Property mogul wants to list R7.6bn portfolio

The Reserve Bank invites people to report suspected illegal deposit-taking (Pyramid or Ponzi) schemes to sarb-banksup@resbank.co.za. Alternatively call 0800 677 772 or SMS the Primedia Crime line on 32211.

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Property
Author: Julius Cobbett|
21 December 2012 14:51

Property mogul wants to list R7.6bn portfolio

New listing will affect 18 000 investors in the failed Pickvest syndication schemes.

JOHANNESBURG - The Georgiou Group wants to list a portfolio of properties on the JSE. The estimated size of the portfolio is R7.6bn. This would make it bigger than listed funds such as Sycom Property Fund, Fortress Income Fund and Premium Properties.

The portfolio’s flagship property will be the Fourways Mall, north of Johannesburg.

The Georgiou Group is a large private portfolio founded by 68-year-old property mogul Nic Georgiou. The listing would not be Georgiou’s first foray into the public investment space; for the past few years he has been involved with the controversial property syndication promoter Pickvest (formerly PIC Syndications).

Georgiou sold properties to Pickvest investors and also “guaranteed” their returns through head lease and buy-back agreements.

In September 2011, eight Pickvest-promoted property syndication schemes worth R4.6bn entered business rescue proceedings. Hans Klopper was appointed business rescue practitioner to all eight schemes.

Late last year investors voted in overwhelming favour for a scheme which would see them become creditors of a Georgiou-owned company called Orthotouch. The rescue scheme proposed that Orthotouch pay investors income of 6% a year, increasing by 25 basis points each year. After five years, in December 2016, investors are due full repayment of their capital.

Rumours of Georgiou’s attempted JSE listing have been circulating for the past few months. The proposed listing was confirmed this month by Klopper in an announcement on the Orthotouch website.

“In terms of the revised business plan recently approved by the board, Orthotouch will participate in a strategic decision by the Georgiou Group to list a property portfolio of approximately R7,6 billion on the on the Johannesburg Stock Exchange. The commercial property portfolio includes Fourways Mall (one of the country’s premier commercial developments in Northern Johannesburg) and approximately R2.9 billion of the Orthotouch properties. This listing is due to take place in April 2013,” writes Klopper.

As a result of the transaction, Klopper says that a “substantial portion of Orthotouch’s assets will be converted into shares in the listed entity, which will be highly regulated – the JSE being widely regarded to be one of the top regulated Stock Exchanges in the world.”

Klopper’s update did not reveal who the directors of the listed entity would be, or whether approval to list has yet been sought from the JSE. Approached for comment, Klopper declined to provide further details: “What was contained in my communication dated 12th December 2012 to investors in the Highveld Syndication companies was what I prepared to divulge at this stage and which was cleared with the role players involved in the matter.”

In October Moneyweb reported that the original business rescue plan had not gone quite as planned. The article reported the following facts:

As part of the rescue plan, Georgiou was supposed to transfer properties worth billions to Orthotouch. However, nine months into the plan, most if not all of the properties had not yet been transferred;
Several properties that were supposed to be transferred to Orthotouch had been sold. The proceeds of these sales amounted to more than R400m;
Orthotouch chairman, lawyer Jannie Nel, had his services terminated.

Prior to publication, a draft copy of the article was sent to Orthotouch spokesman Theo Koutsoudis. Koutsoudis claimed the article was “fraught with inaccuracies and innuendos”. However, Koutsoudis has declined to identify even one of the alleged inaccuracies, despite repeated invitations to do so.

On December 21, Moneyweb received the following letter from Orthotouch director Hans Klopper:

Dear Julius

HIGHVELD SYNDICATION 15 – 18 \ 20 – 22 LIMITED (UNDER BUSINESS RESCUE)

YOUR ARTICLE IN MONEYWEB OF 3 OCTOBER 2012 – PROPERTY MOGUL STUMBLES IN R4,6BN SYNDICATION RESCUE

1. Pursuant to previous correspondence (including that exchanged between yourself and Theo Koutsoudis). I address you hereunder in my capacity as a Director of Orthotouch and also as the Business Rescue Practitioner in the Highveld Syndication Companies.

2. Your above article was written after the draft thereof had been sent to Theo Koutsoudis for comment and he had written to you stating that it was “fraught with inaccuracies and innuendos”. You did not seek to change the article in any way and merely appended the letter written by Koutsoudis. Thereafter, on 15 October 2012 you advised me by e-mail that “the contents of the article were checked thoroughly”.

3. With respect, such contents could not have been checked thoroughly as a number of glaring inaccuracies appear therein, not least of all the following:

3.1. It is absolutely incorrect that “Investors accepted a proposal by Georgiou to repay them after five years”. After the Syndication Companies were placed under Business Rescue by their Directors, Orthotouch Limited (the shares in which are owned by Nic Georgiou through the NAG Trust) offered to purchase from them all their properties and rights to take transfer of properties on the basis that the price would be paid in 5 years and interest would be paid monthly. The Offer was included in the Plan which was accepted by an overwhelming majority of shareholders (in excess of 99% of more than 11500 out of 18 231 present or represented at the meeting of creditors).

3.2. The entire Plan was a bail-out of the HS Companies, which but for the Plan would have been liquidated with devastating losses for their Investors.

3.3. It is equally incorrect and misleading that “Georgiou was supposed to transfer properties worth billions of rand to a public company called Orthotouch”. Orthotouch has not had the cash resources to enable it to take transfer of the properties which are registered in HS15 to 18, or the rights to properties which vest in HS19 to 22. Orthotouch, in tems of the Plan, as at the date of its adoption, had a loan from Zephan Properties (Pty) Ltd of R1,6 billion of which R500 million was subordinated. The HS Companies and Zephan are and at all times were willing to transfer the properties and will complete the process when the resource of Orthotouch required to implement the transfer are in place.

