ALEC HOGG: Oh I see, so you actually had the opportunity to see the transaction and you felt that it wasn’t fair?

NIKI VONTAS: Well, I’ll tell you want makes me nervous. In a similar transaction what you should do technically if you want to be really fair the director should engage with the company in which they’re also directors, I suppose, the listed company, and say, listen guys we want to get out of this property transaction, we want to sell back the property to Accentuate, so the tenants must buy the property at a market related price so there’s no conflict of interest. So, suddenly now Accentuate is the owner of the property company, okay at a market related value, so the directors obviously take the proceeds, cash the proceeds. But now Accentuate at least can sign the ten year lease after having received its proceeds from the sale. So, the correct way to do it would be to sell back the property to Accentuate and allow Accentuate to do the ten year lease with the new buyer. That would have been much more fair.

ALEC HOGG: What would the difference in value be for this property without a ten year lease and with a ten year lease?

NIKI VONTAS: Well, what counts is not the length of the lease, it’s the confident of the tenant. [UNCLEAR]. My argument is that your lease is first as good as the tenant, the property is really a pretext. In property investment you could have a big tent in the Kalahari desert with Microsoft as a ten year tenant, it’s better to have that and have the cash flow than having a beautiful marble building in Steeledale with Accentuate as a tenant for ten years.

ALEC HOGG: So, in other words it’s the ten year lease that’s the important part here. What would that be worth on this…?

NIKI VONTAS: What counts is the discounted cash flow of this lease, basically it’s all the ten year income streams, which your present value at a discount rate, which is your [UNCLEAR] rate, which takes into consideration the risk free, let’s say the total return from the bond market, which is a risk free rate, plus a little risk premium attached to the risk of this property, its location, its age, the Accentuate financial covenant. So you could discount anywhere at around I would say 16% to 18% discount rate. If you discount this cash flow of this ten year lease at this rate you will arrive at a net present value, which will give you the value of the property.

ALEC HOGG: And roughly, this property, what would the deal have gone through at?

NIKI VONTAS: I would hesitate to give you my comment on that.

ALEC HOGG: But what were you prepared to pay for it with a ten year lease?

NIKI VONTAS: Me, I took the income and, if I remember, I capitalised at around 13% yield. If I can give an example at the present moment, prime property transactions are arrived at at capitalising the first year net income from rental at around 9%. The Accentuate deal I would have capitalised at 13% because I would have expected a much higher initial return, taking into consideration the risks. So, I touched around the 13% return. But obviously my deal didn’t arrive because it was not acceptable.

ALEC HOGG: But in rand terms what would that make it worth?

NIKI VONTAS: Try to remember, to tell you the truth…

ALEC HOGG: Is it a R5m deal or a R20m deal?

NIKI VONTAS: No, no, no, it was, if I recall, it was a R7m or R8m deal, if I recall.

ALEC HOGG: All right, so it’s not a huge deal then.

NIKI VONTAS: No, it was not a major consideration because ultimately it was a B grade industrial property in a B grade industrial area. Also, if I recall, there were other tenants in that property [UNCLEAR], if I can remember.

ALEC HOGG: Niki Vontas, the chief executive of Bonatla.
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Sharemax collapse ‘will hurt economy’
January 26 2012 at 05:00am
By Roy Cokayne


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Roy Cokayne


THE COLLAPSE of the Sharemax group of companies and the subsequent scheme of arrangement and offer of compromise to creditors and shareholders is set to have a massive knock-on effect on the economy.

André Prakke, a chartered accountant who has investigated the affairs and schemes promoted by Sharemax over many years, is adamant that investors in Sharemax’s various schemes will not get any further money out of them despite the sanctioning of the scheme of arrangement by the North Gauteng High Court on Friday.

“That money is gone. The construction companies are still owed millions. That money will have to come from somewhere. This tragedy will unfold by the end of this year,” he said.

Brenthurst Wealth Management director and financial advisor Magnus Heystek echoed Prakke’s views, saying individual investors still stood to lose a great deal of money despite the approval of the scheme of arrangement.

Heystek said an independent investigation of the scheme of arrangement had estimated that investors would only get back 10c in each rand that they had invested.

However, Heystek said if investors felt their financial brokers had let them down, they could take the brokers to the Financial Advisory and Intermediary Services Ombud. They could claim back up to R800 000 of their invested capital if the advice they received was shown to be inappropriate.

Prakke said the knock-on effect on the economy of investors losing their money was enormous because the estimated 30 000 investors translated into about 60 000 dependants, most of them pensioners who were reliant on income from these schemes.

This meant the state would have to look after their pensions and medical care, he said.

“The worst is that the people who caused this will never have to answer (for their actions) as things are happening now. There is serious corruption behind this. Where the corruption is I don’t know but it will come out in the next five years,” he said.

Prakke stressed investors in Sharemax had no certainty of outcome because the scheme of arrangement was based on the premise that funding would be obtained to get the scheme off the ground and to complete The Villa and Zambezi Retail Park.

But Prakke questioned what would happen if funding could not be obtained.

He said Sharemax’s entire operations and planning and preparations for the scheme of arrangement had in recent times been funded by diverting money from income-producing property syndications in the group, with the approval of the statutory managers appointed by the Reserve Bank, but without the knowledge of investors in these specific schemes.

This was both irregular and illegal in terms of both the old and new Companies Act without first obtaining the authority and approval of shareholders from these specific income-producing schemes at special meetings.

The analysis in the schedules to the scheme of arrangement revealed this diversion had so far cost between R12 million and R13m, which had been provided for over a long period of time by diverting funds from income-producing schemes, but a further R9m still had to be paid, Prakke added.

Pierre Hough, a strategist and economic crime investigator, said the provisions of the Companies Act could not be used to fix the contraventions by Sharemax of the Banks Act.

Hough said an investigation by the registrar of banks found the issuing of shares and linked debentures was a contravention of the Banks Act and none of the shareholders and creditors therefore became lawful shareholders in terms of the Companies Act.

In addition, Hough said the properties that were being syndicated were not transferred to the syndication vehicle at the time the shares and linked debentures were issued, which meant there was nothing underpinning the share issue.

Hough said the scheme of arrangement meant shareholders were compromising themselves and would lose their money while the people who caused the mess could “just walk away”.

