REPRESENTATIONS: SHAREMAX – BROOKLYN CAS 697/10/2010

The National Director of Public Prosecutions National Prosecuting Authority VGM Building Hartley Street Weavind Park 0002 Per E-mail: SBatohi@npa.gov.za mmutshivhana@npa.gov.za Dear Adv. Batohi, REPRESENTATIONS: SHAREMAX – BROOKLYN CAS 697/10/2010 OUR LETTER DATED 22 JUNE 2020 AND ATTACHED UNNUMBERED LETTER FROM ADVOCATE R DE KOCK DATED 29/07/2020 REFER: 1. The purpose of this letter is to direct representation to your office regarding the above-mentioned matter. 2. Advocate De Kock’s letter dated 29 July 2020, under the heading CURRENT POSITION OF THE NPA states that “As a result of this there appears to be no “illegality” as the companies and their underlying assets taken over by Nova complied with the Bank’s Act and can therefore not be regarded as assets acquired from the proceeds of crime.” 3. We infer from the abovementioned that a decision was taken not to proceed with an asset forfeiture application. 4. We are calling for Advocate de Kock’s decision regarding an asset forfeiture application to be reviewed. Moreover, this also serves as notice that based on our understanding of the facts and the law we view the decision as irrational and incongruous with the facts and/or the law. 5. We accept that you share our commitment to ensure that justice is done and that the principle of equality before the law is upheld. Having a reasonable understanding of the functioning of the NPA we hope that those who briefed Adv de Kock merely exhibit a lack of understanding of the law, the facts or the practical implementation thereof in the interest of the victims of crime. 6. Having been exposed to the horrific stories of those who have lost their life savings we feel obliged to enlighten you with our view. This we do with the stated caveat that we have not had access to the police case docket and have only utilised publicly available information. We infer that Adv de Kock was provided with representations by Nova and/or individuals that may be benefitting under the NOVA scheme and neither have we been privy to these arguments. 7. Kindly forgive us for stating the obvious and for repeating our earlier arguments. This we, however, do in an endeavour to ensure that our argument is understood 8. The entire Sharemax investment scheme was declared illegal following proven transgressions of the Banks Act. In terms of this Act, no person may conduct the business of a bank unless such a person is a public company and registered as a bank which Sharemax was not. 9. During 2012 all the property-owning companies promoted by Sharemax were transferred to and became part of Nova Properties. The Nova scheme cannot absolve the contravention of the Banks Act by Sharemax. The Nova scheme has no bearing on the initial criminal conduct of Sharemax. The mentioned withdrawal, by the Reserve Bank, of the directive to repay the investors can also not absolve the contraventions of the Banks Act. Whatever administrative directives the Reserve Bank may have withdrawn is a nullity if crimes were committed. We feel strongly and consider this an aspect that perhaps did not get the attention it deserves and we, therefore, reiterate that if the original funds were procured through criminal conduct it remains proceeds until restitution is made to the victims. 10.The fact that the inspectors reported the contraventions of the Banks Act to the Serious Economic Offences Unit of the South African Police Service on 09 March 2012, indicates that they shared the same view. This was done after the establishment of Nova. 11.Advocate de Kock’s assumption that the Reserve Bank “appears to have supported” the Nova rescue vehicle is correct but the fact remains that it has no bearing on the initial criminal conduct by Sharemax. Our argument may seem crude but the principle is stark that the Reserve Bank cannot condone criminal conduct or affect the reality that assets were procured with the proceeds of crime. 12.The logic of Advocate de Kock’s argument that the NPA/AFU will “be assuming the functions of Nova” if it should proceed with an asset forfeiture escapes us. The NPA should not be seen to be transferring their obligation to deal with proceeds of crime in terms of POCA to Nova. The NPA is obliged and equipped through the Asset Forfeiture Unit (AFU) to take action concerning the proceeds of crime. We argue that a Chapter 6 Asset forfeiture intervention is required in the interests of justice and protecting the rights of the investors since the other safeguards have failed them dismally to this point. 13.Illegally obtained property which is “proceeds of crime” cannot be manipulated utilizing a compromise to change its nature. It remains “proceeds of crime” as defined in POCA. 14.The failure to proceed with an asset forfeiture application, based on the reasons provided by Advocate De Kock, may be viewed as irrational. The NPA has positioned itself as an organisation that is victim orientated in its application of the law. We are convinced that an asset forfeiture application brought by the NPA will go a long way in restoring the trust of society in the NPA’s commitment to deal with commercial crime. 15.Likewise, an inference is possible that the delay to prosecute the directors of Sharemax is not only inexplicable but may contribute to the dissemination of assets by the board members of Nova which may, in turn, deprive the investors of their investment funds for an extended time. Kindly also consider the undue delay and seeming disinterest by the prosecution team dealing with this matter to ensure a prosecution. 16.The mere fact that Nova may be a compromise “to protect the interest of investors” cannot and should not excuse Sharemax and the directors for the illegal contravention of the Banks Act. 17.We kindly request a re-evaluation of the decision not to proceed with an application in terms of Chapter 6 of POCA. Yours sincerely, GERRIE NEL PRIVATE PROSECUTOR EMAIL: onsvervolg@afriforum.co.z