3.4. As will clearly appear from the Plan it was always envisaged that properties would be sold and/or redeveloped.

3.5. The article states “Georgiou and his family own property jewels such as the Fourways Mall, Cedar Square, and Loch Logan Waterfront in Bloemfontein.” None of the properties mentioned above ever belonged to or were involved with Zephan and/or Orthotouch and/or any of the HS companies. There can be no reason whatsoever to mention these properties in this article other than to fuel sensationalism and speculation.

3.6. The report states “Moneyweb can also reveal that valuable properties that were supposed to be transferred to Orthotouch have been sold. The proceeds of these sales amount to more than R400m. Some of the larger properties sold include: Southdale Shopping Centre for R175m; 1 Centex Close, Sandton for R99m; Pembury Lodge for R45m; Safeside, Mpumalanga for R15m; and 5-7 Main Road, Melville for R13m.”

3.7. If one reads the Plan it is very clear that 1 Centex Close never formed part of the Business Rescue Plan in the first place. The report is also inaccurate in that The Southdale Sale only effectively realised about R160 m and Pembury Lodge had not at that date been transferred. Of more concern, the report fails to state that all proceeds are applied towards servicing the Zephan Loan and the other expenses of Orhotouch including the servicing of the post commencement finance, interest and operating costs. This was dealt with in my report to all investors dated 13th August 2012 and that is on our website.

3.8. The books and records of Orthotouch are kept properly and are audited by Grant Thornton (formerly BDO of Pretoria).

3.9. Indeed the former Chairman has been replaced and this for sound and cogent business reasons.

4. As an investigative journalist you are surely aware of the covert activities of a handful of individuals who for their own purposes wish nothing more than to derail the Orthotouch process. These persons have no concern for the HS Investors and would rather see the assets in the hands of liquidators (no doubt for their own gain).

5. Though you are on record as saying that you are no lawyer, as an experienced journalist you must surely by now have studied and acquainted yourself with the Business Rescue Plan (“the Plan”) which has been in the Public Domain for over a year. It is abundantly clear therefore that to the extent that you quote the Plan incorrectly, or allow it to be misquoted in your blog, you do so deliberately. This of course brings both your personal motives and the integrity of your reporting into question.

6. Nowhere in the Plan does Nic Georgiou personally guarantee any payment. Zephan was asked to guarantee payment as certain properties were (and still are) registered in its name, and N Georgiou Trust was asked to do so as it is the sole shareholder in Zephan.

7. In your e-mail to Koutsoudis you suggested that Mr Georgiou should clarify his billionaire status as “it would be inadvisable for someone who is not a billionaire to ‘guarantee’ schemes worth multiples of billions”. This was a blatant endeavour to justify the sensationalistic spin which you create in your article by referring to Mr Georgiou as an “apparent billionaire” (a phrase which you seem to take pride of having personally penned if one reads your blog).

8. As far as your blog is concerned, you allowed to be published thereon a number of messages which are racist and/or defamatory and/or offensive. Some, submitted by the authors hereunder were removed by Moneyweb after complaints were made to you by Koutsoudis:

8.1. MOTORBIKEJONES;

8.2. Luthor_lionel;

8.3. dalavan;

8.4. grahamcr;

8.5. unePluiebreve;

8.6. dave (2 posts);

8.7. Ortotouch;

8.8. History; and

8.9. Mzansi Magic.

9. Today I checked your blog and found the following messages still appear thereon. I comment on each under the author as follows:

9.1. dg • 3 months ago

9.1.1. In the context of your article “they” can only be the Georgious or Orthotouch. Nowhere has there been any suggestion of “laundering money” and apart from being defamatory the only purpose of this comment is to create more sensationalism.

9.2. Kwe • 3 months ago

9.2.1. By no stretch of the imagination could Orthotouch or the Business Rescue be a Ponzi scheme. Another clear attempt at sensationalism.

9.3. sometime • 3 months ago

9.3.1. The Business Plan is clearly defined in the Business Rescue Plan. You took the time to clarify to Luther_lionel that the term “apparent billionaire” was penned by you. Did you not see fit to point out what the definition was of the Business Plan? Clearly you prefer the negativity of any statement made even one which is devoid of any substance or reason.

9.4. Sharemax Investor • 3 months ago

9.4.1. Who is Glynnis and what has she or Sharemax to do with Orthotouch or the Georgious? Yet again pure conjecture and sensationalism.

9.5. dube • 3 months ago

9.5.1. Yet again conjecture and sensationalism.

9.6. african dream • 3 months ago

9.6.1. All of which property?

9.7. Rietrot • 3 months ago

9.7.1. A reverse listing into a cash shell that couldn't make it in the first place????? Mr R3000/hr, for 22 hours a day????? Sensationalism in its purest form and to what end other than to demean the Georgious – and possibly derail a listing which benefits the HS Investors?

9.8. Pierre Hough • 4 days ago

9.8.1. This individual on this occasion has shed anonymity.

9.8.2. He is very well known and you no doubt know his reputation full well. You might in fact recall that I telephoned you some time earlier this year and told you about mr Hough’s interaction with me and how he told me one morning early during or about the second week of October 2011 upon me returning his that he was still in a Casino and that he was part of a Group to take over the South African Government within a month or two thereafter.

9.8.3. I will not elaborate further than to state that his “facts” are not correct, and his conclusions defamatory. It is significant that Moneyweb and you have chosen to associate yourselves with this post. Do you also state in regard to these “facts” that you have checked the contents thoroughly?

10. The covert actions above referred to have already caused substantial damages and claims are presently being formulated against those persons already identified. I find it disgusting that you as an investigative journalist for a reputable publication, and Moneyweb itself, endorse (without investigation of their veracity and despite the demeaning content) such offensive and damaging messages.