He questioned whether the statutory managers appointed by the Reserve Bank had complied with their responsibilities because they “had failed to take possession and control of the assets of Sharemax”. page 18
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Charges laid over Sharemax scheme
18 Oct 2010



Sharemax’s attorneys, Weavind & Weavind have apparently been charged with fraud by Pierre Hough, managing director of Chase International who laid the charges at the Brooklyn Police Station on behalf of one of his clients.

According to station commander, Brigadier Andre Wiese, a case of fraud had been opened but this matter had been transferred to the commercial crimes unit in Pretoria.

Hough says Weavind & Weavind failed to respond to a demand for repayment of a R200k deposit originally paid to the attorneys by one of Chase International’s clients. He has apparently lodged a claim with the fidelity fund of the Law Society of the Northern Provinces in an effort to get the client’s money back.

Hough has accused Weavind & Weavind of theft amid allegations of fraudulent non-disclosure and misrepresentation in the prospectus published for the Zambezi Retail Park.

Hough has also accused the attorneys of transferring money out of their trust account prior to the property being transferred to the syndication vehicle. The Department of Trade and Industry specifically prohibits the withdrawal of funds from a trust account prior to the properties being transferred.

Apparently Zambezi Retail Park and The Villa – other properties in the Sharemax portfolio – have not yet been transferred to the syndication company.

Kidnapping was like a scary 'action movie'




JAN 31, 2012 | SAPA-AP | 5 COMMENTS
Two men came out of nowhere as his car idled in traffic. One shot his security guard five times and stole the dead man’s gun, while the other ushered the captive into a tiny getaway car, where a waiting driver sped away. They crashed through a police roadblock and traded fire with a truck of police officers


Two men came out of nowhere as Greg Ock’s car idled in traffic in a remote Nigerian town. One shot his security guard five times and stole the dead man’s gun, while the other ushered Ock into a tiny getaway car, where a waiting driver sped away.

The car weaved through traffic on side roads and then sped to a main road, where police, known there as “mopols”, had erected a roadblock.

Ock’s captors crashed through the barricade and traded fire with a truck of police officers, who narrowly missed Ock.

“I felt like I was in an action movie,” Ock told America's Associated Press at his west Georgia home on Monday, a day after he returned to his family.

Ock, 50, was held seven days and then released Friday after he was kidnapped January 20 in Warri, a main city in the Niger Delta, an oil-rich area where foreign firms pump 2.4 million barrels of crude oil a day.

Ock worked in construction for decades, landing gigs all over the US and as far away as Abu Dhabi.

He loved the work, the camaraderie and the pay, which helped him support a wife and four daughters.

He landed in the Nigerian town of Sapele in September 2010 to begin one of his more adventurous assignments, maintaining gas turbines and other heavy machinery for Marubeni Corp.

It was tough work and the perks weren’t enticing. The food was bad, he said, and the heat was unbearable. But he had chances to leave the “little prison” of the company’s base camp, often going on Sundays with co-workers and a security guard to a golf course, or to neighbouring Benin to eat at a Chinese restaurant.

His journey the day he was ambushed wasn’t nearly as adventurous. He went with a driver, a security guard and a company secretary to a clinic in Warri, where he would get a checkup for a recent bout with malaria.

He took out some cash from an ATM, hopped in the car and tuned his iPod to Don Henley as the driver idled in traffic.

What happened next seemed to unfold in a flash.

A gunman ran up to his vehicle and yelled “die, mopol, die” as he fired five bullets into the guard. The other gunman ordered Ock out of the car and pushed him toward a tiny red Audi.

“They told me we were an easy target. We didn’t have tinted windows and only one mopol,” he said. “They told me they wanted a white guy anyways.”

They escaped the city, and one of the kidnappers then called Ock’s boss and demanded about $330,000 for his safe return.

They drove about an hour, arriving at a squat shack where he was forced into a small room. He shared the room with two or three guards, a plastic chair, piles of dirty dishes, some scattered clothes and a mattress blocking the window.

The men dulled his senses by forcing him to smoke marijuana and drink Baron Del Valle red wine at all hours.

He didn’t have many food options, either.

Early in his captivity, Ock said he asked for boiled eggs. From then on, he got four eggs in the morning and four at night. As a snack, he got apples.

He was told few details about the negotiations his captors were working with his company, adding to his unease.

When he was able to sleep, his captors often woke him by cranking an odd mix of local music and Dolly Parton classics from a stereo.

“I was on the edge all the time,” he said.

After a few days, he decided to escape. He found a butcher knife resting in a bowl and reached for it when he thought his captors were sleeping. They weren’t. One alerted the others, who “slapped me around a bit” and chained him tighter to his chair.

Despite the beating, Ock said he wasn’t tortured.

The next morning, a guard pulled out a gun and threatened to kill his captive. Ock called his bluff.

“I told them I didn’t care,” he said. “I’ve had a good life.”

On Thursday, Ock could tell the negotiations were heating up.

His captors were celebrating and drinking moonshine. Two of the men left the house around noon, returning five hours later with wide smiles.

Around 3:30 Friday morning, the men dumped Ock in a desolate area with about $12 to hail a scooter to the nearest police station. Once there, he called his boss and his wife to let them know he was OK.

Ock said he wasn’t told by either his captors or his company whether a ransom was paid.

“But they seemed happy,” he said. “They let me go for a reason — and I don’t think it was because they were out of eggs.”

He returned home on Sunday morning, arriving at Atlanta’s airport to a rapturous greeting from family and friends. There, a limousine drove him the 60-mile (96-kilometer) route to rural Bowdon.

Someone told Ock to peek out the sunroof as they approached, and when he did he saw about 500 people gathered to celebrate.

Among the gifts he received was a plastic bag with only an egg and an apple. The friend who offered it to him joked that she didn’t know if he wanted breakfast or supper, so she brought both.

Ock has no plans to return to Nigeria, instead looking for work closer to home.

But his wife Teresa said she doubts his kidnapping will scare him from working another faraway gig. “It’s in his blood to travel,” she said. “He may work here for a while. But I know him. He’ll get to itching to leave.”



http://www.sowetanlive.co.za/news/world/2012/01/31/kidnapping-was-like-a-scary-action-movie

Sowetan

Comments by Sonny

Life is cheap in Africa where Kidnapping is a National Sport.....

