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.
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.
22 JUN 2012 12:15
SUBMIT A COMMENTBIZLIKE
Business Report says that the registrar of banks has lodged a criminal complaint against Sharemax Investments and 33 property syndication schemes it promoted for alleged contraventions of the Banks Act.
About 40 000 investors invested about R4,5-billion in Sharemax's various property syndications. The Serious Economic Offences Unit at the Directorate for Priority Crime Investigations, the Hawks, is investigating the alleged contraventions.
Michael Blackbeard, the deputy registrar of banks at the Reserve Bank says the statutory managers appointed to manage Sharemax's affairs found the funding models used for syndications might have contravened the Banks Act.
Comment : The SARB staes that Sharemax might have contravened the banks Act. How could you stop something if you are not sure. That is exactly what they did !
( Brokers have to take the flack and pay up ???? )
Bosses laugh all the way to the bank including their attorney"s
Jaques Pauw Reports
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Johannesburg - This is the luxury life of the two top managers of collapsed property syndication company Sharemax - while thousands of investors have lost most, if not all, of their money.
City Press has traced about R250m of assets owned by trusts and companies of Sharemax’s former managing director, Willie Botha, and his marketing manager, Andre Brand.
Botha and Brand were, for almost a decade, at the helm of Sharemax as about 40 000 people invested an estimated R5bn in the company’s 50 property syndicates.
The Reserve Bank ruled in May last year that Sharemax had contravened the Banks Act and had illegally collected deposits from investors.
City Press can reveal this week that one of Brand’s acquaintances, Wietz Nell, has handed incriminating documents and information to the police’s Hawks unit.
pocketed R53m in “commission” from a Sharemax front company. Brand demanded a R24.5m share from Botha.
Botha this week ignored multiple attempts to get comment.
Brand said this week that Nell had obtained the documents dishonestly, but he did not deny their veracity.
Brand said that he had in the meantime cleared his complaint with Botha and that he withdrew any allegations against him. He said he now believed the money was paid legally to Botha.
Tomorrow, a group of Sharemax investors plan to bring an urgent court application to declare Sharemax bankrupt, and to freeze the assets of Botha and Brand.
Among the assets that the investors want frozen is Botha’s luxury yacht, which he keeps in the Egyptian port of Hurghada in the Red Sea.
The Italian-designed Scuba Scene is apparently worth between R120m and R150m, and is wholly owned by the Willem Botha Family Trust.
The boat has its own website and is described as “43 metres of classic nautical beauty and luxury”.
It says the Scuba Scene is a “true marvel of design, technology and style to provide all its passengers with an aesthetically pleasing masterpiece”.
The investors also want to ask the high court to prevent Brand from selling his 3 000 hectare game farm near Thabazimbi in Limpopo.
The game farm, Thaba Motswere, has been valued at R79m, and has giraffe, eland, kudu, gemsbok, cheetah and leopard.
The farm’s lodge alone cost Brand an estimated R20m to build and resembles a five-star hotel with all possible amenities.
Brand is desperate to sell the farm and even considered a price of R21.5m last month.
Botha has an equally luxurious game farm in Marken in Limpopo that is thought to be worth even more as it has the Big Five – elephant, rhino, buffalo, lion and cheetah.
Botha lives in a double-storey villa in the exclusive Silver Lakes Estate in Pretoria. Brand recently signed a contract to sell his mansion in Mooikloof in Pretoria for R15m.
Botha was in August “relieved” of his duties and resigned as director. Brand has also since left the company.
In September, the Reserve Bank put Sharemax under statutory management, ordering Sharemax to repay its investors, but there was no money left to do so.
The documents that City Press obtained shows that after Botha and Brand had left Sharemax, they were still paid R15m commission.
The company that is managing Sharemax on behalf of the Reserve Bank, Frontier Asset Management and Investments, did not respond to queries this week.
A forensic auditor, André Prakke, studied the documents obtained by City Press and concluded that there was evidence of money laundering, theft and fraud.
Prakke says that 80% of the money that was invested in Sharemax is gone.
Prakke has investigated Sharemax for many years and has submitted statements about the company to the high court.
He says that the commission that Brand refers to in his memos to Botha has never been revealed in any of Sharemax’s property portfolios.
- City Press
Pierre Hough, the managing director of Chase International and a business strategist who also conducts specialist forensic investigation for clients, said he had lodged the claim on behalf of one of his clients with the fidelity fund of the law society yesterday and with the AIIF last month.
Property for sale in Sharm-el-