11. In due course the question will arise whether there is some underlying motive on your part or whether this is purely in an endeavor to increase your readership. In no way can it be suggested that the posts on this blog in any way serve the public interests.

12. All rights are reserved on behalf of Orthotouch, the Highveld Companies under Business Rescue, the individuals involved therein and not least of all the HS Investors.

Yours faithfully

J F KLOPPER

BUSINESS RESCUE PRACTITIONER

Property
Author: Julius Cobbett|
03 October 2012 23:13
Property mogul stumbles in R4.6bn syndication rescue

Nic Georgiou fails to transfer buildings worth billions.

JOHANNESBURG - A plan by apparent property billionaire Nic Georgiou to repay R4.6bn to about 18 000 investors has got off to an inauspicious start. Nine months into the plan, Georgiou has failed to transfer properties worth billions of rand to provide security to investors.

The rescue plan is for eight syndication schemes sold by Pickvest (formerly PIC Syndications). These syndication companies were placed under business rescue late last year. Investors accepted a proposal by Georgiou to repay them after five years. See: R4.6bn Pickvest rescue hinges on property billionaire.

Georgiou and his family own property jewels such as the Fourways Mall, Cedar Square, and Loch Logan Waterfront in Bloemfontein.

As part of the rescue plan, Georgiou was supposed to transfer properties worth billions of rand to a public company called Orthotouch. This would provide investors with some security should Georgiou fail to meet his obligations.

However, nine months after the rescue plan’s adoption, most, if not all, of the properties have not yet been transferred into Orthotouch’s name.

Orthotouch legal adviser Theo Koutsoudis has declined to comment on the failure to transfer properties. Says Koutsoudis: “I confirm that I am at this stage not authorised to divulge any information suffice it to state that the Business Rescue Plan is proceeding despite efforts to derail the process by persons pursuing their personal agendas.”

Moneyweb can also reveal that valuable properties that were supposed to be transferred to Orthotouch have been sold. The proceeds of these sales amount to more than R400m. Some of the larger properties sold include: Southdale Shopping Centre for R175m; 1 Centex Close, Sandton for R99m; Pembury Lodge for R45m; Safeside, Mpumalanga for R15m; and 5-7 Main Road, Melville for R13m.

Koutsoudis has similarly declined to comment on what money from the sales of the above properties was used for.

There has also been a shakeup at Orthotouch board level. Chairman Jannie Nel recently had his services terminated. Nel declined to comment on his departure from Orthotouch.

Nel’s departure leaves Orthotouch with four directors: Nic Georgiou, Panos Kleopvoulou, Hans Klopper and Connie Myburgh.

Under the rescue plan, Georgiou, through Orthotouch, promises to pay investors in the syndication companies a reduced monthly income for five years. At the end of the five-year period, Orthotouch promises to repay investors their full R4.6bn. See: Pickvest: Billionaire gets five years to repay investors.

The success of Orthotouch will depend on the directors’ ability to increase the net value of its property portfolio to R4.6bn after five years. Inflation will assist the directors with this task but will also erode the value of the final payment to investors.

There is a concern that by selling the buildings mentioned above, Georgiou is eroding the total value of the assets that are pledged to Orthotouch, reducing the likelihood that their net value will ever reach R4.6bn.

Prior to publication a copy of this article was sent to Koutsoudis. He was invited to correct possible factual errors and offer any comment he may have. Koutsoudis responded:

Dear Julius

Your draft article is fraught with inaccuracies and innuendos. Your quote from my email states clearly that the Business Plan is proceeding. It follows that all funds are being utilised in terms of the Business Plan. Your statement that "Koutsoudis has similarly declined to comment on what money from the sales of the above properties was used for" is clearly therefore inserted purely for sensationalistic reasons.

Neither I nor the Board are prepared to make any further comments at this time, and certainly not within the time you stipulate.

All our rights are reserved.

Yours sincerely
Theo Koutsoudis

On December 21, Moneyweb received the following letter from Orthotouch director Hans Klopper:

Dear Julius

HIGHVELD SYNDICATION 15 – 18 \ 20 – 22 LIMITED (UNDER BUSINESS RESCUE)

YOUR ARTICLE IN MONEYWEB OF 3 OCTOBER 2012 – PROPERTY MOGUL STUMBLES IN R4,6BN SYNDICATION RESCUE

1. Pursuant to previous correspondence (including that exchanged between yourself and Theo Koutsoudis). I address you hereunder in my capacity as a Director of Orthotouch and also as the Business Rescue Practitioner in the Highveld Syndication Companies.

2. Your above article was written after the draft thereof had been sent to Theo Koutsoudis for comment and he had written to you stating that it was “fraught with inaccuracies and innuendos”. You did not seek to change the article in any way and merely appended the letter written by Koutsoudis. Thereafter, on 15 October 2012 you advised me by e-mail that “the contents of the article were checked thoroughly”.

3. With respect, such contents could not have been checked thoroughly as a number of glaring inaccuracies appear therein, not least of all the following:

3.1. It is absolutely incorrect that “Investors accepted a proposal by Georgiou to repay them after five years”. After the Syndication Companies were placed under Business Rescue by their Directors, Orthotouch Limited (the shares in which are owned by Nic Georgiou through the NAG Trust) offered to purchase from them all their properties and rights to take transfer of properties on the basis that the price would be paid in 5 years and interest would be paid monthly. The Offer was included in the Plan which was accepted by an overwhelming majority of shareholders (in excess of 99% of more than 11500 out of 18 231 present or represented at the meeting of creditors).

3.2. The entire Plan was a bail-out of the HS Companies, which but for the Plan would have been liquidated with devastating losses for their Investors.