Sunday, January 29, 2012

Sheriff confronts Gauteng govt again


Johannesburg - The sheriff of the court has visited the Gauteng government for the second time in three days, following another failure to adhere to a court order, the DA said on Sunday.

The sheriff arrived at Gauteng Premier Nomvula Mokonyane's office on Friday to attach furniture after the health department failed to settle a R6.3m claim for medical negligence, spokesman Jack Bloom said in a statement.

The claim, granted on September 5 last year by the North Gauteng High Court in Pretoria, was instituted against the department by Shabbier Nagel. He had gone to the Steve Biko Academic Hospital in Pretoria for heart surgery, but had his leg amputated instead.

According to Bloom the sheriff arrived at the office on Friday and spent most of the morning in talks with the premier's legal advisers. An agreement was reached that they would pay the full amount by Friday, February 3.

"The delay in payment at 15.5% interest has added an extra R320 000 to be paid by the Gauteng provincial government. This could have been saved with prompt payment."

On Wednesday South Gauteng High Court deputy sheriff Diana Chivelli arrived at Mokonyane's office to attach furniture, after the provincial government failed to pay R9.25m in compensation to a boy who was left brain-damaged because of negligence at a public hospital.

"On 18 January her officials scrambled to pay the R1m that her office furniture is valued at before it was removed to pay court ordered medical damages of R9.25m to 12-year-old Prince Sibusiso Khanyi who became brain-damaged when he was born at the Pholosong Hospital [in Ekurhuleni]," he said.

The premier's spokesperson, Xoli Mngambi, said the R9.25m claim was being handled by the health department and had been referred to it. He confirmed the sheriff had visited the premier's office on January 18. He said he was not aware of Friday's visit for Nagel's claim and referred further inquiries to the health department.

Department spokesperson Simon Zwane said Nagel's claim was being processed with the aim of having it settled by Friday, February 3.

The department had been granted leave to appeal Khanyi's claim.


- SAPA

Read more on: da | nomvula mokonyane | jack bloom | johannesburg | pretoria | government spending | health | local government

Police crack real estate syndicate



Police crack real estate syndicate
Sne Masuku | 29 January, 2012 00:06
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EmailPrintPolice have cracked what is believed to be one of the country's biggest real estate crime syndicates, involving the sheriff of the court's office in KwaZulu-Natal.
A group of sheriffs are alleged to have colluded with an estate agent who bought repossessed houses for "a bargain" at auctions and sold them at highly inflated prices.

Durban South Sheriff Nthiananda Govender and estate agency boss Mohamed Afzal Ebrahim were arrested on Thursday in a joint operation between the police and the Hawks.

More arrests are expected.

Shortly after their arrest, Ebrahim and Govender appeared in the Durban Commercial Crimes Court where they were granted bail of R30000 and R50000, respectively. The men have also been charged with tax evasion.

Sources close to the investigation say Govender allegedly owes the SA Revenue Service R22-million, while Ebrahim is allegedly to have dodged paying more than R13-million in taxes. The probe into the syndicate was commissioned by First National Bank.

One of the investigators, advocate Karl Auret, said the syndicate had targeted all the major banks in the country. Although Auret could not estimate how many properties had been allegedly bought and sold by the syndicate, he said its members would buy a repossessed house valued at R200 000 for R20000.

"This alleged syndicate has been operating for years," he said.

The case was postponed to February 8 for further investigation.

Thursday, January 26, 2012

Sharemax collapse ‘will hurt economy’










Exposing a murky world
Issue #108, 1st October 2008 Noseweek Publication



Deon Basson's book was subject to a court application to suppress various chapters.(RIP Deon Basson)



Sharemax collapse ‘will hurt economy’
January 26 2012 at 05:00am
By Roy Cokayne

THE COLLAPSE of the Sharemax group of companies and the subsequent scheme of arrangement and offer of compromise to creditors and shareholders is set to have a massive knock-on effect on the economy.

André Prakke, a chartered accountant who has investigated the affairs and schemes promoted by Sharemax over many years, is adamant that investors in Sharemax’s various schemes will not get any further money out of them despite the sanctioning of the scheme of arrangement by the North Gauteng High Court on Friday.

“That money is gone. The construction companies are still owed millions. That money will have to come from somewhere. This tragedy will unfold by the end of this year,” he said.

Brenthurst Wealth Management director and financial advisor Magnus Heystek echoed Prakke’s views, saying individual investors still stood to lose a great deal of money despite the approval of the scheme of arrangement.

Heystek said an independent investigation of the scheme of arrangement had estimated that investors would only get back 10c in each rand that they had invested.

However, Heystek said if investors felt their financial brokers had let them down, they could take the brokers to the Financial Advisory and Intermediary Services Ombud. They could claim back up to R800 000 of their invested capital if the advice they received was shown to be inappropriate.

Prakke said the knock-on effect on the economy of investors losing their money was enormous because the estimated 30 000 investors translated into about 60 000 dependants, most of them pensioners who were reliant on income from these schemes.

This meant the state would have to look after their pensions and medical care, he said.

“The worst is that the people who caused this will never have to answer (for their actions) as things are happening now. There is serious corruption behind this. Where the corruption is I don’t know but it will come out in the next five years,” he said.

Prakke stressed investors in Sharemax had no certainty of outcome because the scheme of arrangement was based on the premise that funding would be obtained to get the scheme off the ground and to complete The Villa and Zambezi Retail Park.

But Prakke questioned what would happen if funding could not be obtained.

He said Sharemax’s entire operations and planning and preparations for the scheme of arrangement had in recent times been funded by diverting money from income-producing property syndications in the group, with the approval of the statutory managers appointed by the Reserve Bank, but without the knowledge of investors in these specific schemes.

This was both irregular and illegal in terms of both the old and new Companies Act without first obtaining the authority and approval of shareholders from these specific income-producing schemes at special meetings.

The analysis in the schedules to the scheme of arrangement revealed this diversion had so far cost between R12 million and R13m, which had been provided for over a long period of time by diverting funds from income-producing schemes, but a further R9m still had to be paid, Prakke added.