NPA decides not to freeze Nova’s assetsAfriForum says decision is ‘irrational’ and ‘incongruous -SHAREMAX

NPA decides not to freeze Nova’s assetsAfriForum says decision is ‘irrational’ and ‘incongruous’. By Ryk van Niekerk 2 Sep 2020 Former state prosecutor Gerrie Nel, representing AfriForum, maintains that an asset forfeiture intervention is required since other safeguards have failed investors ‘dismally’. Image: Phill Magakoe, ReutersFormer state prosecutor Gerrie Nel, representing AfriForum, maintains that an asset forfeiture intervention is required since other safeguards have failed investors ‘dismally’. Image: Phill Magakoe, Reuters The National Prosecuting Authority (NPA) has decided not to freeze the assets of the Nova PropGrow Group, the rescue vehicle of the failed Sharemax property investment scheme. The decision follows civil rights movement AfriForum asking the NPA in June to seize Nova’s assets on the basis of the South African Reserve Bank’s 2010 finding that Sharemax had contravened the Banks Act. AfriForum said this was a criminal offence, meaning that Sharemax had acquired the properties with the proceeds of crime. The Reserve Bank’s finding triggered Sharemax’s collapse. Nova was then established through a Section 311 Scheme of Arrangement (SoA) to take ownership of the properties and to repay investors. AfriForum contends that the SoA does not remit Sharemax’s contravention of the Banks Act, and that Nova acquired assets that were procured with proceeds of crime. AfriForum labelled the NPA’s decision not to freeze Nova’s assets “irrational and incongruous” and asked Shamila Batohi, national director of public prosecutions, to take it on review. Read: AfriForum asks NPA to freeze Nova’s assets Nova: Insolvent, or in a sound financial position? NPA’s letter to AfriForum Moneyweb is in possession of a letter the NPA sent to AfriForum in response to the request to freeze Nova’s assets. In the letter Advocate Rodney de Kock, deputy national director of public prosecutions, motivated the NPA’s decision. He also acknowledged that the Hawks had handed the case to the Gauteng division of the Director of Public Prosecutions for a prosecution decision and that Nova, through its attorneys, submitted “representations” in response to AfriForum’s action. (Moneyweb has not had sight of this letter and has asked the attorneys for a copy. At the time of publication, it had not been forthcoming. However, Nova issued a press release in response to the AfriForum claims shortly after the original announcement, which can be read here.) De Kock stated that the court sanctioned the SoA and that the Reserve Bank supported the scheme. “As a result of this there appears to be no ‘illegality’ as the companies and their underlying assets taken over by Nova complied with the Banks Act and can therefore not be regarded as assets acquired from the proceeds of crime.” He added that Nova continues to sell properties and “they have already sold a large number of the properties”. De Kock also said that if the NPA froze the assets, the NPA would merely assume the functions of Nova. “The purpose of Nova is to compensate the investors who lost their money. The purpose of any possible asset forfeiture intervention, at this stage, will be exactly the same,” said De Kock. “The NPA/AFU [Asset Forfeiture Unit] will therefore be assuming the functions of Nova at great expense to itself.” AfriForum’s response In response, Advocate Gerrie Nel, head of the AfriForum Private Prosecution Unit, wrote directly to Batohi and called for a review of the NPA’s decision not to freeze Nova’s assets. “The entire Sharemax investment scheme was declared illegal following proven transgressions of the Banks Act … During 2012 all the property-owning companies promoted by Sharemax were transferred to and became part of Nova Properties. The Nova scheme cannot absolve the contravention of the Banks Act by Sharemax,” he wrote. “We feel strongly and consider this an aspect that perhaps did not get the attention it deserves and we, therefore, reiterate that if the original funds were procured through criminal conduct it remains proceeds until restitution is made to the victims.” Nel said AfriForum’s argument “may seem crude, but the principle is stark that the Reserve Bank cannot condone criminal conduct or affect the reality that assets were procured with the proceeds of crime.” Further, De Kock’s argument that the freezing of Nova’s assets would result in the NPA and AFU assuming the functions of Nova “escapes us”, said Nel. “The NPA is obliged and equipped through the AFU to take action concerning the proceeds of crime. We argue that a Chapter 6 asset forfeiture intervention is required in the interests of justice and protecting the rights of the investors since the other safeguards have failed them dismally to this point,” Nel wrote. Nel also criticised the delay in the decision to prosecute. “An inference is possible that the delay to prosecute the directors of Sharemax is not only inexplicable but may contribute to the dissemination of assets by the board members of Nova which may, in turn, deprive the investors of their investment funds for an extended time.” AUTHOR PROFILE Ryk van Niekerk MORE ARTICLES Financial journalism is in Ryk's blood. He has been in the industry for 20 years, and is looking forward to the next 20. Ryk has won numerous journalism awards, including several Sanlam Financial Journalist of the Year category awards and the coveted Radio Journalist of the Year award in 2016. He was also acknowledged as the National Press Club’s Editor of the Year in 2013. Ryk is also the anchor of the largest national business radio show in South Africa, RSG Geldsake, and hosts other dedicated personal finance and entrepreneurship shows. He is a well-known public speaker and facilitator, and a regular political and economic commentator on many South African television and radio platforms. Ryk has an MBL and M.Phil in Journalism – both achieved cum laude. Get full access to Moneyweb's financial insights and support quality journalism. .