3.3. It is equally incorrect and misleading that “Georgiou was supposed to transfer properties worth billions of rand to a public company called Orthotouch”. Orthotouch has not had the cash resources to enable it to take transfer of the properties which are registered in HS15 to 18, or the rights to properties which vest in HS19 to 22. Orthotouch, in tems of the Plan, as at the date of its adoption, had a loan from Zephan Properties (Pty) Ltd of R1,6 billion of which R500 million was subordinated. The HS Companies and Zephan are and at all times were willing to transfer the properties and will complete the process when the resource of Orthotouch required to implement the transfer are in place.

3.4. As will clearly appear from the Plan it was always envisaged that properties would be sold and/or redeveloped.

3.5. The article states “Georgiou and his family own property jewels such as the Fourways Mall, Cedar Square, and Loch Logan Waterfront in Bloemfontein.” None of the properties mentioned above ever belonged to or were involved with Zephan and/or Orthotouch and/or any of the HS companies. There can be no reason whatsoever to mention these properties in this article other than to fuel sensationalism and speculation.

3.6. The report states “Moneyweb can also reveal that valuable properties that were supposed to be transferred to Orthotouch have been sold. The proceeds of these sales amount to more than R400m. Some of the larger properties sold include: Southdale Shopping Centre for R175m; 1 Centex Close, Sandton for R99m; Pembury Lodge for R45m; Safeside, Mpumalanga for R15m; and 5-7 Main Road, Melville for R13m.”

3.7. If one reads the Plan it is very clear that 1 Centex Close never formed part of the Business Rescue Plan in the first place. The report is also inaccurate in that The Southdale Sale only effectively realised about R160 m and Pembury Lodge had not at that date been transferred. Of more concern, the report fails to state that all proceeds are applied towards servicing the Zephan Loan and the other expenses of Orhotouch including the servicing of the post commencement finance, interest and operating costs. This was dealt with in my report to all investors dated 13th August 2012 and that is on our website.

3.8. The books and records of Orthotouch are kept properly and are audited by Grant Thornton (formerly BDO of Pretoria).

3.9. Indeed the former Chairman has been replaced and this for sound and cogent business reasons.

4. As an investigative journalist you are surely aware of the covert activities of a handful of individuals who for their own purposes wish nothing more than to derail the Orthotouch process. These persons have no concern for the HS Investors and would rather see the assets in the hands of liquidators (no doubt for their own gain).

5. Though you are on record as saying that you are no lawyer, as an experienced journalist you must surely by now have studied and acquainted yourself with the Business Rescue Plan (“the Plan”) which has been in the Public Domain for over a year. It is abundantly clear therefore that to the extent that you quote the Plan incorrectly, or allow it to be misquoted in your blog, you do so deliberately. This of course brings both your personal motives and the integrity of your reporting into question.

6. Nowhere in the Plan does Nic Georgiou personally guarantee any payment. Zephan was asked to guarantee payment as certain properties were (and still are) registered in its name, and N Georgiou Trust was asked to do so as it is the sole shareholder in Zephan.

7. In your e-mail to Koutsoudis you suggested that Mr Georgiou should clarify his billionaire status as “it would be inadvisable for someone who is not a billionaire to ‘guarantee’ schemes worth multiples of billions”. This was a blatant endeavour to justify the sensationalistic spin which you create in your article by referring to Mr Georgiou as an “apparent billionaire” (a phrase which you seem to take pride of having personally penned if one reads your blog).

8. As far as your blog is concerned, you allowed to be published thereon a number of messages which are racist and/or defamatory and/or offensive. Some, submitted by the authors hereunder were removed by Moneyweb after complaints were made to you by Koutsoudis:

8.1. MOTORBIKEJONES;

8.2. Luthor_lionel;

8.3. dalavan;

8.4. grahamcr;

8.5. unePluiebreve;

8.6. dave (2 posts);

8.7. Ortotouch;

8.8. History; and

8.9. Mzansi Magic.

9. Today I checked your blog and found the following messages still appear thereon. I comment on each under the author as follows:

9.1. dg • 3 months ago

9.1.1. In the context of your article “they” can only be the Georgious or Orthotouch. Nowhere has there been any suggestion of “laundering money” and apart from being defamatory the only purpose of this comment is to create more sensationalism.

9.2. Kwe • 3 months ago

9.2.1. By no stretch of the imagination could Orthotouch or the Business Rescue be a Ponzi scheme. Another clear attempt at sensationalism.

9.3. sometime • 3 months ago

9.3.1. The Business Plan is clearly defined in the Business Rescue Plan. You took the time to clarify to Luther_lionel that the term “apparent billionaire” was penned by you. Did you not see fit to point out what the definition was of the Business Plan? Clearly you prefer the negativity of any statement made even one which is devoid of any substance or reason.

9.4. Sharemax Investor • 3 months ago

9.4.1. Who is Glynnis and what has she or Sharemax to do with Orthotouch or the Georgious? Yet again pure conjecture and sensationalism.

9.5. dube • 3 months ago

9.5.1. Yet again conjecture and sensationalism.

9.6. african dream • 3 months ago

9.6.1. All of which property?

9.7. Rietrot • 3 months ago

9.7.1. A reverse listing into a cash shell that couldn't make it in the first place????? Mr R3000/hr, for 22 hours a day????? Sensationalism in its purest form and to what end other than to demean the Georgious – and possibly derail a listing which benefits the HS Investors?

9.8. Pierre Hough • 4 days ago

9.8.1. This individual on this occasion has shed anonymity.

9.8.2. He is very well known and you no doubt know his reputation full well. You might in fact recall that I telephoned you some time earlier this year and told you about mr Hough’s interaction with me and how he told me one morning early during or about the second week of October 2011 upon me returning his that he was still in a Casino and that he was part of a Group to take over the South African Government within a month or two thereafter.

9.8.3. I will not elaborate further than to state that his “facts” are not correct, and his conclusions defamatory. It is significant that Moneyweb and you have chosen to associate yourselves with this post. Do you also state in regard to these “facts” that you have checked the contents thoroughly?