Pierre Hough, a strategist and economic crime investigator, said the provisions of the Companies Act could not be used to fix the contraventions by Sharemax of the Banks Act.

Hough said an investigation by the registrar of banks found the issuing of shares and linked debentures was a contravention of the Banks Act and none of the shareholders and creditors therefore became lawful shareholders in terms of the Companies Act.
( Pretoria News )
In addition, Hough said the properties that were being syndicated were not transferred to the syndication vehicle at the time the shares and linked debentures were issued, which meant there was nothing underpinning the share issue.

Hough said the scheme of arrangement meant shareholders were compromising themselves and would lose their money while the people who caused the mess could “just walk away”.

He questioned whether the statutory managers appointed by the Reserve Bank had complied with their responsibilities because they “had failed to take possession and control of the assets of Sharemax”. page 18


Related article going back to 2010..........

Sharemax attorneys form new company
December 13 2010 at 06:01am
By Roy Cokayne


Sharemax Investments’ attorneys Weavind & Weavind, a 105-year-old firm that faces possible liquidation over its alleged illegal release of funds deposited into its trust account by investors in two Sharemax syndications, has registered a new corporate entity.

Companies and Intellectual Property Registration Office records show that W and W Associates was registered by Doreza van Wyk, an associate attorney at Weavind & Weavind, on November 10.

The new firm lists the same physical address and auditors as Weavind & Weavind but the physical address differs from that on Weavind & Weavind’s website. The business start-up date was November 10.

Jaco Spies, a senior legal official for the disciplinary department of the Law Society for the Northern Provinces, said last week that the society did not have any knowledge of the new registration.

Spies said all new law firms were required to register with the law society, complete certain forms and obtain a fidelity fund certificate.

Raiford Johnson, a senior partner at Weavind & Weavind, confirmed the firm had registered a company by the name of W and W Associates “to meet any future needs in terms of our expansion and/or diversification strategy”.

He said: “At present neither our directors nor any of the lawyers employed by us, including Ms Van Wyk, have any intention of practising in any other capacity than as directors and employees of Weavind & Weavind.”

Kobus Schabort of Schabort Incorporated, an attorney representing 11 investors in two Sharemax syndications, who submitted a letter of demand in October to Weavind & Weavind for the repayment of R1.55m his clients had deposited into its trust account for The Villa and Zambezi Retail Park syndications, declined to comment on the reason for Weavind & Weavind registering a new firm.

“I don’t know why they did it but can make my own inferences,” he said.

The demand submitted to Weavind & Weavind was in terms of section 345 of the Companies Act, which is a precursor to a possible liquidation application.

A government notice on property syndications, issued in 2006, prohibits the withdrawal of funds from a trust account before properties for a proposed syndication have been transferred to the syndication vehicle. Neither Zambezi Retail Park nor The Villa have been transferred to the syndication vehicles. Weavind & Weavind maintains the government prohibition is not applicable to the firm.

Schabort said a decision had not yet been taken on whether an application would be launched for the liquidation of Weavind & Weavind. He said consultations were still taking place with his clients and that a decision would definitely be taken this week.

A R200 000 claim was lodged by a single investor in October with both the law society’s fidelity fund and Attorneys Insurance Indemnity Fund related to the release of funds deposited into Weavind & Weavind’s trust account.

The same investor also opened a fraud case at the Brooklyn police station in Pretoria. The case was subsequently transferred to the commercial crimes unit.

Sharemax defaulted on monthly payments to investors in early September and construction on both Zambezi Retail Park and The Villa ground to a halt at the same time.

The registrar of banks in mid-September appointed statutory managers to manage the repayment of funds after an investigation found that Sharemax’s funding model contravened the Banks Act.

About 40 000 shareholders have invested about R4.5 billion in property syndications promoted and marketed by Sharemax. - Business Report

-------------------------------

The luxurious lives of Sharemax bosses
Nov 13 2011 11:03 Jaques Pauw Related Articles
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Why Sharemax deserves a death blow
Johannesburg - 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 R250m 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 R5bn 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 R9m of money intended for investors.


Brand also alleged that Botha had, over a period of four years, pocketed R53m in “commission” from a Sharemax front company. Brand demanded a R24.5m 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 R120m and R150m, 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 R79m, and has giraffe, eland, kudu, gemsbok, cheetah and leopard.


The farm’s lodge alone cost Brand an estimated R20m 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 R21.5m 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 R15m.


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 R15m 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


Read more about:
fraud | sharemax | investing | property

----------------------------------------------------------------------------------



13 December 2011 23:01 Special Report Podcast: Niki Vontas – CEO, Bonatla
Interviewer ProfileAlec Hogg is a writer and broadcaster. He founded Moneyweb and is its editor-in-chief.

Sharemax: Liquidation averted? Niki Vontas - CEO, Bonatla

Niki Vontas cries foul says communication process to shareholders is flawed.
- DOWNLOAD THIS INTERVIEW

ALEC HOGG: It’s Tuesday December 13 2011 and in this Boardroom Talk special podcast, Niki Vontas, chief executive of Bonatla Property, joins us now. Niki, good to have you on the programme, there’s been big developments in the Sharemax saga. From your perspective though, you did propose a rescue scheme and walked away, why? What was the background to that?

NIKI VONTAS: I put together a proposal that was originally accepted by the directors of Sharemax and they circulate it to the constituencies. Unfortunately, if you remember, there were a lot of public debates and public analysis in the Financial Mail or the Finance Week in which I commented and obviously I commented on controversial findings of my due diligence and they invoked this disclosures to the press for canceling the transaction summarily for disclosure of, for a breach of non-disclosure, which I find very funny because the press knew almost as much I knew already.

ALEC HOGG: So, you didn’t really walk away it was more a question of being kicked out.

NIKI VONTAS: I need to tell you I still haven’t walked away, there could be still some surprises but I cannot comment on that yet.

ALEC HOGG: But at the moment shareholders or investors, 35 000 of them, at Sharemax have actually voted in favour of a rescue scheme that’s being decided on right now. You don’t think it’s such a good idea?

