Disappointing at one level because the CIPC investigation into Nova and the shut-down of the Property Syndication Promotion Companies (PSPCs) – including Sharemax – has not yet moved to the next stage, viz: the release of the Investigation’s Interim Report which will herald the start of the endgame

It is our understanding that, whilst the report is ready for release (and has been for more than a year now), the current delay is internal at CIPC where problems are being experienced with the assignment of States Advocates to “head up” the further processes (this subject to clarity as to what their specific role is to be)

We hope that the release will take place in the near future so that CIPC and the investigation participants – both private sector and from state and oversight bodies – can, with minimal delay, reach consensus on the findings to be tabled in the Interim Report and move speedily on to the finalisation and production of the Final Report whereafter the findings will become public knowledge and we will then learn of them and of the proposed remedial actions to bring about restitution and, hopefully, compensation for the Sharemax investors

The other “disappointment” – or better, cause for serious concern – is the ongoing absence of the publication of the Nova Annual Financial Statements for 2024. Financial year-end is 28 February and thus, the AFS should have been published by end-August – six months after year-end as per the Companies Act requirements

The 2023 AFS were only published on 23 December ’23 and we think that we have a new record in terms of how late the ’24 publication is – and ongoing

But, why is it taking so long? Surely, in an environment of competent company management by the board and the CEO, there should not be delays every year – which is a historical fact

As per AFS ’23, there are only nine commercial properties left in the portfolio (of which, The Villa is non-operational anyway). Of the nine residential/mixed use “development” properties, there is no development under way at all (we say this based on the evidence of views of 2024 Google Maps satellite images of the properties). The contentious Cold Creek property is not included here. It was not part of the original portfolio and is not debenture linked

How hard can it be therefore, to produce and publish the AFS? What does the ongoing delay mean? Is the board having the usual problem of getting auditor sign-off of the AFS format that Nova has presented to them. Why, yet again, if indeed so?

Is the content of the AFS of such a nature that it will actually show that Nova is not a going concern anymore and is if fact, insolvent – which has been inferred in the media, out of previous AFS. Would such a situation cause CIPC to rule that Nova must stop trading? What would the implications of that be?

In the meantime, no progress towards debenture repayment and no communication from Nova since 23 December, 2023!

What is the Nova board hiding? It seems pretty clear that they have something to hide and it can’t be good news

All this whilst the executive directors continue to milk the company via their “market related” remuneration. The ’23 financial year executive director remuneration (actually shown as 2022 remuneration but perhaps this is a “typing error”) for Myburgh, Haese and Osterloh, was 12.2 million gross. Ironically, 4.8 million of that went to Sars as personal tax and thus, they (Sars), benefit out of the ineffective management and operations of the company at the expense of the Debenture Holders, the company’s largest creditor

Teleurstellend op een vlak omdat die CIPC-ondersoek na Nova en die sluiting van die Property Syndication Promotion Companies (PSPCs) – insluitend Sharemax – nog nie na die volgende stadium beweeg het nie, naamlik: die vrystelling van die Ondersoek se Tussentydse Verslag wat die begin van die eindspel hoort te wees

Ons verstaan ​​dat, alhoewel die verslag gereed vir vrystelling is (en nou al meer as ‘n jaar), die huidige vertraging intern by CIPC is waar probleme ondervind word met die toewysing van die saak aan Staat Advokate vir deelname aan die verdere prosesse (dié is onderhewig aan opheldering oor wat hul spesifieke rol moet wees)

Ons hoop dat die vrystelling in die nabye toekoms sal plaasvind sodat CIPC en die ondersoekdeelnemers – beide die in die private sektor en van staats- en toesigliggame – met minimale vertraging konsensus kan bereik oor die bevindings wat in die tussentydse verslag ter tafel gelê moet word om spoedig te kan skuif na die finalisering en produksie van die Finale Verslag, waarna die bevindinge publieke kennis sal word en ons dan daarvan sal leer en van die voorgestelde regstellende aksies om restitusie en, hopelik, vergoeding vir die Sharemax beleggers

Die ander “teleurstelling” – of beter, rede tot ernstige kommer – is die voortdurende afwesigheid van die publikasie van die Nova Finansiële Jaarstate vir 2024. Finansiële jaareinde is 28 Februarie en dus moes die AFS teen einde Augustus gepubliseer gewees het – ses maande na jaareinde volgens die vereistes van die Maatskappywet

Die 2023 AFS is eers op 23 Desember ’23 gepubliseer en ons dink dat ons ‘n nuwe rekord het in terme van hoe laat die ’24 publikasie is – en nog aan die gang is

Maar hoekom vat dit so lank? Sekerlik, in ‘n omgewing van bekwame maatskappybestuur deur die direksie en die “CEO” behoort daar nie elke jaar vertragings te wees nie – wat ‘n historiese feit is

Volgens AFS ’23 is daar slegs nege kommersiële eiendomme oor in die portefeulje (waarvan The Villa in elk geval nie-operasioneel is nie). Van die nege residensiële/gemengdegebruik “ontwikkeling”-eiendomme is daar geen ontwikkeling aan die gang nie (ons sê dit op grond van die bewyse van 2024 Google Maps-satellietbeelde van die eiendomme). Die omstrede Cold Creek-eiendom is nie hier ingesluit nie. Dit was nie deel van die oorspronklike portefeulje en is nie skuldbrief gekoppel nie

Hoe moeilik kan dit dus wees om die AFS klaar te maak en te publiseer? Wat beteken die voortdurende vertraging? Het die direksie die gewone probleem om ouditeur-aftekening te kry van die AFS-formaat wat Nova aan hulle voorgehou het. Waarom, weereens, indien dit wel so is?

Is die inhoud van die AFS van so ‘n aard dat dit eintlik sal wys dat Nova nie meer ‘n “going concern” is nie en wel insolvent is – wat in die media afgelei is, uit vorige AFS. Sou so ‘n situasie veroorsaak dat CIPC beslis dat Nova moet ophou handel dryf? Wat sou die implikasies daarvan wees?

Intussen, geen vordering met die terugbetaling van die oorblywende skuldbriewe en geen kommunikasie vanaf Nova sedert 23 Desember 2023 nie!

Wat steek die Nova-raad weg? Dit lyk redelik duidelik dat hulle iets het om weg te steek en dit kan nie goeie nuus wees nie

Dit alles terwyl die uitvoerende direkteure voortgaan om die maatskappy te melk deur hul “markverwante” vergoeding. Die ’23-boekjaar se uitvoerende direkteursvergoeding (eintlik getoon as 2022-vergoeding, maar miskien is dit ‘n “tikfout”) vir Myburgh, Haese en Osterloh, was 12,2 miljoen bruto. Ironies genoeg het 4,8 miljoen daarvan na Sars gegaan as persoonlike belasting en dus het hulle (Sars) gebaat by die oneffektiewe bestuur en bedrywighede van die maatskappy ten koste van die Skuldbriefhouers, die maatskappy se grootste skuldeiser