10. The covert actions above referred to have already caused substantial damages and claims are presently being formulated against those persons already identified. I find it disgusting that you as an investigative journalist for a reputable publication, and Moneyweb itself, endorse (without investigation of their veracity and despite the demeaning content) such offensive and damaging messages.

11. In due course the question will arise whether there is some underlying motive on your part or whether this is purely in an endeavor to increase your readership. In no way can it be suggested that the posts on this blog in any way serve the public interests.

12. All rights are reserved on behalf of Orthotouch, the Highveld Companies under Business Rescue, the individuals involved therein and not least of all the HS Investors.

Yours faithfully

J F KLOPPER

BUSINESS RESCUE PRACTITIONER




Right of reply
Author: Hans Klopper|
24 December 2012 09:34
Pickvest: Moneyweb got it wrong, says business rescue practitioner

Hans Klopper responds to an article on the rescue of Pickvest syndication companies.

Orthotouch director and business rescue practitioner of the Highveld syndication companies Hans Klopper has responded to a Moneyweb article published on October 3, 2012. The article can be read here: Property mogul stumbles in R4.6bn syndication rescue.

Dear Julius

HIGHVELD SYNDICATION 15 – 18 \ 20 – 22 LIMITED (UNDER BUSINESS RESCUE)

YOUR ARTICLE IN MONEYWEB OF 3 OCTOBER 2012 – PROPERTY MOGUL STUMBLES IN R4,6BN SYNDICATION RESCUE

1. Pursuant to previous correspondence (including that exchanged between yourself and Theo Koutsoudis). I address you hereunder in my capacity as a Director of Orthotouch and also as the Business Rescue Practitioner in the Highveld Syndication Companies.

2. Your above article was written after the draft thereof had been sent to Theo Koutsoudis for comment and he had written to you stating that it was “fraught with inaccuracies and innuendos”. You did not seek to change the article in any way and merely appended the letter written by Koutsoudis. Thereafter, on 15 October 2012 you advised me by e-mail that “the contents of the article were checked thoroughly”.

3. With respect, such contents could not have been checked thoroughly as a number of glaring inaccuracies appear therein, not least of all the following:

3.1. It is absolutely incorrect that “Investors accepted a proposal by Georgiou to repay them after five years”. After the Syndication Companies were placed under Business Rescue by their Directors, Orthotouch Limited (the shares in which are owned by Nic Georgiou through the NAG Trust) offered to purchase from them all their properties and rights to take transfer of properties on the basis that the price would be paid in 5 years and interest would be paid monthly. The Offer was included in the Plan which was accepted by an overwhelming majority of shareholders (in excess of 99% of more than 11500 out of 18 231 present or represented at the meeting of creditors).

3.2. The entire Plan was a bail-out of the HS Companies, which but for the Plan would have been liquidated with devastating losses for their Investors.

3.3. It is equally incorrect and misleading that “Georgiou was supposed to transfer properties worth billions of rand to a public company called Orthotouch”. Orthotouch has not had the cash resources to enable it to take transfer of the properties which are registered in HS15 to 18, or the rights to properties which vest in HS19 to 22. Orthotouch, in tems of the Plan, as at the date of its adoption, had a loan from Zephan Properties (Pty) Ltd of R1,6 billion of which R500 million was subordinated. The HS Companies and Zephan are and at all times were willing to transfer the properties and will complete the process when the resource of Orthotouch required to implement the transfer are in place.

3.4. As will clearly appear from the Plan it was always envisaged that properties would be sold and/or redeveloped.

3.5. The article states “Georgiou and his family own property jewels such as the Fourways Mall, Cedar Square, and Loch Logan Waterfront in Bloemfontein.” None of the properties mentioned above ever belonged to or were involved with Zephan and/or Orthotouch and/or any of the HS companies. There can be no reason whatsoever to mention these properties in this article other than to fuel sensationalism and speculation.

3.6. The report states “Moneyweb can also reveal that valuable properties that were supposed to be transferred to Orthotouch have been sold. The proceeds of these sales amount to more than R400m. Some of the larger properties sold include: Southdale Shopping Centre for R175m; 1 Centex Close, Sandton for R99m; Pembury Lodge for R45m; Safeside, Mpumalanga for R15m; and 5-7 Main Road, Melville for R13m.”

3.7. If one reads the Plan it is very clear that 1 Centex Close never formed part of the Business Rescue Plan in the first place. The report is also inaccurate in that The Southdale Sale only effectively realised about R160 m and Pembury Lodge had not at that date been transferred. Of more concern, the report fails to state that all proceeds are applied towards servicing the Zephan Loan and the other expenses of Orhotouch including the servicing of the post commencement finance, interest and operating costs. This was dealt with in my report to all investors dated 13th August 2012 and that is on our website.

3.8. The books and records of Orthotouch are kept properly and are audited by Grant Thornton (formerly BDO of Pretoria).

3.9. Indeed the former Chairman has been replaced and this for sound and cogent business reasons.

4. As an investigative journalist you are surely aware of the covert activities of a handful of individuals who for their own purposes wish nothing more than to derail the Orthotouch process. These persons have no concern for the HS Investors and would rather see the assets in the hands of liquidators (no doubt for their own gain).

5. Though you are on record as saying that you are no lawyer, as an experienced journalist you must surely by now have studied and acquainted yourself with the Business Rescue Plan (“the Plan”) which has been in the Public Domain for over a year. It is abundantly clear therefore that to the extent that you quote the Plan incorrectly, or allow it to be misquoted in your blog, you do so deliberately. This of course brings both your personal motives and the integrity of your reporting into question.

6. Nowhere in the Plan does Nic Georgiou personally guarantee any payment. Zephan was asked to guarantee payment as certain properties were (and still are) registered in its name, and N Georgiou Trust was asked to do so as it is the sole shareholder in Zephan.