NIKI VONTAS: Well, first obviously I wouldn’t like to comment on the process but from the little I’ve seen, if you visit the Sharemax website you’ll see that there’s less than 200 people visiting that website a day, there’s very little visits. What you find generally speaking in this doomed [UNCLEAR] syndication schemes like Bluezone that we salvaged or Sharemax or [UNCLEAR] or Realcor, you’ll find that the investors are generally older investors, generally Afrikaans, they haven’t got an email address, they haven’t got proper communication skills and they really rely on [UNCLEAR] communication to get decisions or information passed onto them. So, what I dispute really is that the process is completely flawed. I don’t believe that proper documentation has been circulated to investors to allow them whether or not they will get the investment of such a long period as [UNCLEAR] ten years and what Magnus Heystek, in fact, commented on the Business Report is absolutely right. It’s a total circus.

ALEC HOGG: It’s a circus you say?

NIKI VONTAS: It’s a total circus…[UNCLEAR] a total circus because if you want to put a proposal to 30 000 or 40 000 people on most probably the biggest failure in physical property in South Africa, you at least make the owner of at least the proper analysis of the merit or the pitfalls, you give feasibilities, you give time value of money, your present value, the returns over such a long period. You give them some form of information to ponder about and you don’t give them such a short time basically. Basically to me it’s a little bit of a hit and run operation that’s basically the way I consider it.

ALEC HOGG: From a business perspective though, can this rescue plan that has been proposed work?

NIKI VONTAS: I don’t think so. You’ll find that the Sharemax [UNCLEAR] is not finished, you’ll find some further applications for liquidations, further litigation. Obviously by now the investors are desperate and therefore they are going to consider anything but I still believe that in property there is always a solution. Sometimes if the difficulties are extreme, like in Sharemax, the solutions are more extreme but I still believe its investors deserve proper information in order to make a proper decision. They should, I think…if you want to talk to shareholders you can work like in the old Company Act, [UNCLEAR] to get special resolutions, you conduct meetings, you’ve got quorums and things like that. I haven’t seen anything of that sort. It looks like a bosberaad and the next day you basically announce a 99.9% approval. Last time I’ve seen that it was 1938 and 1939 in Hitler’s referendum. So, my feeling, you need to apply corporate governance, the new companies act, you need to apply proper process to give the time and information to investors to decide whether or not these solutions be good for them an what applies for them, applies for anybody. If I do that transaction, they should also call special meetings and give information and give analysis and ask the press to comment. This thing is a little bit of an occult operation.

ALEC HOGG: Do you know Connie Myburgh, the lawyer who’s behind this rescue scheme?

NIKI VONTAS: Yes, I’ve heard about him, yes.

ALEC HOGG: I believe our investigation journalist, Julius Cobbett, says that he was one of those who vigorously defended the Garek disaster. Lots of people lost much money there as well. What is his motive in this? Are you saying that his motive perhaps is questionable?

NIKI VONTAS: I believe Mr. Myburgh was involved also, if I remember, with Colin Barnard and the fiasco on the Melrose Arch deal with the mine pension fund in 2004, on which I think the late Ian Fife put some very nice article on them, so there must be a bibliography on the SM available if [UNCLEAR]

ALEC HOGG: So, if the courts are to sanction this, would you then try to go to court to get it reversed?

NIKI VONTAS: No, we’ve got other things pending but I cannot believe a court, looking at the way this process was handled, is going to sanction it. I don’t believe a proper judge is going to sanction a process like that. It’s the biggest failure in property in South Africa with 40 000 or 45 000 victims that are asked to give the money over and most of them, I can guarantee you, will be dead before the last payment because they are generally - the syndication investors in all these schemes – are generally retired people, who unfortunately invested their life savings in a property investment with obviously a property and a financial risk and therefore they lost their investment and now ask to receive the return on the investment through their estates because a lot of them won’t survive that [UNCLEAR], I can tell you that.

---------------------------------------------------------------------------

Fais Ombud orders Sharemax broker to repay R800 000

Financial advice ombudsman Noluntu Bam delivered her first negative finding against a Sharemax broker last week. Her determination may spark fear among those who sold shares in the property syndication company’s two biggest projects, Zambezi and The Villa. It may also encourage other investors to lay complaints against their brokers.

Sharemax is one of the country’s two largest sellers of property syndication schemes. Investors, many of them elderly, have placed about R4.5bn in its numerous schemes. The Villa and Zambezi together account for R2.5bn of investors’ funds. They are also two of the most troubled schemes.

On Wednesday Bam ordered financial adviser Deeb Risk to repay his client, 72-year-old retiree Elise Barnes, R800 000 she had invested in Zambezi. Barnes actually invested R1.4m in the scheme, but the Ombud’s office is only empowered to adjudicate on losses up to R800 000.

A copy of Bam’s order can be downloaded here.

Risk declined to comment on Bam’s finding. He would only say that he will appeal it.

Some commentators have claimed that a complaint against Sharemax brokers would be premature because it is yet to be determined how much investors stand to lose. Moneyweb has previously argued that this should not prevent investors from laying complaints against their financial advisers, and the Ombud’s ruling confirms this view.

Says Bam in her ruling: “The issue is not whether some monies will be recovered by [Barnes] at some future unknown date. The test is whether the advice, given [Barnes’s] circumstances was appropriate. The advice provided was patently flawed.”

Bam had some harsh words for Risk, who she says meant to sell the Zambezi product to Barnes “whether it made sense or not, whether it was inconsistent with [her] circumstances or not”.

But it is Bam’s comments about the Zambezi scheme in general that should be of more concern to Sharemax brokers.

“Had [Risk] read and understood the prospectus he ought to have appreciated the deficiencies,” says Bam.

She describes how the public company into which investors’ money was placed, had only one asset: a shareholding in a private company, Zambezi Retail. “Herein lies the danger,” Bam explains. “Private companies do not have their affairs being subject to public scrutiny.” Bam also notes that Sharemax ensured that at least three of its own directors will be at Zambezi Retail for five years from the date of registration of the prospectus.

“A provider acting with due skill and in the interest of his client would have asked himself, if the two major players, namely the two private companies, are controlled by the same persons, how is accountability, transparency going to be enforced and how is investor protection going to be ensured?”

