Tuesday, September 30, 2014

Right of response: Department of Environmental Affairs is not shirking its responsibilities

No Fear No Favour No Animal Poachers accepted here......

Edna Molewa (Life etc)   29 September 2014 09:47  (SOUTH AFRICA)

A recent op-ed by Karen Trendler took on the rights and living conditions of elephants in South Africa, as well as some upcoming proposals by the Department of Environmental Affairs. Here, as is her right and in the interest of open debate, the Minister, EDNA MOLEWA, offers her response.

The analysis of the Department of Environmental Affairs’ Norms and Standards policies with regards to elephants (‘Molewa takes aim at wild elephants’; Daily Maverick 17 September 2014) carries an emotive and loaded headline – but also belies a misunderstanding of the department’s mandate and responsibilities with regards to these animals.
It is incorrect to state that the DEA has abandoned key provisions of the Norms and Standards for the management of elephants in South Africa; and that recent amendments could “overturn the founding principles of the 2008 norms”.
At issue here is the question of mandate; and whether the DEA, as a body charged with conservation, is legally able to enforce matters relating to animal welfare.
In terms of the National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004) (NEMBA) the Department of Environmental Affairs does not have the legislative mandate to regulate matters relating to animal welfare.
A judgment of the Supreme Court of Appeal - SA Predator Breeders Association (SAPBA) v Minister of Environmental Affairs (29 November 2010) upheld this restriction.
In the case in question, the court found that the Minister of Environmental Affairs, inter alia, did not have the legislative mandate to regulate ethical or animal welfare matters, or issues not related to conservation.
As a result, I may only regulate activities of a nature that they may negatively impact on the survival of listed threatened or protected species.
However, I am legally mandated in terms of NEMBA to ensure, among others, the “protection of species that are threatened or in need of protection to ensure their survival in the wild”, and “that the utilisation of biodiversity is managed in an ecologically sustainable way”.
The Norms and Standards, adopted in May 2008 are regularly reviewed and where necessary, updated or amended every four years. It is worth noting that proposed amendments to the Norms and Standards are not unique: but form part of the regular process of revision of departmental regulations, in response to prevailing conditions.
For example, since the latest Elephant Norms and Standards came into effect, the DEA has become aware of implementation and enforcement challenges facing owners and managers of elephants, but also conservation authorities.
These include requirements relating to an elephant management plan, as well as lack of clarity regarding who is responsible to develop a management plan for a roaming (wild) elephant - in instances where its origin cannot readily be determined. In addition, certain provisions do not adequately specify whether they apply to wild or captive elephants.
To address these potential problems and streamline the implementation process, the DEA convened a general stakeholder consultation workshop on 12 August 2014. Additional challenges were identified at this workshop, including but not limited to methods for euthanasia, as well as issues of alignment with provisions of the Threatened or Protected Species (TOPS) Regulations involving elephants.
Discussions from this workshop as well as submissions received from stakeholders will inform subsequent amendments to the Elephant Norms and Standards. The draft revised Norms and Standards will be gazetted in 2015, providing further opportunity for interested and affected parties to participate in the process.
Daily Maverick readers should note that the welfare of both domestic and wild animals is regulated by two other Acts of Parliament, namely the Animals Protection Act, 1962 (Act No. 71 of 1962) and the Performing Animals Protection Act, 1935 (Act No. 24 of 1935 as amended).
Both these acts fall under the administration of the Minister of Agriculture, Forestry and Fisheries.
To ensure that the well-being of elephants in captivity is adequately addressed, the Department of Agriculture, Forestry and Fisheries has been requested to assist by publishing the draft Minimum Standards for the management of captive elephants in terms of the Animals Protection Act, 1962.
We are neither shirking our responsibilities nor are we “removing” or “overturning” any critical provisions in our laws relating to the welfare of animals - because they are simply difficult to enforce or implement. We are merely bringing them in line with the legislative mandate of the Minister of Environmental Affairs. DM
Edna Molewa is Minister of Environmental Affairs.
Photo: Some of the first 40 elephants wander round in the bush after being released into newly-named Great Limpopo Transfrontier Park in Gaza Mozambique, 04 October 2001. The 35,000 square kilometer park is a cross-border game reserve between South Africa, Mozambique and Zimbabwe. EPA PHOTO AP POOL/THEMBA HADEBE



Conservation specialist Karen Trendler says wildlife crimes are highly tactical. Credit: Gerry van der Walt/WildEye

JOHANNESBURG – The Endangered Wildlife Trust says the arrest of 10 members of a rhino poaching syndicate is an indication of how highly organised criminals have become.
They are expected to appear in the Hatfield Magistrates Court tomorrow.
Over the last five years, the syndicate has reportedly obtained over 84 horns worth nearly R22 million.
Others involved include a Hawks official, a pilot and an attorney.
Conservation specialist Karen Trendler says wildlife crimes are highly tactical.
"These aren’t just people who are shooting a rhino because they don’t have money and they need to feed their family. This is highly organised crime with mass profitability.”
(Edited by Victoria Campbell-Gillies)



Abraham Smit was arrested two weeks ago by the Hawks after apparently evading American authorities.

Trudie Ras, Jacobus Steyn and Abraham Smit, who are allegedly members of a rhino poaching syndicate illegally acquired an estimated R22 million worth of rhino horns. Picture: Valeska Abreu/EWN

JOHANNESBURG - One of 10 people accused of being part ofmultimillion rand alleged rhino poaching syndicate is also wanted by Interpol.

Abraham Smit, who is also known as Arno Smit by people whom he allegedly conned in America, was arrested two weeks ago by the Hawks after apparently evading American authorities for four years in connection with fraud charges.

He is bringing forward a bail application in the Pretoria Magistrates Court, along with four other people while the remaining six have decided to postpone their applications until next week.

Details of an Interpol warrant of arrest for Smit emerged yesterday with the state expected to place it on record when the bail application continues.

He now faces a list of charges in this country relating to organised crime and racketeering for his alleged involvement in the rhino poaching syndicate said to be the biggest and most violent in the country. 

In his affidavit read in court during his bail application, Smit stated that he previously lived and worked in America, but had no pending cases or charges against him. 

It's expected that the state will place the Interpol warrant on record today.

Meanwhile, animal activists who attended yesterday's proceedings say bail for all of the accused should be denied. 

Miranda Friedman from Activists for Animals Africa said, “The fact is that there may not be harmful to another human being, but to other rhino.”

Smit and two others, including the alleged kingpin's wife, is facing a schedule five offence while anther suspect, Jacobus 'Bonnie' Steyn, is facing a schedule one offence. 

An American TV news Network is reporting that Smit was a major con man who scammed people out of millions. 

It's understood one of the woman he conned was met on an internet dating site for millionaires. 

(Edited by Gadeeja Abbas)






Monday, September 22, 2014

Pickvest directors acted dishonestly – FSB

Moneyweb News
Special Investigations

Author: Hanna Barry|

22 September 2014 00:22

Pickvest directors acted dishonestly – FSB

Appeal dismissal raises serious questions.

Directors of property syndication promoter Pickvest have launched an application in the Pretoria High Court to have an incriminating determination by the Financial Services Board (FSB) reviewed and set aside.

The decision, which was made in February by the FSB’s Appeal Board, found that Pickvest’s directors acted dishonestly and without the care, skill and diligence expected of financial services providers (FSP) under the Financial Advisory and Intermediary Services (FAIS) Act.