7. In your e-mail to Koutsoudis you suggested that Mr Georgiou should clarify his billionaire status as “it would be inadvisable for someone who is not a billionaire to ‘guarantee’ schemes worth multiples of billions”. This was a blatant endeavour to justify the sensationalistic spin which you create in your article by referring to Mr Georgiou as an “apparent billionaire” (a phrase which you seem to take pride of having personally penned if one reads your blog).

8. As far as your blog is concerned, you allowed to be published thereon a number of messages which are racist and/or defamatory and/or offensive. Some, submitted by the authors hereunder were removed by Moneyweb after complaints were made to you by Koutsoudis:

8.1. MOTORBIKEJONES;

8.2. Luthor_lionel;

8.3. dalavan;

8.4. grahamcr;

8.5. unePluiebreve;

8.6. dave (2 posts);

8.7. Ortotouch;

8.8. History; and

8.9. Mzansi Magic.

9. Today I checked your blog and found the following messages still appear thereon. I comment on each under the author as follows:

9.1. dg • 3 months ago

9.1.1. In the context of your article “they” can only be the Georgious or Orthotouch. Nowhere has there been any suggestion of “laundering money” and apart from being defamatory the only purpose of this comment is to create more sensationalism.

9.2. Kwe • 3 months ago

9.2.1. By no stretch of the imagination could Orthotouch or the Business Rescue be a Ponzi scheme. Another clear attempt at sensationalism.

9.3. sometime • 3 months ago

9.3.1. The Business Plan is clearly defined in the Business Rescue Plan. You took the time to clarify to Luther_lionel that the term “apparent billionaire” was penned by you. Did you not see fit to point out what the definition was of the Business Plan? Clearly you prefer the negativity of any statement made even one which is devoid of any substance or reason.

9.4. Sharemax Investor • 3 months ago

9.4.1. Who is Glynnis and what has she or Sharemax to do with Orthotouch or the Georgious? Yet again pure conjecture and sensationalism.

9.5. dube • 3 months ago

9.5.1. Yet again conjecture and sensationalism.

9.6. african dream • 3 months ago

9.6.1. All of which property?

9.7. Rietrot • 3 months ago

9.7.1. A reverse listing into a cash shell that couldn't make it in the first place????? Mr R3000/hr, for 22 hours a day????? Sensationalism in its purest form and to what end other than to demean the Georgious – and possibly derail a listing which benefits the HS Investors?

9.8. Pierre Hough • 4 days ago

9.8.1. This individual on this occasion has shed anonymity.

9.8.2. He is very well known and you no doubt know his reputation full well. You might in fact recall that I telephoned you some time earlier this year and told you about mr Hough’s interaction with me and how he told me one morning early during or about the second week of October 2011 upon me returning his that he was still in a Casino and that he was part of a Group to take over the South African Government within a month or two thereafter.

9.8.3. I will not elaborate further than to state that his “facts” are not correct, and his conclusions defamatory. It is significant that Moneyweb and you have chosen to associate yourselves with this post. Do you also state in regard to these “facts” that you have checked the contents thoroughly?

10. The covert actions above referred to have already caused substantial damages and claims are presently being formulated against those persons already identified. I find it disgusting that you as an investigative journalist for a reputable publication, and Moneyweb itself, endorse (without investigation of their veracity and despite the demeaning content) such offensive and damaging messages.

11. In due course the question will arise whether there is some underlying motive on your part or whether this is purely in an endeavor to increase your readership. In no way can it be suggested that the posts on this blog in any way serve the public interests.

12. All rights are reserved on behalf of Orthotouch, the Highveld Companies under Business Rescue, the individuals involved therein and not least of all the HS Investors.

Yours faithfully

J F KLOPPER

BUSINESS RESCUE PRACTITIONER



Right of reply


Author: Hans Klopper|

24 December 2012 09:34

Pickvest: Moneyweb got it wrong, says business rescue practitioner

Hans Klopper responds to an article on the rescue of Pickvest syndication companies.

Orthotouch director and business rescue practitioner of the Highveld syndication companies Hans Klopper has responded to a Moneyweb article published on October 3, 2012. The article can be read here: Property mogul stumbles in R4.6bn syndication rescue.

Dear Julius

HIGHVELD SYNDICATION 15 – 18 \ 20 – 22 LIMITED (UNDER BUSINESS RESCUE)

YOUR ARTICLE IN MONEYWEB OF 3 OCTOBER 2012 – PROPERTY MOGUL STUMBLES IN R4,6BN SYNDICATION RESCUE

1. Pursuant to previous correspondence (including that exchanged between yourself and Theo Koutsoudis). I address you hereunder in my capacity as a Director of Orthotouch and also as the Business Rescue Practitioner in the Highveld Syndication Companies.

2. Your above article was written after the draft thereof had been sent to Theo Koutsoudis for comment and he had written to you stating that it was “fraught with inaccuracies and innuendos”. You did not seek to change the article in any way and merely appended the letter written by Koutsoudis. Thereafter, on 15 October 2012 you advised me by e-mail that “the contents of the article were checked thoroughly”.

3. With respect, such contents could not have been checked thoroughly as a number of glaring inaccuracies appear therein, not least of all the following:

3.1. It is absolutely incorrect that “Investors accepted a proposal by Georgiou to repay them after five years”. After the Syndication Companies were placed under Business Rescue by their Directors, Orthotouch Limited (the shares in which are owned by Nic Georgiou through the NAG Trust) offered to purchase from them all their properties and rights to take transfer of properties on the basis that the price would be paid in 5 years and interest would be paid monthly. The Offer was included in the Plan which was accepted by an overwhelming majority of shareholders (in excess of 99% of more than 11500 out of 18 231 present or represented at the meeting of creditors).