AfriForum soek geregtigheid vir slagoffers van Sharemax-bedrog

> AfriForum soek geregtigheid vir slagoffers van Sharemax-bedrog

deur Alet Rademeyer | Jun 22, 2020

AfriForum en adv. Gerrie Nel, hoof van die burgerregtewaghond se privaatvervolgingseenheid, wil toesien dat geregtigheid ná byna ’n dekade vir die slagoffers van die Sharemax-bedrogspul geskied.

Sowat 34 000 beleggers het meer as R4,5 miljard in die skemas gestort en die meeste van hul geld verloor.

In agt jaar se tyd het die Nasionale Vervolgingsgesag (NVG) nog geen stappe gedoen om oortreders en direkteure te vervolg nie.

Kallie Kriel, uitvoerende hoof van AfriForum, sê ’n duidelike boodskap moet uitgestuur word dat mense wat ander se hardverdiende geld steel nie daarmee kan wegkom nie. “Die skema was van die begin af onwettig, terwyl die direkteure steeds in weelde leef. Hierdie skema kan gelykgestel word met die bedryf van ’n misdaadsindikaat en daarom moet hulle optrede onmiddellik gestop word. Mense werk hard om nie arm af te tree nie. Die slagoffers verdien geregtigheid.”

Nel en die privaatvervolgingseenheid het ’n bewaringsbevel opgestel om te verhoed dat die Nova-eiendomsgroep (vir alle praktiese doeleindes ’n voortsetting van Sharemax) die maatskappy se eiendomme teen pryse ver onder die markwaarde daarvan verkoop – ten koste van aandeelhouers. AfriForum het hierdie bevel aan die NVG gestuur en geëis dat hulle dit in ’n hof bring.

Die batebeslagleggingseenheid van die NVG kan hierdie eiendomme ingevolge ’n hofbevel in bewaring neem, maar die vervolgingsgesag het nog geen só ’n aansoek gebring nie.

In die aansoek wat AfriForum se privaatvervolgingseenheid vir die NVG opgestel het, voer die burgerregte-organisasie aan dat die eiendomme ter sprake bekom is met die opbrengs van onwettige aktiwiteite, insluitend geldwassery en bedrog soos vervat in die Wet op die Voorkoming van Georganiseerde Misdaad, Wetno. 121 van 1998, asook die Wet op Banke, Wetno. 94 van 1990. Aangesien die eiendom instrumenteel was tot die pleeg van die bogemelde misdade teen die aandeelhouers, en aangesien die maatskappy Nova sedert 2012 in beheer is daarvan (maar dié maatskappy gestig is met die opbrengs van onwettige deposito’s wat deur Sharemax van die publiek aanvaar is) het AfriForum versoek dat die NVG hierdie eiendom in bewaring neem.

“Ons ondersoeke het ook bewyse opgelewer dat die raadslede van Nova vir hulself buitensporige salarisse betaal, en ook eers hul eie salarisse betaal voordat hulle skuldbriefhouers uitbetaal. Dit blyk ook dat Nova besig is om van geboue ontslae te raak in ’n poging om likwidasie te vermy – ten spyte van die verdere reuse-finansiële verliese wat dit vir aandeelhouers kan inhou. Die Nova-raad se optrede is gewetenloos en daarom was ons genoodsaak om hierdie aansoek op te stel en vir die NVG te stuur om te verhoed dat aandeelhouers verdere verliese ly.

“Ons wil baie graag met die NVG saamwerk en bied al ons hulp tot hul beskikking aan sodat daar vordering in die saak kan kom,” sê Nel.

Herman Lombaard, wat ’n trust verteenwoordig wat in Sharemax belê het, meen die jongste stappe is die beste ding wat in jare gebeur het. “Soveel mense is reeds dood of het selfmoord gepleeg weens hierdie debakel.”

André Prakke, ’n ouditeur wat ook jare lank ondersoek oor Sharemax gedoen het, sê verskeie wette is oortree en bedrog is gepleeg. Daar moes baie lankal teen die direkteure opgetree geword het.

Eva Kautzy, ’n slagoffer wie se pa weens die impak van die bedrogspul in 2013 voor die Sharemax-gebou selfmoord gepleeg het, het bewoë gesê sy is dankbaar dat mense nou kan hoor waardeur beleggers soos haar pa is en hoe swaar hulle gekry het.

Sharemax chronicles continue: ‘Old people die, the fat cats laugh

Sharemax chronicles continue: ‘Old people die, the fat cats laugh’
Phillip De Wet

2 Dec 2016

Empty promises: Glynnis Morris has not seen any return from her investment.