This formed the basis of the Appeal Board’s dismissal of Pickvest’s appeal against an April 2013 decision by the board’s Registrar of Financial Services Providers to have its FSP licence withdrawn.

The Registrar withdrew Pickvest’s licence last year because it said the decision by the company’s directors (among them Durand Botha, brother of Sharemax mastermind Willie) to use investors’ money to pay for properties without first taking transfer of these properties amounted to a failure “to meet the personal standard of honesty and integrity required by s 8 of the [FAIS] Act of a fit and proper financial services provider”.

Pickvest promoted 22 different property syndication schemes known as Highveld Syndications (HS), a number of which are now under business rescue. Investors bought units (a mixture of shares and loan accounts) in any one of the HS companies by depositing money into the trust account of Pretoria attorneys Eugene Kruger & Co. Incorporated.

The FSB says the agreements signed by investors in response to the prospectus of HS 21 made no provision for the property syndication’s obligation to secure transfer of properties before withdrawing money from the trust account to purchase them. It thereby contravened a 2006 Department of Trade and Industry (dti) Notice gazetted in terms of the Unfair Business Practices Act (formerly the Consumer Affairs Act), which stipulates that investor funds can only be withdrawn from a trust account in the event of transfer of the property.

Pickvest claimed that Kruger advised it that the notice did not apply to them. The reasons given by Kruger for this opinion were chiefly that the dti continued to register company prospectuses after March 2006 even where these contained provisions that were not in accordance with the notice in question.

However, the FSB says it is plain that “any company which is a syndication promoter falls within the ambit of the notice”. The fact that registrations were affected by dti officials as Kruger points out “is of no moment”, according to the board, since these proclaim only the fact of registration and are not an expression of departmental approval.

That Pickvest’s prospectus in respect of HS 21 said nothing of the need to ensure transfer of properties before paying for them “obviously failed” to meet the requirements of the notice and “therefore failed to provide investor protection from the sort of outcome which eventuated”, the FSB says. This outcome is that “investors involved had bought shares in companies that were not, after all, the owners of the properties which were due to provide them with the promised returns on their investments. In short, they were left with tenuous rights of questionable, if any, value,” the Appeal Board’s ruling states.

FSB not investigating Pickvest further

The FSB says it is likely that the directors of Pickvest were aware of the relevant provisions in the notice and it is insufficient for them to “shelter behind what could have been nothing more than a brief oral assertion by Mr Kruger”. The board finds that Pickvest’s directors acted with a “dishonest state of mind” in their withdrawal of investors’ funds and “consciously closed their minds to pursuing lines of enquiry which could have informed them better but which would also have demonstrated to them that what they chose to believe was in fact and law mistaken”.

It is not clear how much money was withdrawn from Kruger’s trust account, but the FSB concludes it involved “a substantial sum” since HS 21 had more than R1 billion invested in it.

Caroline da Silva, deputy executive officer for FAIS at the FSB, says that the outcome of the review application with the High Court may determine whether there are grounds for claims against Pickvest and whether agreements signed by investors are null and void because they did not comply with the dti’s notice. According to the FSB, non-compliance with the notice constitutes a criminal offence punishable by way of a fine of R200 000 or five years’ imprisonment or both.

Manasse Malimabe, head of the FAIS compliance department, says the FSB has not initiated further investigations into Pickvest subsequent to the Appeal Board’s dismissal.

Pickvest’s directors did not respond to requests for comment. Business rescue practitioner Hans Klopper, involved with the HS companies, said he had no interest in Pickvest.
Topics: Pickvest, Sharemax, Financial Services Board, FAIS Act, Highveld Syndications, Caroline da Silva, Manasse Malimabe, Willie Botha, Durand Botha

Protecting Olympus from falling: ANC goes for broke to defend Zuma

No Fear No Favour No One Party State..........

Ranjeni Munusami South Africa 22 September 2014 01:37 (SOUTH AFRICA)

One could only imagine how the discussion went down at this weekend’s ANC national executive committee (NEC) meeting that led to a rather astounding media statement released on Saturday. The ANC said it wanted Parliament to protect President Jacob Zuma and his deputy Cyril Ramaphosa from being humiliated and embarrassed by opposition parties. The ANC seems to be proposing “alternate” forms of accountability, such as Zuma and Ramaphosa addressing imbizos, instead of having to face Julius Malema and his militant red brigade in Parliament. This is officially the point where the ANC loses the plot of how a democratic state should be run. By RANJENI MUNUSAMY.

ANC national executive committee meetings are interesting phenomena in human behaviour. They are governed by some unwritten law of the jungle that requires members to stake their own political survival on declarations of praise for whoever is at the top of the food chain, and swear annihilation on their enemies. It’s how you would imagine the Sicilian mafia conducts board meetings – without the obligatory bloody shootout at the end.
There have been defining moments in time that illustrate how these meetings normally unfold. In 2002, former president Nelson Mandela went to an NEC meeting to try to talk sense into the ANC so that they adopt a more rational posture on HIV/Aids. At the time, the organisation was sitting by impassively as a human catastrophe was playing out, with government following the denialist line of former president Thabo Mbeki and his then health minister Manto Tshabalala-Msimang, denying life-saving treatment to people living with HIV/Aids.
Mandela thought that he could appeal to the collective wisdom of the ANC leadership at that time so that they could force government to roll out a comprehensive treatment programme. Mandela was not prepared for what greeted him at the meeting. Speaker after speaker lambasted him for publicly contradicting the party’s policy on Aids drugs. Mandela left the meeting devastated, not only at the insolence but also the reluctance of anybody in the then 60-member NEC to break ranks with a herd that was defending an irrational and ridiculous position.
Six years later, the composition of the NEC had changed and the tide had swung against Mbeki. This time the post-Polokwane 80-member NEC was meeting to decide Mbeki’s fate after High Court Judge Chris Nicholson found that he had politically manipulated President Jacob Zuma’s corruption case. Again, speaker after speaker in the NEC meeting got up to vent condemnation of Mbeki and justify his recall from office.
It is the rule of the mob, the clinging to a false notion that defending and supporting whoever is leader of the party at the time is a political calling. It is the conflation of the interests of the party leader with that of the good of the organisation.
It is irrationality in its highest form, lobbed around in a room where the main political power of country is vested.
On Saturday, ANC secretary general Gwede Mantashe issued a statement in the midst of an NEC meeting to announce an appeal to Parliament to “restore to the House the necessary dignity and decorum, [and] appreciation of its rules”. “Amongst the issues discussed today has been the concerning developments in Parliament, particularly the obvious intention to humiliate and embarrass the president and the deputy president whenever they appear in the House,” Mantashe said.
The crux of the statement is this: “The NEC cautions against continuing this trend of negatively exposing the Head of State to disrespect and intended humiliation by a fringe group committed to undermining democracy”.
This means that the NEC decided that Zuma, and his deputy Cyril Ramaphosa, should not have to meet their constitutional obligations to account to Parliament as they stood the chance of being challenged and disrespected by the Economic Freedom Fighters (EFF). Mantashe did not name the EFF in the statement, but his reference to “fringe group” is a nod to previous colourful descriptions of the red brigade, such as “rebels” and Nazis.
It has been apparent for the some time that the ANC has no idea how to contend with the militancy and aggression of the EFF. The ANC has repeatedly condemned their behaviour and has tried to swing public opinion against Julius Malema and his crew. The problem for the ANC, however, is that despite the EFF’s audacious behaviour, they are not getting mass censure for their repeated assaults on the ANC leadership. If anything, the EFF’s protest in Parliament demanding that Zuma “pay back the money” for the Nkandla upgrades won them some leverage and respect outside their primary constituency.
It is clear that the EFF is becoming emboldened by the day and realise that turning Parliament into a battlefield is working in their favour. Other opposition parties are also siding strategically with the EFF as they appreciate that Malema & Co. are able to rattle the ANC like nobody else has been able to before. For the ANC this must be extremely disturbing as they now know that despite their howls of protest, the EFF is likely to continue dictating the parliamentary agenda by default, no matter how much control the ruling party has over the organs of state and institutions of Parliament.
The ANC NEC has now decided that they need to protect their senior most leaders from the wrath of the EFF. However, they want Parliament to shield the president and deputy president from attacks from the EFF and other MPs who might climb the bandwagon. Both Zuma and Ramaphosa’s parliamentary question sessions degenerated into shouting matches with the EFF hurling insults – and Floyd Shivambu’s middle finger – at them.