3.2. The entire Plan was a bail-out of the HS Companies, which but for the Plan would have been liquidated with devastating losses for their Investors.

3.3. It is equally incorrect and misleading that “Georgiou was supposed to transfer properties worth billions of rand to a public company called Orthotouch”. Orthotouch has not had the cash resources to enable it to take transfer of the properties which are registered in HS15 to 18, or the rights to properties which vest in HS19 to 22. Orthotouch, in tems of the Plan, as at the date of its adoption, had a loan from Zephan Properties (Pty) Ltd of R1,6 billion of which R500 million was subordinated. The HS Companies and Zephan are and at all times were willing to transfer the properties and will complete the process when the resource of Orthotouch required to implement the transfer are in place.

3.4. As will clearly appear from the Plan it was always envisaged that properties would be sold and/or redeveloped.

3.5. The article states “Georgiou and his family own property jewels such as the Fourways Mall, Cedar Square, and Loch Logan Waterfront in Bloemfontein.” None of the properties mentioned above ever belonged to or were involved with Zephan and/or Orthotouch and/or any of the HS companies. There can be no reason whatsoever to mention these properties in this article other than to fuel sensationalism and speculation.

3.6. The report states “Moneyweb can also reveal that valuable properties that were supposed to be transferred to Orthotouch have been sold. The proceeds of these sales amount to more than R400m. Some of the larger properties sold include: Southdale Shopping Centre for R175m; 1 Centex Close, Sandton for R99m; Pembury Lodge for R45m; Safeside, Mpumalanga for R15m; and 5-7 Main Road, Melville for R13m.”

3.7. If one reads the Plan it is very clear that 1 Centex Close never formed part of the Business Rescue Plan in the first place. The report is also inaccurate in that The Southdale Sale only effectively realised about R160 m and Pembury Lodge had not at that date been transferred. Of more concern, the report fails to state that all proceeds are applied towards servicing the Zephan Loan and the other expenses of Orhotouch including the servicing of the post commencement finance, interest and operating costs. This was dealt with in my report to all investors dated 13th August 2012 and that is on our website.

3.8. The books and records of Orthotouch are kept properly and are audited by Grant Thornton (formerly BDO of Pretoria).

3.9. Indeed the former Chairman has been replaced and this for sound and cogent business reasons.

4. As an investigative journalist you are surely aware of the covert activities of a handful of individuals who for their own purposes wish nothing more than to derail the Orthotouch process. These persons have no concern for the HS Investors and would rather see the assets in the hands of liquidators (no doubt for their own gain).

5. Though you are on record as saying that you are no lawyer, as an experienced journalist you must surely by now have studied and acquainted yourself with the Business Rescue Plan (“the Plan”) which has been in the Public Domain for over a year. It is abundantly clear therefore that to the extent that you quote the Plan incorrectly, or allow it to be misquoted in your blog, you do so deliberately. This of course brings both your personal motives and the integrity of your reporting into question.

6. Nowhere in the Plan does Nic Georgiou personally guarantee any payment. Zephan was asked to guarantee payment as certain properties were (and still are) registered in its name, and N Georgiou Trust was asked to do so as it is the sole shareholder in Zephan.

7. In your e-mail to Koutsoudis you suggested that Mr Georgiou should clarify his billionaire status as “it would be inadvisable for someone who is not a billionaire to ‘guarantee’ schemes worth multiples of billions”. This was a blatant endeavour to justify the sensationalistic spin which you create in your article by referring to Mr Georgiou as an “apparent billionaire” (a phrase which you seem to take pride of having personally penned if one reads your blog).

8. As far as your blog is concerned, you allowed to be published thereon a number of messages which are racist and/or defamatory and/or offensive. Some, submitted by the authors hereunder were removed by Moneyweb after complaints were made to you by Koutsoudis:

8.1. MOTORBIKEJONES;

8.2. Luthor_lionel;

8.3. dalavan;

8.4. grahamcr;

8.5. unePluiebreve;

8.6. dave (2 posts);

8.7. Ortotouch;

8.8. History; and

8.9. Mzansi Magic.

9. Today I checked your blog and found the following messages still appear thereon. I comment on each under the author as follows:

9.1. dg • 3 months ago

9.1.1. In the context of your article “they” can only be the Georgious or Orthotouch. Nowhere has there been any suggestion of “laundering money” and apart from being defamatory the only purpose of this comment is to create more sensationalism.

9.2. Kwe • 3 months ago

9.2.1. By no stretch of the imagination could Orthotouch or the Business Rescue be a Ponzi scheme. Another clear attempt at sensationalism.

9.3. sometime • 3 months ago

9.3.1. The Business Plan is clearly defined in the Business Rescue Plan. You took the time to clarify to Luther_lionel that the term “apparent billionaire” was penned by you. Did you not see fit to point out what the definition was of the Business Plan? Clearly you prefer the negativity of any statement made even one which is devoid of any substance or reason.

9.4. Sharemax Investor • 3 months ago

9.4.1. Who is Glynnis and what has she or Sharemax to do with Orthotouch or the Georgious? Yet again pure conjecture and sensationalism.

9.5. dube • 3 months ago

9.5.1. Yet again conjecture and sensationalism.

9.6. african dream • 3 months ago

9.6.1. All of which property?

9.7. Rietrot • 3 months ago

9.7.1. A reverse listing into a cash shell that couldn't make it in the first place????? Mr R3000/hr, for 22 hours a day????? Sensationalism in its purest form and to what end other than to demean the Georgious – and possibly derail a listing which benefits the HS Investors?

9.8. Pierre Hough • 4 days ago

9.8.1. This individual on this occasion has shed anonymity.

9.8.2. He is very well known and you no doubt know his reputation full well. You might in fact recall that I telephoned you some time earlier this year and told you about mr Hough’s interaction with me and how he told me one morning early during or about the second week of October 2011 upon me returning his that he was still in a Casino and that he was part of a Group to take over the South African Government within a month or two thereafter.