Every few months 70-year-old Glynnis Morris receives a letter from Frontier Asset Management. In broad strokes the letter tells her how well everything is going with Frontier’s sibling company, Nova Property, into which her entire R300 000 pension was forcibly invested. She no longer reads the letters. She goes straight back to figuring out how to get by on her R1 500-a-month government old-age grant. “It’s always the same letter, only the dates change,” she says.

She has not seen a single cent from her investment for many years now, Morris says, no hint of the R3 125 monthly income — plus maybe some capital growth if the property market did well — she thought she was buying when she invested in the ill-fated Sharemax property syndication scheme in 2009.

Instead she has seen many promises from the directors of Nova, which stepped in as the rescuers when Sharemax collapsed and took over Sharemax’s assets. In return for delivering that service to Morris and others, the directors of Nova each paid themselves an average of R4.9‑million in the past financial year.

Morris has it better than most. She lives in a granny flat attached to the home of one of her daughters, and her two other daughters help her out with food “when I run out, which is often”. When the Mail & Guardian this week traced two other former Sharemax and now Nova investors, we found that one had died in March and the other had recently slipped into a coma.

“This is what happens all the time,” said a relative of the latter. “These old people had their money taken. Now they don’t eat properly, then they get ill and they die, while the fat cats are laughing all the way.”


The Nova directors — Dominique Haese, Rudi Badenhorst, Dirk Koekemoer and Connie Myburgh — deny they are anything other than businesspeople who work hard to manage the assets in which Sharemax participants had invested. But the difference between their rewards and those of the original investors is stark.

This week, specialist financial website Moneyweb calculated that the four Nova directors’ combined R15.1‑million cash salaries in the past financial year were more than double the average earned by executives at most property management companies. Those cash salaries, Moneyweb said, represented 17% of Nova’s total cash receipts for the financial year.

The four directors have near total control over how the company spends its money.

After a legal battle stretching over several years to obtain the technically public register of Nova shareholders, Moneyweb last week revealed that the directors own 87.1% of the company, and have even greater voting rights thanks to a structure that reduces debenture holders to recipients of money and information as and when the four directors see fit.

The directors value their shareholding, which in effect they received for free, at more than R1‑billion.

Nova chief executive Haese played a pivotal role at Sharemax before it collapsed, and fellow director Koekemoer was also a director of Sharemax for several years.

It is clear that directors pay themselves first from the company’s proceeds before any payments to the debenture holders they are responsible for, Moneyweb said. As a result, averaged over the past two financial years, Nova directors paid themselves out R3.6‑million each a year. The 31 000 debenture holders whose money they manage were paid an average of just less than R400 each.

Average payments to debenture holders are a poor metric, because often the Nova directors do not see fit to provide. In the last communication Morris received, Nova was self-congratulatory about a 2013 decision “to reduce and/or cease projected monthly return payments” to debenture holders in favour of using the cash to refurbish shopping centres.

Morris did not get any real say in the decision to pay her no interest, just as she was never really consulted when Sharemax morphed into Nova, or even on how her pension would be invested in the first place. In fact, she did not understand the mechanism of the investment. But then, nor did her investment adviser.

Morris thought she was putting her money into The Villa, a large shopping centre to be built east of Pretoria. That sort of bricks-and-mortar investment suited her risk appetite — extremely low — as it did many pensioners, which seems to be the main reason Sharemax drew so many of their ilk.

What her savings were actually buying, later perusal of a prospectus would reveal, was “an unsecured subordinated interest rate acknowledgment of debt linked to a share”. In the rush to get her money invested, that went over Morris’s head. Her investment adviser had been “hounding” her about when she would receive her pension lump sum, she recalls.

The very morning it landed in her bank account he accompanied her to the bank, explained to the teller what she wanted, took the resulting cheque from the teller and had Morris sign some forms. Interrogation of the mechanism of the investment was limited.

“I said to him: ‘Are you absolutely positive that I’m not being conned here?’ and he said: ‘No,’” she recounts of the 20-minute transaction.

Investment advisers were notoriously keen on Sharemax, which paid very large upfront commissions: like the current Nova directors, advisers got paid regardless of whether the risk their clients were taking paid off.

And some, like Morris’s adviser, had no understanding of that risk, the office of the ombud for financial services providers, known as the FAIS ombud, has consistently ruled.

“It is apparent from [Morris’s advisor’s] version that he had no idea just what the investment was about and, as such, could not appreciate that the complainant was lending money to an entity, which entity would in turn lend the funds to a developer, leaving investors with no form of security whatsoever,” ombud Noluntu Bam ruled in Morris’s case this August.

There was also the small detail that the shopping centre Morris was supposedly investing in had not yet been built and could therefore not generate rental income to pay her 12.5% interest — the promised payments could only come from the investments of other people. Although Sharemax has never been found by a court to have been one, that is the common structure of all Ponzi schemes.

The FAIS ombud ordered Morris’s adviser to repay her investment in full, under rules that make advisers liable for losses incurred because of their negligence. For a short while it looked as if she would get back her savings. Then she was notified that her adviser had appealed against the ruling.

That leaves only the chance that the four well-paid directors of Nova will see fit to direct some money her way. But she is not overly optimistic, and she is not alone.