What is interesting though is that the Speaker of Parliament Baleka Mbete, who last week survived an acrimonious motion of no confidence debate against her, would have been in the ANC NEC meeting when these matters were discussed. Surely she and others who are knowledgeable about the rules of Parliament and the constitutional obligations on accountability should have cautioned the meeting that members of the executive could not dodge having to answer questions in Parliament.
It would also be expected that Mbete and many others in the room would have reasoned with the rest of the committee that it is not Parliament’s business to protect the president and deputy president, but to ensure that they are held to account. And if they are refusing to do so, surely Parliament should frown heavily on them for that?
However, despite the Speaker being in the room, the NEC statement read while the president and deputy president remain accountable to Parliament, they will now engage the people of South Africa “through various other platforms including direct contact with our people such as the recently relaunched Izimbizo forums”. While it is laudable that the ANC wants its leaders to have more direct contact with ordinary citizens – which is somewhat rare out of election season – it is rather bizarre that these are being proposed as alternate methods of accountability.
Unfortunately for the ANC, the Constitution does not provide for innovative alternatives to parliamentary accountability in the event of a rambunctious group being elected to serve as MPs. Zuma and Ramaphosa stand the risk of violating the Constitution should they chose to avoid accounting to Parliament – and perhaps one of the 80-member NEC should have known that this is grounds for impeachment. Surely some people in the room would have also realised that it would undermine democracy for the president to show up only to deliver the State of the Nation Address and attend the Budget, and avoid Parliament otherwise.
So why would the ANC take the risk of violating the Constitution and undermining South Africa’s parliamentary democracy by making such an announcement?
It is clear that the ANC is not reading the public mood accurately about the level of resentment about the costs of the upgrades at Zuma’s Nkandla home. They seem to think that more people would be angry about the EFF disrespecting Zuma than with those wanting him to pay for the undue benefits he and his family received. The ANC – or at least those in the NEC – would rather rally behind Zuma than consider the long-term damage this posture will have on the organisation.
The ANC would rather self-destruct in the mission to protect its leader than tell him to respond to the questions he is obliged to answer in Parliament. It is staggering that nobody in the senior most leadership structure of the ruling party proposed this as a possible solution to the ANC’s dilemma of how to contend with the EFF.
What we have now is a deliberately blinkered approach and a clumsy argument that the EFF’s attempt to hold Zuma to account is actually an attack on democracy. Asking hard questions of the president is hardly an assault on the state or an attempt to bring government to its knees.
So far, the only attack on democracy would be for the president and deputy president to snub Parliament and hold government-funded events to sell the “good story” to the nation.
If Olympus is falling, it is only because Olympus is refusing to accept responsibility for what has gone wrong under his leadership. If only one in a room of 80 of the ANC’s elected leaders had the courage to speak truth to power and say so. DM









Sunday, September 21, 2014

Láng wag kom vir Sharemax-geld

Láng wag kom vir Sharemax-geld
Heléne Cilliers
Sondag 21 September 2014 5:00 vm.


Sharemax het sedert hy in Desember 2011 ’n sakereddingspraktisyn aangestel het, steeds nie ’n sakereddingsplan voorgelê nie. Kragtens die Maatskappywet moes dit binne 25 werkdae daarna geskied het.

Sharemax-beleggers kan jare wag om hopelik minstens ’n deel van hul geld terug te kry indien die Suid-Afrikaanse Inkomstediens (SAID) se aansoek om die likwidasie van die omstrede eiendomsindikasie slaag.

Die SAID het ’n aansoek in die Noord-Gautengse hooggeregshof ingedien om Sharemax se sakereddingsproses tersyde te stel of, alternatiewelik, om ’n bevel te kry om dit ter syde te stel en die maatskappy te likwideer.

Sharemax, waarin sowat 33 000 beleggers – hoofsaaklik pensioenarisse – belê het, is in 2013 as ’n Ponzi-skema beskryf deur die ombudsman vir finansiële adviseurs en tussengangerdienste (Fais).

Hy is in 2011 in sakeredding geplaas, maar luidens die hofstukke wat die SAID ingedien het, het dié proses tot ’n einde gekom as gevolg van nie-voldoening aan die Maatskappywet.

Hy sê ook daar is geen redelike vooruitsig vir redding nie en dat Sharemax nie in staat is om sy skuld te betaal nie.

Sharemax het sedert hy in Desember 2011 ’n sakereddingspraktisyn aangestel het, steeds nie ’n sakereddingsplan voorgelê nie. Kragtens die Maatskappywet moes dit binne 25 werkdae daarna geskied het.

Die SAID sê hy is ’n krediteur van Sharemax omdat dié hom uitstaande BTW van meer as R15,7 miljoen skuld.

Indien die likwidasie-aansoek toegestaan word, lê daar nog ’n lang proses en ’n gewag voor voordat beleggers hul geld sal terugkry, indien enigsins, volgens ’n plaaslike likwidasie-onderneming.

Boonop kan die saak uitrek omdat Sharemax nog nie ’n beantwoordende verklaring ingedien het nie, maar wel kennis gegee het dat hy ’n regspunt gaan aanroer omdat een van sy skuldeisers, Gerbrecht Siegrist, nie ook as een van die respondente in die saak genoem is nie.

Omdat Sharemax nog in sakeredding is, kry Siegrist dieselfde voorkeur as die SAID, sê hy.

Indien die SAID se aansoek toegestaan word, sal sy status van ’n konkurrente skuldeiser verhef word tot ’n voorkeurskuldeiser, sê Sharemax.

Indien Sharemax gelikwideer word, sal die SAID en banke eerste in die ry staan as voorkeurkrediteure, volgens die likwidasiemaatskappy met wie Sake-Rapport gepraat het. Werknemers en beleggers staan dan tweede in die ry as die konkurrente krediteure.

Indien die likwidasie-aansoek toegestaan word, sal dit ’n tyd neem vir alle krediteure om hul eise in te dien, waarna Sharemax se totale skuld bepaal kan word.

Volgens die likwidasiemaatskappy is Sharemax egter tans ’n “leë dop” en sal sy direkteure waarskynlik verantwoordelik gehou moet word vir sy skuld.

Sharemax vra egter dat die SAID se aansoek tersyde gestel word omdat hy nie Siegrist as ’n respondent aanhaal nie.

Hy sê ook in sy kennisgewing dat hy volgens die SAID insolvent is, en indien dit die geval is, sal die bedrag wat Siegrist toekom as ’n konkurrente krediteur baie verminder in verhouding tot hoeveel die SAID s’n sal styg as ’n voorkeurskuldeiser.