Bam found that Risk had, among other things:

Failed to disclose that Sharemax Zambezi was a long-term, illiquid investment. His own documents revealed that Barnes would need her capital in one-three years;
Failed to disclose the risk inherent in the Zambezi scheme;
Failed to disclose the investment’s costs;
Did not recommend a product commensurate with his client’s risk tolerance;
Failed to act with due skill, care and diligence in the interest of his client and the integrity of the financial services industry;

Julius Cobbett

http://www.moneyweb.co.za/mw/view/mw/en/page292525?oid=555543&sn=2009+Detail&pid=548238
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Die beleggers wat sedert 2007 reeds R765 miljoen gestort het in die Zambezi Mall-ontwikkeling wat Sharemax bevorder het, gaan oor ’n week of twee dokumente oor die voorgestelde artikel 311-skema ontvang. Dan mag hulle treur. Hul beleggings is wat inkomste en die terugbetaling van kapitaal betref, waarskynlik niks werd nie.

Die mooi broodjies wat die nuwe sogenaamde onafhanklike direkteure nou bak, troos net die finansiële adviseurs wat die onskuldige beleggers in die eerste plek in die nikswerd posisie geplaas het. Die beleggers wat R1,55 miljard in The Villa gestort het, kan solank begin saamtjank. Jul belegging kan ook nie gered word nie – nie deur ’n A311 of enigiets anders nie.

Die jongste skrywe – toevallig gedateer 1 April 2011 – aan die beleggers en in die naam van die nuwe direkteure, bevat ’n oppervlakkige uiteensetting van die A311-skema wat binnekort voorgelê gaan word. Die nuus is dat die gebou op erf 5, Derdepoort-wyk, waarop die winkelsentrum Zambezi Mall opgerig is, nie meer aan julle oorgedra gaan word nie. Kortweg: Julle het nie ’n eiendom met die R765 miljoen gekoop nie.

Finweek se krapwerk vertel kortliks die volgende: Op erf 5, Derdepoort, het die ontwikkelaar Capicol ’n winkelsentrum met ’n verhuurbare oppervlakte van ongeveer 30 000 m2 opgerig. Capicol skuld nog sowat R70 miljoen aan die bouer WF Kroon vir werk wat reeds gedoen is. Om sinvolle toegangspaaie na die sentrum te bou, sal nog sowat R10 miljoen kos. Capicol het kortom sowat R100 miljoen nodig om die projek te voltooi.

Om dit te bekom, moet Capicol ’n eerste verband oor die eiendom registreer. Dit kan net gedoen word as die Sharemax-beleggers afstand doen van hul reg op die gebou en toestemming gee dat hul huidige dekkingsverband van R600 miljoen oor die eiendom gekanselleer word.

Maar julle gaan nie met leë hande huis toe nie. Dit is die goeie nuus vir die finansiële adviseurs wat ná die tweede deel van die skema skynbaar ook nie meer aanspreeklik sal wees vir die slegte advies wat hulle aan veral senior burgers gegee het nie.

Capicol gaan oor die volgende 15 jaar R1 miljard aan die beleggers terugbetaal. Dit is 30% meer as die R765 miljoen wat julle belê het. Die terugbetaling oor die volgende 15 jaar geskied soos volg, en nogal maandeliks ook: Julle ontvang vir 15 jaar elke maand 70% van die netto huurinkomste wat Zambezi Mall verdien. Onthou, dit is 70% van die netto huurinkomste, dus nadat voorsiening gemaak is vir rente op die verband van R100 miljoen wat Capicol nog moet bekom. Paul Kyriacou, grootbaas van Capicol, is optimisties dat hy selfs voor die verstryking van die 15 jaar hul volle kapitaal aan die beleggers sal kan terugbetaal.

Jammer, maar ek en my adviseurs is maar siniese ou mans wat nogal daarvan hou om sommetjies te maak om die aansprake te toets wat so maklik gemaak word.

Die verwagting wat geskep word en waaroor beleggers sal moet besin voordat hulle die A311-proses goedkeur, is dat 70% van die netto huurinkomste van 30 000 m2 oor die volgende 15 jaar genoeg sal wees om aan hulle R1 miljard te betaal. Die sommetjie werk nou soos volg. Deel R1 000 miljoen deur 15 jaar en deel die antwoord dan deur 12 maande en weer deur 30 000 m2. Dit gee ’n antwoord van R185. Die antwoord beteken dat 70% van die gemiddelde netto huurinkomste van Zambezi oor die volgende 15 jaar R185/m2 moet wees. Om by die volle vereiste netto huurinkomste uit te kom, deel ons R185 deur 0,70. Dit gee ’n netto huurinkomste van R264/m2. Eienaars van winkelsentrums weet egter dat die netto huurinkomste selde meer is as 70% van die bruto huurinkomste. Om die bruto huurgeld – dit is die maandelikse huurgeld wat huurders betaal – te kry, moet ’n mens die R264/m2 weer deur 0,7 deel. Dit gee vereiste bruto huurgeld van R377/m2 per maand as die sentrum altyd 100% beset is. Dit is nogal ’n taai vereiste.

Voordat julle, beleggers en finansiële adviseurs, te opgewonde raak oor die nuwe wonderwerk, stel Finweek voor dat julle eers die volgende doen: Vra jou finansiële adviseur vir ’n lekker lang besoek aan Zambezi Mall. Dalk gaan van die nuwe direkteure saam … Jy sal vind dat net sowat 80% van die verhuurbare oppervlakte tans beset word deur huurders wat hoegenaamd maandeliks huur kan betaal. Een huurder is Checkers, en wees verseker hy betaal nêrens R377/m2 vir winkelspasie nie.

Vra die direkteure wat die gemiddelde bruto huurinkomste per vierkante meter is wat die genoteerde Growthpoint se toptien winkelsentrums per maand verdien. Vra wat dink hulle moet gebeur om dit vir Zambezi Mall moontlik te maak om meer huurgeld per vierkante meter te verdien as die toptien sentrums. Finweek sal graag die inligting met sy lesers en ander Sharemax-beleggers wil deel.

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Lang wagtyd vir Sharemax-beleggers

David van Rooyen
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Sharemax: Beleggers betaal dalk prys
Jan 29 2012 07:51

Johannesburg. – Die vreugde­vure behoort te brand, want die Sharemax-sage het ’n oplossing gekry.