“The investors who complain to this office have received no credible information as to the steps that are being taken to repay their investment,” Bam wrote in May about another Sharemax-related complaint.

“Most investors see incomplete and ghost buildings all around, with no suggestion that they will ever recover their money.”

But in a June letter the Nova board told Morris that the various hurdles to cashing in on her partially built shopping centre were “constantly being addressed by the board” — just as it has been telling her since at least 2014.

Nova did not answer detailed questions. Earlier this week, chief executive Haese told Moneyweb she would no longer provide information because it “will be twisted and used out of context for the purpose of further negative reporting

Sharemax woes not yet over

Sharemax woes not yet over
29 Mar 2011
Forensic investigator, Pierre Hough, claims that an offer of compromise to Sharemax creditors won’t resolve problems facing investors in the scheme.

Sharemax’s application for permission from the High Court to reach an offer of compromise with creditors may be halted according to Chase International managing director Pierre Hough.

He says the planned offer of compromise is trying to legalise an illegal act and is prejudicial to the rights of prospective investors.

Hough, who is a business strategist and specialist forensic investigator, alleges that there were no investors or shareholders in either The Villa or Zambezi Retail Park because a condition that had to be met for the scheme to become effective had not been fulfilled.

He says this condition was that the properties be transferred to the syndication vehicle and this condition had not been met. He says that in terms of the government notice on property syndications, the money deposited by prospective investors into the scheme had to be repaid to them

Hough says that the government notice is clear: the money deposited must be repaid to the applicants and he claims, the issue of share certificates to prospective investors is “highly irregular” and “possibly fraudulent”.

Meanwhile, Dawie Roodt, chairman of the Efficient Group and a director of Sharemax said that he cannot comment on claims that there are no shareholders in Zambezi Retail Park to The Villa.

He confirmed that the planned offer of compromise would probably involve four Sharemax schemes: Zambezi Retail Park, The Villa and Sharemax’s income and growth plans. He says the application to the High Court will be launched soon.

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About the Author
Paddy Hartdegen
Paddy Hartdegen

Freelance columnist at property24.com.

Sharemax: director unhappy over cold shoulder

Sharemax: director unhappy over cold shoulder

Independent directors Hartzenberg and Maartens are not directors of new company.
Julius Cobbett  /  29 March 2012 12:22

JOHANNESBURG – The Sharemax rescue scheme has resulted in directors Dominique Haese and Dirk Koekemoer strengthening their control of investors’ assets.
This is because two independent directors of the syndication companies, former judge Willie Hartzenberg and Sharemax investor Koos Maartens have not been appointed directors of the new company formed as part of the Sharemax rescue scheme.
The new public company, Nova Property Group Holdings, owns the entire Sharemax property portfolio. Company records show that it has just three directors: Haese, Koekemoer and accountant Rudi Badenhorst.
Two of these directors, Haese and Koekemoer, were involved with the old Sharemax structure. Thus, the Nova board is dominated by directors who are arguably responsible for getting Sharemax investors into the pickle they currently find themselves in.
Elderly Sharemax investor Koos Maartens was appointed to the boards of the various Sharemax boards after the resignation of economist Dawie Roodt.
Maartens tells Moneyweb that he was asked by Haese whether he wished to continue his involvement with Sharemax as a director of Nova. He expressed his wish to do so.
However, Maartens says that he has not received any invitations to attend board meetings.
Maartens says his efforts to get an explanation for this apparent “freezing out” have been unsuccessful.
It seems reasonable for Sharemax investors to ask why they lack representation on the Nova board.
Haese has been involved with Sharemax for several years. Haese was Sharemax’s financial director before being promoted to managing director in October 2010 after the resignation of founder Willie Botha. Haese’s father-in-law, Waldemar Gustav Haese, has performed a highly controversial valuation on Flora Centre. The Flora Centre’s auditors, ACT Audit Solutions, have accused WG Haese of lacking independence.
Furthermore, the independence of Nova’s third director, accountant Rudi Badenhorst, has been questioned. Badenhorst has long shared his business premises with Sharemax Investments. He was also one of the directors to bill investors hundreds of thousands of rand for consulting fees as part of the rescue process. (See: Sharemax: Big bucks for syndication directors.)
At last count Badenhorst had earned R600 000 for consulting services billed at R1 500 an hour. A further amount of R500 000 had been budgeted for his services.
In contrast, Badenhorst’s co-independent directors, Hartzenberg and Maartens were paid considerably less for their efforts. Hartzenberg stands to make R240 000. For Maartens an amount of R76 000 was budgeted.
Maartens’s predecessor, economist Dawie Roodt, did not receive any payment for his services as an independent director.
Judge Hartzenberg does not share Maartens’s concerns about the composition of the Nova board.
Hartzenberg says he would not wish to serve as a director of Nova, even if asked, because it would take up too much of his time.
Hartzenberg says he is confident that the board is in competent hands.
“I have no problem with Dirk and Dominique,” says Hartzenberg. “I can tell you, if there’s someone who knows what’s going on it’s Dominique. I am impressed with that woman and I’ve worked with many people in my time. I’m not scared that she’d be pulling wool over the eyes of investors.”
Hartzenberg also had a good word for corporate lawyer Connie Myburgh, who has been the architect of the Sharemax rescue scheme. “If it was not for Connie Myburgh, the whole thing would have been liquidated.”
Hartzenberg says that the press “has a warped idea” of what happened with Sharemax. “The press gave the impression that there was fraud and that sort of thing, which there was not.”
At the time of writing Haese had not responded to e-mailed and telephonic requests for comment.