Volgens die likwidasiemaatskappy kan dit enigiets van ses maande tot ses jaar duur om die likwidasieproses af te handel.

FSB halts Pinnacle Tech investigation

FSB halts Pinnacle Tech investigation
September 2014


Pinnacle bribe charges dropped
Court papers detail Pinnacle bribery charge
FSB launches Pinnacle insider trading probe

Johannesburg - Pinnacle Technology [JSE:PNC] announced that the Directorate of Market Abuse at the Financial Services Board (FSB) decided to close an investigation and no enforcement action will be taken.

It relates to an investigation in terms of section 84 of the Financial Markets Act (FMA), relating to a possible contravention of section 78 of the FMA (insider trading).

The investigation related to share transactions in the company executed during March 2014.

An executive director of technology allegedly offered a R5m bribe to a senior police official in order to win a contract for his company, police claimed at the time.

Pinnacle denied the allegations and said there was "no reason to doubt the veracity" of the director's denial from the evidence available to the company.


Pinnacle bribe charges dropped
2014-08-25 16:43



Court papers detail Pinnacle bribery charge
Bribery: Pinnacle exec's case postponed
Pinnacle extends rout on bribery charge

Johannesburg - Prosecutors have dropped charges of attempted bribery against an executive director of Pinnacle Holdings [JSE:PNC] due to insufficient evidence, the small-cap technology company said on Monday.

The Specialised Commercial Crime Unit (SCCU) in March arrested Takalani Tshivhase on charges he allegedly offered a bribe to a senior police officer to win a contract. Tshivhase has denied the charges and Pinnacle said it had no reason to doubt him.

READ: Investors dump Pinnacle on bribe news

"The SCCU has come to the conclusion that the evidence presented is insufficient to provide a reasonable prospect of a successful prosecution. The charges against Mr Tshivhase will accordingly be withdrawn," the company said.

Shares of Pinnacle, which had been hammered after news of the charge against Tshivhase earlier this year, surged 33% to R13.10 by 16:00.

READ THIS NEXT: Court papers detail Pinnacle bribery charge

Read more about: pinnacle holdings | takalani tshivhase | bribery | fraud | tech

New Fidentia curator provisionally appointed- Final decision was due on September 19

Moneyweb News
Special Investigations

Author: Moneyweb|
New Fidentia curator provisionally appointed

Final decision due on September 19.

The Financial Services Board (FSB) says the Western Cape High Court has provisionally appointed John Levin to replace Dines Gihwala as curator of Fidentia Asset Management and its related companies.

Gihwala resigned as curator in July.

Levin qualified as an attorney, notary and conveyance in 1967 and held a BA (Law and Economics) from the University of Stellenbosch and a diploma in law from the University of Cape Town. He is a member of the Corporate Law Alliance.

The FSB said on Wednesday Levin had “extensive experience” in the resolution of commercial disputes, following 40 years in commercial practice in South Africa.

Previously, Levin acted as curator for Ovation Global Investment Services that had R4.4billion of assets under administration on behalf of 15 000 investors, it said.

“When the curatorship had run its course, except for an outstanding claim which is being attended to by his co-curator, Mr Levin was discharged as co-curator on November 14 2012 at his own request,” the FSB said.

The court will make a final pronouncement on Levin’s appointment on September 19.

The 12 previous Fidentia curator reports were available on the FSB’s website, the board said.

Saturday, September 20, 2014

Reeva’s parents may still sue Oscar

Reeva’s parents may still sue Oscar

September 20 2014

Oscar Pistorius was found guilty of culpable homicide following his killing of his girlfriend Reeva Steenkamp. Picture: Alon Skuy

Johannesburg - Oscar Pistorius may have escaped a murder charge, but he could still have to face the music for taking Reeva Steenkamp’s life.

Advocate Dup de Bruyn, who represents the dead woman’s parents Barry and June Steenkamp, said on Friday the family were still considering a civil claim against the convicted paralympian, but were waiting for sentencing procedures to be completed.

It was earlier reported that Reeva had supported her parents financially, and that they would sue Pistorius for loss of income and emotional distress.

The Steenkamps have not conducted interviews with local newspapers since Pistorius’s conviction last week. They did however speak to US news network NBC.

De Bruyn told Weekend Argus sister title the Saturday Star that the newspaper would not be granted an interview as the family were “contractually bound”.

On Friday, it emerged that June Steenkamp was writing a memoir about Reeva’s life and her own experiences during the trial, she told The Independent in the UK.

Titled Reeva, A Mother’s Story, the book is described as a “painfully honest and unflinching account of Reeva’s life”, in which June will also talk about her experience of sitting in the courtroom where Pistorius was on trial for the premeditated murder of her daughter.

June said: “Reeva was a beautiful and intelligent woman.

“She was always so much more than just someone’s girlfriend. She devoted her life to helping people around her and she believed passionately in human rights. She was set to make her mark on the world. That opportunity was taken from her.

“This book is my way of making sure she will not be forgotten.”

Meanwhile, the Justice Department has set in motion a process that will widen prosecuting authorities’ scope when appealing court findings.

This comes as the State decides whether to appeal against the Pretoria High Court findings that led to Pistorius being cleared of murder.

Department spokesman Mthunzi Mhaga said this week that a bill, aimed at amending the Criminal Procedure Act to give the Director of Public Prosecutions the right to appeal on questions of fact, had been prepared.

The bill is in the process of being submitted to Justice Minister Michael Masutha for his consideration, and for ap-proval to promote it in Parliament.

Currently, the law gives the Director of Public Prosecutions the right to appeal against the granting of bail to an accused, and an inadequate sentence. In addition, the State has the right to appeal against acquittals, but only on questions of law.

However, it does not have the right to appeal against a finding of not guilty on questions of fact.

Pistorius shot and killed Steenkamp at his Pretoria home on Valentine’s Day last year. His version was that he thought an intruder had broken into his house, and that he fired shots through a closed toilet door to protect himself and Steenkamp.

Some legal commentators were critical of Judge Thoko-zile Masipa’s application of the concept of dolus eventualis (indirect intent) when she found Pistorius not guilty of murder, and instead convicted him of culpable homicide.

For a court to convict an accused of murder on the basis of dolus eventualis, it must find that he subjectively foresaw that someone could be killed as a result of his actions, and that he consciously accepted that possibility before proceeding.

What got the legal commentators talking was Judge Masipa’s finding that the State had failed to prove that Pistorius foresaw the possibility that he would kill the person behind the toilet door when he fired the shots.

This, according to many legal minds, is a question of law which the State is allowed to appeal against, if it is granted leave to appeal.

Criminal law attorney William Booth agreed, but added that the judge could say that she made a factual finding.

Sentencing procedures in Pistorius’s case are scheduled for next month.

Saturday Star and Weekend Argus

Related Stories

‘Oscar’s voice was that of a victim’
Law Society condemns attacks on Oscar judge
Legal groups slam attacks on Masipa
Oscar admits to having ‘dark side’
Oscar free to compete, says Sascoc
Oscar book out of question... for now
Despite his promises Oscar was his old self
‘Oscar’s histrionics a grotesque pantomime’

Kruispad vir Sharemax met grootste projek tot nog toe- ( DEON BASSON RIV ) Trevor Manuel failed Sharemax pensioners

Kruispad vir Sharemax met grootste projek tot nog toe

SHAREMAX se warrelwind-bemarking van gesindikeerde eiendom as 'n belegging het 'n kruispad bereik.
Vrydag is bemarkers en potensiele bemarkers in Pretoria vergas met 'n aanbieding wat sommige teenwoordiges eerder aan 'n Amerikaanse presidentsverkiesing as 'n sobere beleggingsaanbieding herinner het.

