Support grows for Pickvest class action - 18 000-odd investors, mainly pensioners invested

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Special Investigations

Author: Hanna Barry|

Support grows for Pickvest class action



Opposition expected – attorney.

More than 6 000 investors in the Highveld Syndications (HS) companies have to date confirmed support of a class action application being brought against the Pickvest-promoted property schemes, attorney Jacques Theron confirmed.

Theron’s law firm, Theron & Partners, is bringing the class action application on behalf of the 18 000-odd investors, mainly pensioners, who invested in the HS companies. Court papers list 22 respondents in the matter, but the application seeks relief against 16 of these, Theron said.

Among the respondents against which relief is sought is Nic Georgiou, MD of Orthotouch, a public company that bought properties in the HS companies on the grounds that it would pay the syndication companies a return of 6% a year, increasing by 25 basis points each year. At the end of five years, Orthotouch would pay the syndication companies the full purchase price of R4.6 billion, in terms of this scheme of arrangement.

To date, just two respondents have notified the class action attorneys of their opposition, namely Heinrich Pieter Moller (director and company secretary of the relevant Highveld companies) and Orthotouch.

Eleven respondents have confirmed their receipt of the application, including Georgiou, who has not yet indicated an intention to oppose it. Georgiou could not be reached via his office line to comment.

“Respondents have 15 court days from date of service of the application to file a Notice of Opposition and 30 (court) days after the filing of their notices to file affidavits in answer to the applicants’ papers,” Theron explained.

On January 6 2015, the court will rule on those respondents who did not oppose the application for certification. “This order may include a certification in respect of those respondents or the court may postpone the matter to be adjudicated upon simultaneously with the opposing respondents,” Theron said.

In all likelihood, the bulk of respondents would oppose the application, Theron said, but he had not yet received any opposing affidavits.

Before a class action can proceed, the affected parties must first be declared (certified) as a class by a court, on the grounds of them having a common claim. This will be done once the court has received the relevant affidavits from applicants and respondents and considered the merits of the case.

Theron believes this application could be heard in the North Gauteng High Court in the first half of 2015, but this would depend on available court dates and the degree of opposition received.

If the class is certified and the class action goes ahead, investors will be given an opportunity to opt out of the action – i.e. be excluded from the proceedings and ultimate findings of the action, as well as rewards that might be made. If investors do not opt out, they are automatically included in proceedings.

Theron said he was not privy to the investors’ votes regarding the proposed schemes of arrangement recently put forward by Orthotouch. Investors have been asked to choose between three alternatives to rearrange the business affairs of Orthotouch, after it failed to meet interest payment obligations to these investors.

“Many investors indicated that they were not aware of the class action and that they want to withdraw their votes,” Theron noted.

Business rescue practitioner for the HS Companies, Hans Klopper did not respond to requests for comment on the voting outcomes.

Topics: PICKVEST, ORTHOTOUCH, CLASS ACTION, HIGHVELD SYNDICATIONS, HANS KLOPPER, HEINRICH PIETER MOLLER, NIC GEORGIOU, THERON & PARTNERS, JACQUES THERON