Sharemax summary

https://www.google.com/search?rlz=1C1GKLA_enZA897ZA897&sxsrf=ALeKk02kO57fa00_Zx3EduStFv3fieqlqA:1595592805500&source=univ&tbm=isch&q=citizen+alert+za+sharemax&sa=X&ved=2ahUKEwi3zIKz7uXqAhVpaRUIHUI2AGIQsAR6BAgKEAE&biw=1280&bih=913

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04 November 2013

FSB weighs in on controversial Sharemax opinion

Responds to Sharemax director’s comments on Fais Ombud complaints.

JOHANNESBURG – The Financial Services Board (FSB) has found it necessary to comment on a circular issued by Sharemax director Dominique Haese. The circular, dated August 6, 2013, suggests to investors that if they pursue complaints against their financial advisers with the Fais Ombud, they may forfeit rights to investment returns or repayments from the Nova Group.

The Nova Group has approximately 33 000 investors who acquired shares or debentures as a result of the restructure of property syndications promoted by Sharemax Investments. The restructure resulted out of a scheme of arrangement which was sanctioned by the High Court on January 20, 2012.

The Nova Group is controlled by four directors, two of whom, Dominique Haese and Dirk Koekemoer, played important roles in the promotion of Sharemax investment products.

On October 25 the FSB issued a media release in response to Haese’s circular. Says the FSB: “The circular may be read as suggesting that the Fais Ombud no longer has jurisdiction to deal with complaints of former Sharemax investors, not only against the Sharemax companies themselves, but also against their directors or functionaries.”

“Further, that pursuing claims through the offices of the Ombud may be interpreted as that such claimants have abandoned and repudiated their claims arising from the schemes of arrangement.

“The FSB cautions, without suggesting a particular alternative, that views on the above issues are still subject to adjudication by the FSB Appeal Board and until this has been decided upon, investors are well advised to consult their legal representatives before taking a decision on the matter.”

The FSB’s recommendation that investors “consult their legal representatives” may be come as cold and cynical advice to those investors, many of them pensioners, who are struggling to finance living expenses, let alone legal ones. The very purpose of the Fais Ombud’s office is to provide recourse to victims of bad financial advice, especially to those who can’t afford legal expenses.

The FSB notes that a number of determinations have been made by the Fais Ombud against Sharemax, persons or entities associated with it, and independent intermediaries who had advised their clients to invest in Sharemax products.

Haese is one of those people who have been on the receiving end of the Ombud’s determinations. SEE PREVIOUS POSTS ON THIS BLOG

”Many of these determinations have been taken on appeal to the FSB Appeal Board where they are still pending,” says the FSB. “In one such instance the Chairman of the Appeal Board has granted leave to appeal.

“The FSB is trying its best to have this appeal heard as soon as possible. However, nothing prevents any former investor in Sharemax from lodging complaint with the FAIS Ombud against any party considered to be liable for any loss suffered.

“Once the outcome of the appeal referred to, is known, the FSB will issue a follow-up media release in order to guide former Sharemax investors as to their further options.”

The original written by Julius Corbett appears on Moneyweb.

Sharemax law firm accused of extortion

Investor ‘living in fear’ of damages action

• Pretoria News
• 27 Jul 2011
• Roy Cokayne

PHOTO: SIMPHIWE MBOKAZI

The Zambezi Mall in Pretoria is one of the syndications in the Sharemax stable. Its law firm, Weavind & Weavind, faces charges of unprofessional conduct.

SHAREMAX attorneys Weavind & Weavind have been accused of attempted extortion and unprofessional conduct, related to a complaint lodged against the law firm with the Law Society of the Northern Provinces by prospective investors in property syndication schemes marketed by Sharemax.

Pierre Hough, a multidisciplinary strategist and investigator of serious economic crime, claims attempts were made to get his client, Toffie Risk, to withdraw his complaint to the law society and the SAPS. Hough said this week that Risk was living in fear over a damages action instituted against him by Weavind & Weavind.

He alleged Weavind & Weavind had made an offer to Risk that if he signed a document and disassociated himself from Hough’s advice and from Hough as a consultant, it would withdraw the damages action against him.

“This is attempted extortion, which is a very serious matter, and unprofessional conduct. It also amounts to attempting to defeat the ends

of justice,” Hough said. Weavind & Weavind today faces a law society disciplinary committee hearing related to an initial complaint made by Hough, Risk and another of Hough’s clients, JMM Bosman. They claim misappropriation of trust funds in Sharemax schemes, by releasing funds from the law firm’s trust account in contravention of a government prohibition.

