Kruispad vir Sharemax met grootste projek tot nog toeDEON BASSON
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.
TRAPSKRUM
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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.
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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
Babs
Topics: Deon Basson, Sharemax, Deon Basson, Trevor Manuel, Mandisi Mpahlwa, The Villa, Zambezi
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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
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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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