Veral die makelaars wat onskuldige beleggers in dié gemors gelei het, vertel daardie beleggers nou dat hulle hul geld gaan terugkry.

Maar gaan hulle?

Ingevolge die reëlingskema met Sharemax se skuldeisers is belowe dat die eiendomme waarin belê is, oor tyd só reggeruk gaan word dat dit óf verkoop sal kan word óf finansiering gekry sal kan word met die eiendom as sekuriteit en dat beleggers dan met dié geld terugbetaal sal word.

Die reëlingskema het immers tyd gekoop om die situasie op te los, want die groot voordeel van só ’n skema is dat dit die gevaar van likwidasie afweer.

In so ’n gemors soos dié waarin Sharemax verkeer, klink likwidasie dalk na ’n vinnige oplossing, maar die eiendomsportefeulje is in so ’n haglike posisie dat dit vir baie min verkoop sal word.

As die likwidateurs en ander skuldeisers hul deel gekry het, gaan baie min vir beleggers oorbly en gaan mense groot verliese ly.

Nou is daar ten minste ’n geleentheid om iets aan die saak te doen, maar oor of beleggers oor vyf of tien jaar al hul geld sal terugkry, is daar twyfel.

Daar is steeds ’n wesenlike moontlikheid dat beleggers verliese gaan ly – al sê die makelaars wát.

Andersins sal hulle bereid moet wees om baie lank te wag voordat die eiendomme genoeg werd sal wees om hul belegging uit te keer.

’n Handelseiendom se waarde word net deur een faktor bepaal: die inkomste wat ’n belegger daaruit verdien. ’n

Gerespekteerde waardeerder wat die Sharemax-portefeulje ken, raam dat kopers ’n opbrengs van minstens 10% sal verlang voordat hulle dit sal oorweeg om van die eiendomme of die portefeulje te koop.

As die bestaande inkomste nie so ’n opbrengskoers moontlik maak nie, moet die prys noodgedwonge daal tot ’n vlak waar die verlengde opbrengskoers weer moontlik is.

’n Ontleding van die verskillende eiendomme se opbrengs dui daarop dat ’n belegger nou dalk net bereid sal wees om een van die eiendomme, 148 Leeupoort, vir die gesindikeerde bedrag te koop. Dié eiendom verdien vir sy beleggers ’n inkomste van 11,86%.

Omdat die inkomste-opbrengs van die meeste eiendomme tussen 1,4% en 4% van die gesindikeerde waarde beloop, gaan beleggers in die meeste gevalle nie meer as 40% van die geld wat hulle belê het, terugkry as die geboue nou verkoop word nie – ás daar kopers is.

Trouens, net vier van die eiendomme in die portefeulje van 22 eiendomme verdien tans ’n opbrengs van meer as 5%, en vier verdien selfs niks nie (Zambezi Retail en The Villa Retail Park in Pretoria ingesluit).

Dit beteken dat meer as 80% van die eiendomme se inkomste binne ’n paar jaar minstens moet verdubbel om opbrengskoerse by die vlak te kry waar kopers sal belang stel.

As toestande in die eiendomsmark verbeter, kan potensiële kopers dalk met kleiner opbrengste tevrede wees, maar selfs al gebeur dit, sal die meeste eiendomme se inkomste met 15% tot 25% per jaar moet toeneem.

’n Paar wonderwerke is dalk hiervoor nodig. Nie een van die 18 skemas wat tans ’n inkomste verdien, se inkomste-opbrengs het verlede jaar gestyg nie. Deur die bank was almal s’n verlede maand laer as in Maart.

Twee van die vernaamste redes hiervoor is stygende leegstaansyfers en al hoe meer huurders wie se huurgeld agterstallig is.

Nie een van die eiendomme kon iets beduidends aan die leegstaansyfer doen nie – trouens, die persentasie het oorwegend gestyg.

Leë ruimte en agterstallige huurgeld is die gevolg van die swak ekonomie en die moontlikheid dat ekonomiese toestande gou dramaties gaan verbeter, lyk nie goed nie.

Die swak ekonomie skep ook ’n ander probleem, naamlik dat dit vir eiendomseienaars bitter moeilik is om huurgeld skerp op te stoot, veral as dit soos in die geval van Sharemax skerp móét styg.

Die bestuurders van verskeie van die eiendomme het trouens laat blyk dat hulle eerder huurgeld verlaag om huurders te lok.

Van die eiendomme se toekoms lyk ook duister weens nog nuwe ontwikkelinge in dieselfde gebied wat huurders en hul klante wegrokkel.

’n Voorbeeld hiervan is die Sharemax-sentrum Liberty Mall in Welkom waar ’n nuwe winkelsentrum in die omgewing daartoe help lei het dat 67% van sy ruimte leegstaan. Beleggers verdien tans geen opbrengs uit dié sentrum nie.

Frontier Asset Management meen die sentrum het steeds potensiaal en wil geld belê om dit vir huurders aantreklik te maak, maar erken terselfdertyd op sy webblad dat die mark vir winkelruimte in Welkom heeltemal oorversadig is.

Nog ’n probleem is dat die beleggers destyds baie meer in die eiendomme belê het as wat dit werd was. Tot 30% van die geld wat beleggers beskikbaar gestel het, is nie gebruik om in eiendom te belê nie, maar het gegaan vir promotorsgeld, koste en die lekker kommissie wat die makelaars gekry het.

Dié geld is nie agterbaks ingesamel nie. Dit is baie duidelik in die prospektus uitgestippel, maar beleggers (of dalk hul slim makelaars) het dit nie gelees of besef wat die implikasie daarvan is nie.

Voordat ’n belegger dus sy geld kan terugkry, moet die waarde van die eiendom nie net herstel tot die vlak waarteen dit gekoop is nie, maar baie meer toeneem om vir die res van die uitgawes te betaal.

Boonop het die reëlingskema gepaardgegaan met groot koste, waarvan die besonderhede getrou aan die nuwe bestuur se styl waarskynlik geheim sal bly.

Daar is miljoene betaal aan skikkings met skuldeisers en astronomiese regskoste, en dié geld kom nie uit die Sharemax-bestuur se sak nie, maar is by die eiendomsmaatskappye geleen en moet waarskynlik uit toekoms­tige opbrengste vergoed word.