A R200 000 claim has been lodged with the Attor neys Fidelity Fund as well.

Weavind & Weavind at the time ignored a request from Business Report for comment about the initial complaint.

However, in response to a letter of demand from an attor ney representing 11 other investors in Sharemax schemes, Weavind & Weavind claimed the government prohibition was not applicable to the firm. The law firm subsequently instituted a multimillion-rand damages claim against Risk, Bosman, Hough and his firm, Chase International, for defamation.

Hough said at the time that the claims were an attempt to intimidate his clients.

Weavind & Weavind managing director Raiford Johnson said the allegations of attempted extortion and defeating the ends of justice were extremely serious but neither his firm nor anyone acting on its instructions or with its consent had made any offer, as suggested, to either Bosman or Risk or to anybody acting on behalf of the complainants to the law society.

Johnson said the claims were “totally false, slanderous and obviously made with the intent of causing us (Weavind & Weavind) huge harm”.

Hough said he had lodged a further complaint with the law society last week about the alleged attempted extortion and unprofessional conduct by Weavind & Weavind.

Jaco Fourie, the senior legal official of the disciplinary department at the Law Society of the Northern Provinces, declined to confirm if such a complaint had been lodged. He said a committee of the law society had been provided with certain documentation for the hearing this week and it would consider and discuss them at the hearing.

But, Fourie added, as far as he knew, the people Hough was representing “had withdrawn their complaints” and these allegations now only came from Hough.

Bosman has withdrawn her complaint to the law society while Weavind & Weavind has withdrawn the damages action against her.

Bosman confir med she had contacted Weavind & Weavind and informed the firm she no longer wanted to continue with her complaint.

“I did not have the energy, time or money to continue with it,” she said.

Charle Rossouw, Toffie Risk’s attorney, declined to comment on whether Risk had withdrawn his complaint against Weavind & Weavind.

Rossouw confirmed they had approached Weavind & Weavind after reviewing Risk’s situation in relation to the summons issued against him for damages.

“There were no offers from Weavind & Weavind in that respect and certain discussions followed thereafter but I cannot discuss them,” he said.


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Law firm: Summons against Sharemax

14 Jan 2011

Weavind & Weavind, the attorneys acting for Sharemax Investments has launched a R9-million damages claim against Pierre Hough, managing director of Chase International, Chase Consulting, financial planner Toffie Risk and Johanna Margaretha Magdalena Bosman, an investor in Zambezi Retail Park syndication.

The firm is claiming R2-million while its seven directors are each claiming R1-million from Bosman, Hough and Chase Consulting because of damages that they allege were a result of Bosman’s conduct.

In its particulars of claim, Weavind & Weavind list a number of statements alleging that funds deposited into the firm’s trust account had been stolen. The allegations were apparently made in affidavits drafted in support of a complaint to the Law Society of Northern Provinces and a criminal case.

Weavind & Weavind says the allegations are wrongful and defamatory and implied that the directors were implicit in the theft and shared the proceeds. It claims the statements were made with the intention to defame the firm and its directors and injure their reputation.

Hough, who had assisted in compiling the affidavits, said that the damages claim lacked substance and merit and he confirmed that all the respondents named in the Weavind & Weavind application would defend the action.

He said the damages claim was aimed at scaring off other investors in the syndication to prevent them from lodging claims against the law firm.

Jaco Fourie, a senior legal official within the disciplinary department of the Law Society of the Northern Provinces says the organisation is awaiting a response from Hough to the allegations made by Weavind & Weavind. Once it has received the response it will present its evidence to a disciplinary committee of the law society.

A case of fraud was opened against the firm after Sharemax defaulted on monthly payments to investors in September last year. The commercial crimes unit is investigating the case.

Readers' Comments Have a comment about this article? Email us now. 

It was the illegal release of the trust funds that started the whole feeding frenzy and made a joke of all the investor safeguards provided for in the Unfair Business Practices Act. Go for them Pierre. You have a lot of support out here - how about us starting a fund to pay a bounty on each one of those involved being put behind bars. - L. Oldacre

Hi, lees News 24 van vandag,kyk in watter weelde leef Botha en Brand,hoe kan hulle met die bedrog wegkom terwyl ek en my vrou, altwee pensionarise, van dag tot dag moet leef op genade,ek kan ook my eiendom verloor,het nie meer n inkomste nie en ons leef op R2,000 n maand.Mense,hoe werk die wet dat skelms ons geld kan vat en daarmee gegkom?Ek wat n leek is weet nie watter kant toe nie,het probeer werk kry maar is te oud,het 10 jaar terug n hartomleining gehad.Het ook nie geld om n saak te maak nie,glo nie dit sou in alle geval gehelp het nie.WAT kan ek doen,groete. - Willem

1. Society dismisses Sharemax attorneys case

   https://www.iol.co.za/business-report/economy/...

   A disciplinary hearing by the Law Society of the Northern Provinces into complaints lodged against Sharemax attorneys Weavind & ... Johanna Bosman and Toffie Risk, are believed to have withdrawn ...