Ambisie om geld by die publiek te werf, word by die dag groter. Die nuutste eiendomsprojek, bekend as Comaro Crossing, in die suide van Johannesburg, word vir R145,6 miljoen gesindikeer. Dit is Sharemax se grootste projek tot dusver en stoot die totale bedrag onder sindikasie tot R600 miljoen op.

Die portefeulje is wel aansienlik minder werd weens bemarkingskoste en die wins wat Sharemax vir homself afskep. Luidens die prospektus gaan net R118 miljoen van die bedrag wat van die publiek gewerf word, vir die aankoop van die eiendom gebruik word. Sharemax gaan 'n wins van R10,6 miljoen verdien en die bemarkingskoste gaan R14,6 miljoen beloop.

Beleggings word in gekoppelde eenhede van R1 000 elk gedoen. Die minimum-belegging is R10 000.

Elke eenheid bestaan uit 'n gewone aandeel van 1c en 'n "eis" van R999,99 teen die openbare maatskappy Comaro Crossing Holdings. Die sogenaamde "eise" is in wese maar lenings van die beleggers aan Comaro Crossing Holdings.

Beleggers word 'n aanvanklike inkomste-opbrengs van 10,2% belowe, wat natuurlik uit die verhuring van die eiendom voortspruit. Volgens die prospektus kan die inkomste-opbrengs teen die negende jaar tot 20,3% styg.

Die prospektus is versigtig oor kapitaalgroei: "Neem kennis dat die markprys van 'n eenheid altyd deur markomstandighede en vraag en aanbod bepaal sal word."

In bemarkingsdokumente word die versigtigheid oorboord gegooi: "Die kapitaalbelegging groei bykomend met 7% per jaar na aanleiding van die toename in die eiendom se waarde." 'n Pro forma-kwotasie vir 'n beleggingsbedrag van R100 000 toon dat die belegging n 'n jaar tot R107 000 sal groei en elke jaar daarna ook met 7%.

Die kwalifikasie in die voetnootis bra eina: "Kapitale groei op die aandeel per jaar word afgelei van die eiendom se waarde-toename per jaar en die inkomste-toename per jaar en word teen 6-8% per jaar geprojekteer."

Die waarheid is dat die eiendom wat vir R118 miljoen aangekoop word, nou reeds vir R122,4 miljoen deur ene SJ Eloff van New World Valuation gewaardeer word.

Kom ons neem aan Sharemax praat die waarheid. Dan is die eenhede R841,23 werd en nie R1 000 nie, en behoort Sharemax R84 123 as beginpunt vir sy vroere som te gebruik en nie R100 000 nie.

Dit beteken ook dat die maatskappy se laste (lenings van beleggers) sy bates van meet af aan met R23,1 miljoen sal oorskry. Tegniese bankrotskap word net vermy omdat die lenings net terugbetaalbaar is as die eiendom verkoop of die maatskappy gelikwideer word.

Die probleem met die bemarkingsmateriaal is dat oningewyde beleggers soms net dit lees en nie die prospektus nie.

Boonop het ek twee weke gelede oor die geesdriftige e-pos-boodskappe van me. Sonet Dreyer, Sharemax se bemarkingsghoeroe, geskryf. Die prospektus is eers op 10 Februarie geregistreer, maar Dreyer het reeds in Januarie makelaars in aller yl aangemoedig: "Jammer, die prospektus moet nog gedruk word. Ek bring dit vir jou of stuur dit per koerier sodra ek dit kry. Gebruik solank die ou aansoekvorm van Atterbury D�cor met die keusevorm. Onthou, tjeks word nog steeds uitgemaak aan Weavind & Weavind (Sharemax se prokureurs)."

Miskien is dit nodig om stil te staan by die belangrikheid van 'n prospektus. Art. 145 van die Maatskappywet verbied 'n aanbod aan die publiek sonder 'n prospektus.

In die lig van Dreyer se aanmoediging behoort die Prokureursorde vas te stel hoeveel van die beleggersgeld wat vir Comaro Crossing bestem was, reeds voor 10 Februarie in Weavind & Weavind se trustrekening gedeponeer is.

Cilliers e.a. skryf in hul gesaghebbende werk Maatskappyreg dat 'n prospektus aan 'n potensiele belegger die noodsaaklike minimuminligting moet verstrek om hom in staat te stel om die meriete van 'n aanbod te oorweeg.

Sharemax noem 'n lang lys dokumente in sy prospektus onder die paragraaf "dokumente ter insae vir inspeksie". Die dokumente is inderdaad 'n verlengstuk van die prospektus. Ek het die direksie van Co maro Crossing Holdings vroeg Maandagoggend skriftelik gevra of ek insae daarin kan kry.

Mnr. Willie Botha, 'n direkteur van Sharemax, antwoord om 16:02: "U is welkom om die dokumente van Comaro Crossing Holdings wat in paragraaf 26 vermeld word, ter insae te kry." Later: "Ek sal op Woensdag 3 Maart (dit is natuurlik vandag en n� die spertyd vir hierdie rubriek) beskikbaar wees om u insae in die tersaaklike dokumente te kan gee."

Die prospektus s� die dokumente sal beskikbaar wees "enige tyd gedurende sake-ure vanaf die datum vir registrasie".

Die dokumente sluit onder meer verskeie ooreenkomste, die ouditeursverslag en die gekonsolideerde balansstaat in.

Botha skryf ook: "Sharemax Investments behou sy regte voor indien u hierdie inligting wat aan u beskikbaar gestel sal word, tot nadeel van Sharemax en/of die aandeelhouers van die betrokke maatskappye gaan aanwend."

Potensiele beleggers wat genader word, moet eerder wag totdat ek insae in die dokumente gehad het, of self insae vra. Die inligting in die prospektus maak my nie opgewonde oor Comaro Crossing nie.


The Money Whisperer

Author: Magnus Heystek|
01 February 2013 13:20
Opinion: Deon Basson was right about Sharemax

Sharemax is a Ponzi scheme, a Ponzi scheme, a Ponzi scheme, a Ponzi scheme….

There - I’ve said it, and for the first time it can now be said without fear of being threatened with bullying letters from one of the phalanx of lawyers used by Sharemax over many years.

This is the one consequence of the ruling by the Financial Advisory and Intermediary Services (Fais) Ombud Noluntu Bam, who finally had the courage to blow open the festering sore known as the Sharmax Property Syndications with a courageous and honest ruling that sets in motion far- reaching consequences, both legal and financial, for the advisors, directors and other parties associated with this.

The other consequence is that, unless this ruling is somehow overturned by the Financial Services Board (FSB) Appeal Panel or another court, the floodgates are now well and truly open for financially dispossessed investors, particularly in the Zambezi Mall and The Villa, to pursue their claims through the offices of the ombud.

These two schemes in particular had all the characteristics of a Ponzi scheme: investors handing over money in order to get a little bit of their money back. This could only continue as long as there were other investors in the back of the queue to pay the investors in the front of them.

In total about R2.5bn was invested into these two schemes, most of it now simply gone….