9.8.3. I will not elaborate further than to state that his “facts” are not correct, and his conclusions defamatory. It is significant that Moneyweb and you have chosen to associate yourselves with this post. Do you also state in regard to these “facts” that you have checked the contents thoroughly?

10. The covert actions above referred to have already caused substantial damages and claims are presently being formulated against those persons already identified. I find it disgusting that you as an investigative journalist for a reputable publication, and Moneyweb itself, endorse (without investigation of their veracity and despite the demeaning content) such offensive and damaging messages.

11. In due course the question will arise whether there is some underlying motive on your part or whether this is purely in an endeavor to increase your readership. In no way can it be suggested that the posts on this blog in any way serve the public interests.

12. All rights are reserved on behalf of Orthotouch, the Highveld Companies under Business Rescue, the individuals involved therein and not least of all the HS Investors.

Yours faithfully

J F KLOPPER

BUSINESS RESCUE PRACTITIONER



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



LEGAL ISSUES: Report published in 2011

Author: Julius Cobbett|
19 July 2011 03:44
Did Pickvest break the law?



Was it illegal for attorney to release up to R3.5bn in investors’ money?

JOHANNESBURG - Did the directors of Pickvest (formerly Picvest and PIC Syndications) and their attorney break the law? They allowed up to R3.5bn of their investors’ money to be released before properties were transferred into the syndication vehicle. This has left the investors in the precarious position of owning no property, as reported by Moneyweb on April 11 this year.

To release investors’ money prior to the transfer of properties is an apparent contravention of a March 2006 notice issued by then Department of Trade and Industry Minister Mandisi Mpahlwa. A copy of the notice can be downloaded here.

The notice states that funds received from property syndication investors must be placed into a trust account that is protected by legislation. “Funds shall only be withdrawn from the trust account in the event of registration of the transfer of the property into the syndication vehicle...”

Funds received from investors in Pickvest’s four most recent syndications, Highveld 19-22, were paid into the trust account of attorney Eugene Kruger. This money was released to the seller of the properties, Nic Georgiou, before transfer had taken place. The earliest of these syndications, Highveld 19, was sold to investors in January 2007. The latest, Highveld 22, was sold in August 2010.

There has been ample time for the buildings to be transferred to investors but this has still not happened. The transfers have since been put on ice while investors consider whether they wish to accept a restructure proposal put to them by Georgiou.

Pickvest CEO Rikus Myburgh denies that his company and its lawyer has broken the law by releasing investor funds.

He says: “The [notice] only relates to property syndications by way of private placing, governed by Consumer Affairs Act, by any means other than through a registered prospectus, governed by the Companies Act. All the Picvest prospectuses were correctly and fully registered at the Department of Trade and Industry at the relevant time.”

Myburgh has not provided Moneyweb with any independent legal opinion that supports Pickvest’s interpretation of the notice.

Moneyweb asked the Department of Trade and Industry (DTI), which issued the notice, whether it agrees with Myburgh’s interpretation.

Aubrey Mathope, who heads the DTI’s Consumer and Corporate Regulation Division, tells Moneyweb that the notice applies to any entity that falls under the definition “public property syndication scheme”.

The definition* does not exclude syndication schemes sold through a prospectus.

Mathope advises investors who wish to complain about the transfer of their funds to contact the National Consumer Commission at ncc@thedti.co.za or 0860 266 786 .

One man who is convinced that Pickvest broke the law is business strategist Pierre Hough. He claims to have assisted two clients to get a full refund from Pickvest, with interest, after he threatened to lay charges against the company.

Hough says he sent a letter of demand to Pickvest in September last year, in which he accused the company of breaching the Banks Act, as well as the DTI notice.

“PIC promptly responded by repaying two of my clients money instead of facing the charges I was going to file against them and their attorney Eugene Kruger in Pretoria.”

When Moneyweb alerted Myburgh to Hough’s claims, he denied knowledge of any investors being refunded. However, when Moneyweb provided Myburgh with specific details of the refunds, he claimed that the investors referred to “were not refunded but their shares had been re-sold to other investors”.

However, this response is hard for Hough to swallow. For one thing, if the shares were sold through normal channels, they would have to have been sold at a healthy profit. That’s because Pickvest investors who sell their shares are liable for 10.5% fee to Pickvest.

But Hough’s clients received their full investment amount back, with interest. If the 10.5% fee was paid, it was not by them. Furthermore, the money they received came directly from Eugene Kruger’s trust account. Hough even claims that the interest calculations were done by one Sanja Elzerman in Kruger’s offices.

Myburgh maintains that the shares “were sold under standard re-sale procedures, ie supply and demand”.

Moneyweb’s efforts to obtain a respected legal opinion on whether Pickvest breached the DTI notice have so far proven fruitless. We welcome correspondence from any legal experts who have an opinion on the matter.

*According to the Gazette, “‘public property syndication scheme’ means the assembly of a group of investors invited, by word of mouth or through the use of electronic and print media, inter alia, radio, television, telephone, newspaper and magazine advertising, brochures and direct mail, to participate in such schemes by investing in entities which could be companies close corporations, trusts, partnerships or individuals, whose sole asset(s) are commercial, retail, industrial or residential properties, and where the investors share in the profits and losses in these properties and or enjoy the benefits of net rental growth therefrom through proportionate share of income.”

Last week a copy of this article was sent to Pickvest for its comment. Director Derik Reichel acknowledged receipt, but no response had been received by Monday. After publication, we received the following cryptic reply from Myburgh:

Dear Julius,

Thank you for stepping right into the trap. We are looking forward to the opportunity with same exposure to rectify your blunder, as promised by Alec.

Kind regards,

Rikus