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1. Law firm: Summons against Sharemax - Commercial, News

   https://www.property24.com/articles/law-firm-summons-against-sharemax/12967

   Weavind & Weavind, the attorneys acting for Sharemax Investments has launched a R9-million damages claim against Pierre Hough, managing director of Chase International, Chase Consulting, financial planner Toffie Risk and Johanna Margaretha Magdalena Bosman, …

Sharemax -FSB weighs in on controversial Sharemax opinion

04 November 2013

FSB weighs in on controversial Sharemax opinion

Responds to Sharemax director’s comments on Fais Ombud complaints.

JOHANNESBURG – The Financial Services Board (FSB) has found it necessary to comment on a circular issued by Sharemax director Dominique Haese. The circular, dated August 6, 2013, suggests to investors that if they pursue complaints against their financial advisers with the Fais Ombud, they may forfeit rights to investment returns or repayments from the Nova Group.

The Nova Group has approximately 33 000 investors who acquired shares or debentures as a result of the restructure of property syndications promoted by Sharemax Investments. The restructure resulted out of a scheme of arrangement which was sanctioned by the High Court on January 20, 2012.

The Nova Group is controlled by four directors, two of whom, Dominique Haese and Dirk Koekemoer, played important roles in the promotion of Sharemax investment products.

On October 25 the FSB issued a media release in response to Haese’s circular. Says the FSB: “The circular may be read as suggesting that the Fais Ombud no longer has jurisdiction to deal with complaints of former Sharemax investors, not only against the Sharemax companies themselves, but also against their directors or functionaries.”

“Further, that pursuing claims through the offices of the Ombud may be interpreted as that such claimants have abandoned and repudiated their claims arising from the schemes of arrangement.

“The FSB cautions, without suggesting a particular alternative, that views on the above issues are still subject to adjudication by the FSB Appeal Board and until this has been decided upon, investors are well advised to consult their legal representatives before taking a decision on the matter.”

The FSB’s recommendation that investors “consult their legal representatives” may be come as cold and cynical advice to those investors, many of them pensioners, who are struggling to finance living expenses, let alone legal ones. The very purpose of the Fais Ombud’s office is to provide recourse to victims of bad financial advice, especially to those who can’t afford legal expenses.

The FSB notes that a number of determinations have been made by the Fais Ombud against Sharemax, persons or entities associated with it, and independent intermediaries who had advised their clients to invest in Sharemax products.

Haese is one of those people who have been on the receiving end of the Ombud’s determinations. SEE PREVIOUS POSTS ON THIS BLOG

”Many of these determinations have been taken on appeal to the FSB Appeal Board where they are still pending,” says the FSB. “In one such instance the Chairman of the Appeal Board has granted leave to appeal.

“The FSB is trying its best to have this appeal heard as soon as possible. However, nothing prevents any former investor in Sharemax from lodging complaint with the FAIS Ombud against any party considered to be liable for any loss suffered.

“Once the outcome of the appeal referred to, is known, the FSB will issue a follow-up media release in order to guide former Sharemax investors as to their further options.”

The original written by Julius Corbett appears on Moneyweb.

AFRIFORUM DRAFTS ORDER FOR PRESERVATION OF PROPERTY TO PREVENT FURTHER SHAREMAX FRAUD

BY AFRIFORUM | JUN 22, 2020

AfriForum and Adv. Gerrie Nel announced during a media conference today that the Private Prosecution Unit has drafted an order of preservation to prevent the Nova Property Group (for all practical purposes a continuation of Sharemax) from selling the company’s properties at values far below its market value – at the expense of investors. AfriForum has sent this order to the National Prosecuting Authority (NPA), requesting that they bring it in a court of law.

The Asset Forfeiture Unit of the NPA can in terms of a court order keep property such as this in safe custody, but the prosecuting authority has brought no such application.

In the application that AfriForum’s Private Prosecution Unit drafted for the use of the NPA, the civil rights organisation argues that the properties in question were acquired by the proceeds of unlawful activity, including money laundering and fraud, as set out in the Prevention of Organised Crime Act, 121 of 1998, as well as the Banks Act, 94 of 1990. AfriForum has requested that the NPA take these properties into its custody, since the property was instrumental in committing the abovementioned crimes against the investors, and because Nova has been in control thereof since 2012. Nova was however founded with the proceeds of illegal deposits that had been accepted by Sharemax from the public.

According to Adv. Nel, his unit’s investigation has also yielded evidence that the board members of Nova pay themselves excessive salaries, as well as paying themselves before paying debentures. “It also seems that Nova is getting rid of buildings in an attempt to avoid liquidation. The actions of the Nova board are unscrupulous, and we have therefore been compelled to draft this application and send it to the NPA to keep investors from suffering further losses.”

“Many of the investors in this scheme are elderly people with meagre resources who hoped to make an income by investing their nest eggs. The board of Nova/Sharemax have lived the high life at the expense of these people and as a civil rights organisation, AfriForum cannot allow them to not being held accountable. This scheme can be equated to the operation of a crime syndicate and for this reason their actions have to be stopped immediately,” says Kallie Kriel, CEO of AfriForum.