For the late Deon Basson this vindication comes too late. His legal battle with Sharemax was a direct cause of his sudden death by heart attack. I was friends with Deon Basson since our days at Beeld in the early 80’s and we often - not often enough now in hindsight - had a beer and a burger, chatting about many things, lately more often than not about his research on Sharemax and his continuing legal battles with it.

For the record: Sharemax was suing him for R20m in damages for alleging that the financial model of Sharemax was unsustainable and in effect…..a Ponzi scheme. I think his estate needs to consider a damages claim against Sharemax and its directors.

His career path in financial journalism took him to the Financial Mail, Finansies en Tegniek and Finance Week amongst others, in the process winning an unprecedented six Sanlam awards for financial journalism. In the end he stopped entering this competition, he told me once, because he was afraid of being labelled a “windgat”.

Along the way he also was made a honorary professor in accounting at the University of Pretoria.

What was worth mentioning was that Sharemax did not sue the publications that carried his articles but Basson in his private capacity, thereby avoiding a long and drawn out legal battle with media giant Naspers. I understand that Naspers abandoned Basson in his financial hour of need. He won most of his Sanlam awards while working for this group and each time he won they would brag about “their” top journo, but when the chips were down they were nowhere to be seen.

The Sharemax lawyers used all the dirty tricks in the legal profession, making the shenanigans of the lawyers in The Good Wife look like the actions of Mother Theresa.

Funded by an endless supply of money they served papers on Basson, often changing their pleadings, requesting postponements etc., all with one objective in mind: to silence Basson and wear him out, both physically, mentally and financially.

In one court appearance the Sharemax lawyers even tried to use Basson’s health (he suffered from a bi-polar condition) in an attempt to discredit his testimony and analysis of their accounting methods.

A week before his death I had lunch with Basson. He gave me some chapters of his unpublished manuscript on Sharemax called “Public Interest Warriors” in order to get my view and to check some facts. There was no need: his facts were meticulously researched.

He also admitted during this lunch that Sharemax was getting to him. Financially destitute, abandoned by his erstwhile employers, most of his friends as well as the regulatory environment, his last words to me were:” Ek is tam, hulle ‘grind’ my nou....”

A week later he was dead, a sudden heart attack.

After his death Sharemax bought the manuscript of Basson’s book from his estate for an amount rumoured to be R400 000. His wife, also suffering financially, had no choice but to sell.

But Sharemax could not stop the tidal wave of exposés now coming at them from many quarters, particularly Moneyweb, the Afrikaans radio station RSG , Finweek and finally at the death, Beeld and Rapport.

The other English newspapers were missing in action in all of this. If you google ‘Sharemax’ on the Business Day website you find only five references to Sharemax, two of them written by the late Ian Fife who wrote about the possibility of Bonatla buying Sharemax. Nothing else about one of the largest financial scams in South African history.

It is my view that Business Day simply ignored this story, as did most of the English press, due to the fact that most of the distressed investors were old, white Afrikaans pensioners, and they could not be bothered with their fate.

It is furthermore my view that were more black investors the victims of the Sharemax scam, the regulators, including the FSB, the Department of Trade and Industry, the Reserve Bank and the Hawks would have stepped in a long time ago. A group of 4 000 Swazi military veterans have lost all their money in this scheme.

Mention has to be made of two other activists in all of this: forensic accountant André Prakke and Moneyweb’s Julius Cobbett.

Cobbett has been streets ahead of any other journalist in his articles on Sharemax and Picvest, the other large failed property syndication. I tried to get other journalists interested into the growing debacle at Sharemax. Cobbett was the only one who got out of his air-conditioned office and travelled more than 40 kilometres to a derelict and dusty shopping Sharemax syndication called The Fern, next to Dainfern where I live.

We were joined for a short lunch by André Prakke, who also worked tirelessly behind the scenes with his razor-like analysis of the financial engineering taking place at several Sharemax developments. In almost all instances could he point out that investors’ interest payments were being funded or supplemented by a secret slush fund, the hallmarks of a Ponzi scheme.

The Fern was a R40m syndication marketed by the Sharemax brokers at the time, with the prospect stating that it was an “upmarket shopping centre fully let with a steady stream of wealthy shoppers from Dainfern and surrounding areas…..”

The only problem was that the shopping centre was virtually empty, the anchor tenant Pick’nPay had left months ago and all that was left was a rag-tag collection of estate agents, hairdressers, a pizza joint and an ATM. Quite simply: they were lying, and so did Willie Botha, previous MD of Sharemax when he was quoted by Cobbett in one of his articles in response to his questions on The Fern.

On further analysis I established that The Fern had a bond of R28m with Nedbank at a fixed rate of 14, 5%. It was broke and underwater but still it was being marketed by Sharemax. Furthermore, on reading through the prospectus it took a while to establish that you were not investing in the property itself but merely lending money to a different company via a debenture which in turn lent the money to Sharemax.

On the phone-in radio programme on RSG, which I hosted Friday evenings from time to time with Andries van Zyl, we were often, particularly in 2010 and 2011, asked our views on the merits of investing in a Sharemax development. The answers were always the same: do not touch it with a bargepole!

Rather invest in a listed property fund, the best performing asset class over ten years or more if you wanted to invest in property, was my view.

This naturally drew the ire and legal threats from Sharemax who insisted on a meeting with Moneyweb and me. A date and time was agreed upon and Sharemax sent a list of 11 representatives from Sharemax who would form their delegation, including Willie Botha.

Feeling a little outnumbered we wrote back to state that apart from Andries van Zyl, executive producer Janine Bester and myself we would like to include André Prakke in our team. The meeting was immediately cancelled with no further explanation. Very soon thereafter the SA Reserve Bank stepped in and declared the scheme to be in contravention of the Banks Act and forced Sharemax to stop taking money from the public. This was the beginning of the end.

For his efforts Prakke had to suffer the continued legal threats from the legal bully boys employed by Sharemax. Prakke tells me that a week after Basson’s death he received a phone call from a Sharemax-lawyer with the ominous warning: you‘re next. He has never been sure if it was in reference to Basson’s death or the possibility of a lawsuit.

The Ombud’s ruling also has dire consequences for Weavind and Weavind, the Pretoria legal practice into whose trust account the investors’ billions paid in terms of an explicit undertaking that no money was to be released until the properties (Zambezi and The Villa) have been transferred into the investors’ name. As we know now the billions of rands that came into the account left it almost immediately.

Likewise the auditing firm ACT Solutions have some answering to do. They too have been reported to IRBA, the Independent Regulatory Board for Auditors, to explain their role in this unravelling property scheme.

This is not the last word on the Sharemax- saga. Expect similar developments in regard to Picvest, another failed property syndication which is currently under business rescue. Here too the final words have not been spoken.

*Magnus Heystek is a director at Brenthurst Wealth.

Special investigations

Author: Julius Cobbett
15 February 2013
Trevor Manuel failed Sharemax pensioners

In 2006 Deon Basson pleaded with Ministers Manuel and Mpahlwa to act on Sharemax.

JOHANNESBURG – In October 2006, journalist Deon Basson wrote to Trevor Manuel and Mandisi Mpahlwa, then the respective Ministers of Finance and Trade and Industry. The letter implored the ministers to do something about property syndication company Sharemax.

Basson did not receive a response to his letter.

When Basson sent his letter, Sharemax had sold syndications to the value of no more than R1.5bn. It was still in its infancy. By the time of its collapse, in September 2010, Sharemax had sold schemes to the staggering value of R5.5bn. The majority of investors are pensioners.