Sake24 sê nie beleggers gaan niks terugkry nie.

Die struktuur is geskep om beleggers oor tyd te betaal en die huidige bestuurders gaan dit waarskynlik probeer doen.

Dit is egter nie reg om valse verwagtinge by beleggers te skep nie. Daar is baie struikelblokke wat kan keer dat die eiendomswaardes genoeg herstel om beleggers se geld binne die beloofde tye terug te gee.


Lees meer oor: sharemax

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Charges laid over Sharemax scheme
18 Oct 2010



Sharemax’s attorneys, Weavind & Weavind have apparently been charged with fraud by Pierre Hough, managing director of Chase International who laid the charges at the Brooklyn Police Station on behalf of one of his clients.

According to station commander, Brigadier Andre Wiese, a case of fraud had been opened but this matter had been transferred to the commercial crimes unit in Pretoria.

Hough says Weavind & Weavind failed to respond to a demand for repayment of a R200k deposit originally paid to the attorneys by one of Chase International’s clients. He has apparently lodged a claim with the fidelity fund of the Law Society of the Northern Provinces in an effort to get the client’s money back.

Hough has accused Weavind & Weavind of theft amid allegations of fraudulent non-disclosure and misrepresentation in the prospectus published for the Zambezi Retail Park.

Hough has also accused the attorneys of transferring money out of their trust account prior to the property being transferred to the syndication vehicle. The Department of Trade and Industry specifically prohibits the withdrawal of funds from a trust account prior to the properties being transferred.

Apparently Zambezi Retail Park and The Villa – other properties in the Sharemax portfolio – have not yet been transferred to the syndication company.

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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

Sharemax collapse ‘will hurt economy’








Sharemax collapse ‘will hurt economy’
January 26 2012 at 05:00am
By Roy Cokayne


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Roy Cokayne


THE COLLAPSE of the Sharemax group of companies and the subsequent scheme of arrangement and offer of compromise to creditors and shareholders is set to have a massive knock-on effect on the economy.

André Prakke, a chartered accountant who has investigated the affairs and schemes promoted by Sharemax over many years, is adamant that investors in Sharemax’s various schemes will not get any further money out of them despite the sanctioning of the scheme of arrangement by the North Gauteng High Court on Friday.

“That money is gone. The construction companies are still owed millions. That money will have to come from somewhere. This tragedy will unfold by the end of this year,” he said.

Brenthurst Wealth Management director and financial advisor Magnus Heystek echoed Prakke’s views, saying individual investors still stood to lose a great deal of money despite the approval of the scheme of arrangement.

Heystek said an independent investigation of the scheme of arrangement had estimated that investors would only get back 10c in each rand that they had invested.

However, Heystek said if investors felt their financial brokers had let them down, they could take the brokers to the Financial Advisory and Intermediary Services Ombud. They could claim back up to R800 000 of their invested capital if the advice they received was shown to be inappropriate.

Prakke said the knock-on effect on the economy of investors losing their money was enormous because the estimated 30 000 investors translated into about 60 000 dependants, most of them pensioners who were reliant on income from these schemes.

This meant the state would have to look after their pensions and medical care, he said.

“The worst is that the people who caused this will never have to answer (for their actions) as things are happening now. There is serious corruption behind this. Where the corruption is I don’t know but it will come out in the next five years,” he said.

Prakke stressed investors in Sharemax had no certainty of outcome because the scheme of arrangement was based on the premise that funding would be obtained to get the scheme off the ground and to complete The Villa and Zambezi Retail Park.

But Prakke questioned what would happen if funding could not be obtained.

He said Sharemax’s entire operations and planning and preparations for the scheme of arrangement had in recent times been funded by diverting money from income-producing property syndications in the group, with the approval of the statutory managers appointed by the Reserve Bank, but without the knowledge of investors in these specific schemes.

This was both irregular and illegal in terms of both the old and new Companies Act without first obtaining the authority and approval of shareholders from these specific income-producing schemes at special meetings.

The analysis in the schedules to the scheme of arrangement revealed this diversion had so far cost between R12 million and R13m, which had been provided for over a long period of time by diverting funds from income-producing schemes, but a further R9m still had to be paid, Prakke added.

Pierre Hough, a strategist and economic crime investigator, said the provisions of the Companies Act could not be used to fix the contraventions by Sharemax of the Banks Act.

Hough said an investigation by the registrar of banks found the issuing of shares and linked debentures was a contravention of the Banks Act and none of the shareholders and creditors therefore became lawful shareholders in terms of the Companies Act.

In addition, Hough said the properties that were being syndicated were not transferred to the syndication vehicle at the time the shares and linked debentures were issued, which meant there was nothing underpinning the share issue.

Hough said the scheme of arrangement meant shareholders were compromising themselves and would lose their money while the people who caused the mess could “just walk away”.

He questioned whether the statutory managers appointed by the Reserve Bank had complied with their responsibilities because they “had failed to take possession and control of the assets of Sharemax”. page 18

Pay without work for KZN teachers


Pay without work for KZN teachers
2012-01-26 22:31


Durban - More than 900 KwaZulu-Natal teachers earn salaries without setting foot in classrooms, provincial education authorities said on Thursday.

These teachers claimed to have been displaced from their work places because of violence and intimidation, Education MEC Senzo Mchunu said in Durban.

"We are trying to deal with this problem because it hits us financially. We have agreed to develop a process to fast track the absorption and utilisation of these educators," he told reporters.

KwaZulu-Natal was the only province with this problem because of its history of political violence.

Some teachers had apparently been displaced for years. All they did was regularly go to the education department's circuit office to sign paperwork indicating they were still in the department's employ.

Mchunu said the department was busy doing away with the "displaced" category.

"This has to stop because we no longer have violence in this province. If teachers have problems in their schools, they must stay until those problems are resolved."

Some teachers refused to go to the new schools to which they had been assigned - with union backing.

Mchunu said the department would also deal with principals who consistently produced poor matric results.

"We are worried about the poor level of accountability among some principals. You find a principal who would produce less than 20% matric pass rate for four years and nothing is done to him."

They would first get training. Further action would be taken against them if they continued to perform badly.


- SAPA

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