Sharemax’s two largest syndications, Zambezi and The Villa, were launched in 2007 and 2009 respectively. Investors poured a total of R2.3bn into these two projects – R756m into Zambezi and R1.590 into The Villa. These two schemes are also among Sharemax’s most toxic syndications. Fais Ombud Noluntu Bam recently described Zambezi as “nothing more than a Ponzi scheme”.

The obvious question is how Sharemax could continue, unchecked, for so long, when the ministers had been alerted to its alleged transgressions back in 2006.

It’s not as though Basson lacked credibility. Indeed, if there was any financial journalist worthy of the ministers’ attention, it was him. Basson had a formidable track record in exposing financial wrongdoing. He was also a six-time winner of Sanlam’s prestigious Financial Journalist of the Year award.

In March 2007, Basson again wrote to Ministers Manuel and Mpahlwa. His letter can be viewed here. The following regulators were copied on the letter: Errol Kruger, Registrar of Banks, Rob Barrow, chief executive of the Financial Services Board (FSB), Keith Sendwe, chief executive of Cipro, and Narain Kuljeeth, chief director, Office of Consumer Protection.

Basson wrote: “Since I have last corresponded with you, the serious regulatory and compliance issues raised in the Prakke report (attached hereto) had become more burning as a result of ongoing and further non-compliance by Sharemax Investments (Pty) Ltd.”

The Prakke report is an investigation conducted into Sharemax by forensic auditor Andre Prakke. Basson asked Prakke to compile the report to assist him in his legal battle with Sharemax. The 143-page Prakke report was comprehensive and damning. Prakke took particular issue with the investment structure through which Sharemax offered its attractive returns. Prakke argued that this structure was both unsustainable and illegal. He has since been vindicated on both counts.

Prakke says he received several threats of legal action, but never received a summons.

The full Prakke report can be downloaded here.

Basson wrote that there were worrying similarities between Sharemax and the failed Masterbond scheme. Basson concluded that the situation “calls for immediate action”.

Since October last year, Moneyweb has tried to get comment from Trevor Manuel – currently Minister in the Presidency – on Basson’s letter. Although our requests for comment were eventually acknowledged, no response has been forthcoming.

Moneyweb also asked the Department of Trade and Industry’s Narain (Babs) Kuljeeth, who was copied on Basson’s letter, whether any response was sent to Basson, and whether any action was taken. Kuljeeth’s response is produced in full below:

Dear Sir

Much has changed since then. I am certain that it was worked on. I do recall that the Legal Support and Prosecutions section of the Office of Consumer Protection dealt with the matter. I do recall that complainants were referred to the FSB. I also recall that in terms of the Consumer Affairs (Unfair Business Practices) Act, if a business engaged in prohibited conduct, then the Consumer Affairs Committee had no jurisdiction in the matter. It would be SAPS and the NPA.

The Director of Legal Support and Prosecutions has left the Department. I will try to contact him and ask for his input in this matter.

Please also note that today is my last day at the dti. It is not clear for how long I will be away. I will be assisting the National Consumer Commission for some time. I will contact you once I am there. Anyway, I doubt that I will ever escape an esteemed journalist as yourself. You will find me.

Warm Regards


Topics: Deon Basson, Sharemax, Deon Basson, Trevor Manuel, Mandisi Mpahlwa, The Villa, Zambezi
Sharemax sues over Basson's book- A History news report - 2008- Sharemax property investors misled by 'copy-and-paste error'
Special investigations

Author: Julius Cobbett|
21 August 2008 16:05

Photo: Willie Botha

The litigious property investment company seeks to prevent publication of new book.

Attorneys for property syndication company Sharemax have again sprung into action, this time to prevent the publication of former journalist Deon Basson's book Public Interest Warriors.

Ironically, the action might have the effect of focusing further public attention on the offending book. It could also have the effect of further depleting the time and financial resources of Basson, a longstanding opponent of Sharemax. The two have been involved in extensive litigation. Sharemax accuses Basson of writing articles that are false, defamatory and damaging. Basson accuses Sharemax of poor disclosure and excessive fees on its investment products, among other things.

Sharemax's attorneys Botha, Willemse and Wilkinson applied to the High Court on Tuesday to interdict Basson from printing, publishing, distributing or selling his book. Alternatively they sought to prevent certain chapters being published, which they believe are damaging to Sharemax.

The interdict application was based on an affidavit made by Sharemax MD Willie Botha. According to Botha, Basson's book creates the false impression that Sharemax directors are greedy, untrustworthy, dishonest and opportunistic. Botha also objects to Basson lumping Sharemax with failed and fraudulent investment schemes.

Botha argues that Sharemax is a licenced financial services provider and is authorised to sell unlisted shares and debentures. He says Sharemax has successfully marketed more than 50 property syndications worth approximately R4bn. Botha says that many investors have realised capital gains on their investment in addition to earning income.

He claims that that Basson failed to find comfort in the fact that Sharemax has been assisted by "reputable commercial attorneys" Weavind and Weavind and auditors PricewaterhouseCoopers and ACT Solutions.

The affidavit also contains startling allegations against Basson. Botha claims that Basson tried to "torpedo" a transaction which saw Sharemax investors agree to sell some of their properties. He also accuses Basson of being "in cahoots" with people in the liquidations industry and of promising to write articles that would cause harm.

Basson denies these allegations and responds that what Sharemax might see as a "torpedo", he sees as doing research. "They see you talk to someone and then claim you're in cahoots with them," says Basson. "As far as I'm concerned it's all nonsense."

Botha says that Basson has to this day refused to disclose who is paying his costs of defending Sharemax's legal action against him. Basson denies he is being externally funded and says he's paying all his costs himself.

Basson says he will respond to the interdict application in due course. He adds, cryptically, that it's about time that "many people in the media and at regulatory authorities wake up. Some of them are in for a surprise".

Click here to download Sharemax's interdict application.

Topics: Willie Botha, Sharemax, Deon Basson


Bid to liquidate Sharemax ‘won’t affect’ ombud’s case against ex-directors

September 20 2014 at 06:25pm
By Laura du Preez

The application by the South African Revenue Service (SARS) to liquidate Sharemax will not affect the financial advice ombud’s argument that the former directors of the property syndication promoter should be held personally liable for investors’ losses, the ombud’s office said this week.

SARS applied in the North Gauteng High Court for the liquidation of Sharemax on the grounds that it owes SARS R15.6 million in unpaid taxes and has not complied with business rescue proceedings as set out in the Companies Act.

Sharemax has asked the court to dismiss the application on procedural grounds. It says that one of the investors in the syndication scheme who has a ruling in her favour from the ombud is a creditor but has not been included as a respondent in SARS’s application.

Noluntu Bam, the Ombud for Financial Services Providers, told Parliament last week that some 2 000 of the 34 000 investors in Sharemax have complained to her office.

In her initial rulings, Bam held brokers who advised investors to invest in the scheme liable for the losses stemming from their inappropriate advice.

In two later cases, she held the former directors of Sharemax and the “masterminds” of the scheme liable for investors’ losses. These rulings have been challenged, and the Appeal Board of the Financial Services Board (FSB) has granted the former directors of Sharemax leave to appeal in both of the cases in which the ombud held them liable. The appeal is due to be heard in January next year.

The former directors argue that they cannot be held liable, because Sharemax was put into business rescue and there was a High Court-sanctioned “scheme of arrangement” involving the transfer of the assets in Sharemax to Frontier Asset Management.

The ombud’s office does not agree with the view that this absolves the directors of liability.

Ashley Percival, the assistant ombud at the Office of the Ombud for Financial Services Providers, told Personal Finance this week that, although the ombud’s office cannot speculate on the outcome of the Appeal Board case, it stands by its rulings that hold the former directors personally liable.

The potential liquidation of Sharemax will not affect this argument that the directors are personally liable for the losses, Percival says.

SARS’s argument in its court application that Sharemax’s business rescue proceedings did not comply with the Companies Act supports the ombud’s argument, made in her rulings, that putting the company into business rescue was a stalling tactic designed to frustrate investors, he says.

Last week, Bam told Parliament that her office cannot issue further determinations on complaints relating to Sharemax until the Appeal Board decides on the former directors’ appeal application.

In a separate challenge to her authority to hold financial advisers liable for recommending Sharemax, Bam is facing a High Court application from an adviser, Deeb Risk, whom she held liable for the losses of seven Sharemax investors.

Risk previously challenged the ombud’s rulings in court but was referred to the Appeal Board, which refused to hear new evidence.

Risk then reached a settlement with five of the investors, but the two remaining cases are the subject of his latest court application, which the ombud’s office is opposing.

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Special Investigations
Author: Ryk van Niekerk
18 September 2014
Sharemax complaints surge after Bam determination

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Sars applies for liquidation of Sharemax and termination of the business rescue process.

The South African Revenue Service (Sars) has applied for the liquidation of Sharemax Investments and for the business rescue proceedings of the company to be terminated.

This follows a lengthy tug of war since 2012 between Sars and the directors of Sharemax and the Nova Group of Companies for the payment of R15.7 million of outstanding taxes.

Sars filed the application in June 2014, as it does not foresee the company being able to pay the debt.

Sars names, amongst others, business practitioner Dawie van der Merwe, former Sharemax directors Willie Botha, André Brand, Dominique Haese, as well as Nova Property Group chairman Connie Myburgh as respondents.


In a strongly worded affidavit Elle-Sarah Rossato contends on behalf of Sars that that the sole reason for placing Sharemax Investments into business rescue was to abuse the mechanism prescribed by the Company’s Act not to pay creditors.

“The inescapable inference is that creditors of Sharemax Investments were misled with a promise that R40 million would be coming their way, whilst the controllers of the first respondent had already decided to abuse the Company’s Act business rescue provisions.”

The R40 million refers to the amount earmarked to be paid to Sharemax Investments shortly after restructuring the investments, and was to be used to pay creditors.

Siegrist Determination

Rossato said in the affidavit that the directors abused the Siegrist Determination as the reason for not paying the outstanding taxes.

Fais Ombud Nolantu Bam handed down the Siegrist Determination last year. Of all the determinations she handed down, it is the most controversial one, that not only held Siegrist’s financial advisor liable for his losses, but also the individual Sharemax directors.

The directors are appealing this judgment.

Rossato contends that Myburgh, the chairman of the Nova Group of Companies, said Sharemax couldn’t pay the amount to Sars due to approximately 500 new complaints lodged at the Ombud following the Siegrist Determination and because the appeal process against the determination has not been completed.

Rossato labeled this position as a “disingenuous abuse of the Siegrist Determination as a reason for the non-payment of the first respondent’s (Sars) debt.”

In total, approximately 2000 of the total 33 000 investors have lodged complaints against their financial advisors regarding investments in Sharemax.

Termination of rescue proceedings

As part of the liquidation process, Sars also applied for the termination of the rescue proceedings for Sharemax Investments, as the requirements for business rescue had not been fulfilled. Van der Merwe was appointed as the rescue practitioner in December 2011 and has since not filed a rescue plan, which according to the Companies Act should have been done within 25 days of his appointment.

Van der Merwe also used the Siegrist Determination as a shield for his non-compliance. Rossato said that this approach was “equally disingenuous”, as the Siegrist Determination was handed down on January 29 last year, more than a year after Van der Merwe’s appointment.


Sharemax and the directors have still not filed their answer to the liquidation application but instead filed a notice for joinder of Siegrist, alleging that Sars failed to include Siegrist as a respondent in their application. They contend that the application is “defective”, as Siegrist’s claim would be prejudiced if Sars’ application is successful. At most Siegrist will be a future creditor in the liquidation of Sharemax


Sharemax: Investors suffering

20 Sep 2010

Investors in The Villa, the largest property syndication undertaken by Sharemax to date, have reason to feel aggrieved over not earning any further interest on their investments.

Capicol, the developer using Sharemax investors’ money to develop The Villa, a super regional shopping centre in the east of Pretoria, says the interest owed to Sharemax’s investors has already been paid in advance for the whole period until the opening of the centre in 2011.

Investors should thus have still received their interest until at least September 2011, unless Sharemax did something else with the money.

First investors should have still received their money until December seeing that The Villa would have opened its doors this year already.

Last month, when it appeared that investors won’t be getting their money, Sharemax sent out a circular to inform investors that Capicol is experiencing cash flow problems and can no longer pay investors their interest.

Paul Kyriakou, head of Capicol, denied this categorically at a news conference in Pretoria last week.

“The centre’s construction has indeed grinded to a halt after Sharemax failed to lure further investment, but the interest on money borrowed from investors to pay for the construction done to date, has already been paid in advance to Sharemax,” he said.

He says Sharemax earned R75m with every prospectus issued. R15m of this money was held back for the promoters’ money, marketing costs (brokers’ commissions) and a contingency fund.

Capicol also reimbursed Sharemax with R10m in order to pay interest to investors for the whole period during which construction was ongoing, which left about R50m for construction work.

There are also some contradictions regarding the payment of interest. Capicol says the money has already been paid over to Sharemax.

Willie Botha, former Sharemax chairperson, said the interest for the full term has been held back in order to protect the interests of shareholders.

How Capicol paid the interest doesn’t matter anymore. Capicol and Sharemax both confirmed that interest has been collected for the whole term, and one should think that the interest should have been held in a trust.

When Botha, who is no longer chairperson of Sharemax, was later confronted about it, he said the money should have been used to pay the builders after negative press coverage closed the project’s investment tap. But this excuse does not hold water.

Sharemax has already received R1,59bn from investors, but only R1,056bn of this money has been paid to Capicol for construction work.

Work worth R1,2bn has already been completed, which means that the contractor GR Irons is owed another R150m.

Of the R540m received from investors and not spent on construction, R318m went to Sharemax itself.

Investors can’t complain about this as it is clearly stipulated in the prospectus.

However, there is another R220m left that leaves several question marks. The largest part of this is probably the interest component that Capicol has to pay to investors – a part was indeed paid out to investors.

But where is the interest for the rest of the term and what happened to the contingency fund which holds 3% of investors’ money?

These are some of the questions the South African Reserve Bank’s (SARB) statutory managers probably have to ask Sharemax’s management.

In the case of Zambesi Retail Park the picture is slightly different. This centre has already been completed and Capicol paid the rental income, from which investors were compensated, to Sharemax until August.

However, Capicol started holding back the rental income in August as Sharemax apparently weren’t fulfilling its contractual obligations to Capicol.

The agreement entailed – and this applies to The Villa – that the developer borrow money from Sharemax’s investors to build the centre, and that Sharemax companies in which investors invest their money would then buy the building from Capicol when the centre opens its doors.

Sharemax has been delaying the process for months as it owes Capicol and the contractor lots of money. This is why Capicol has closed the income stream tap.

The result is that investors in Zambesi have invested money in a property syndication that owns no properties. – David van Rooyen, Sake24