The BRP is the responsibility of Nova Property who acquired the Sharemax property assets in order to manage and grow them so as to enable debenture repayment
Fourteen years later and we are still waiting for repayment and this waiting has been the name of the game for most of that time
Right now, we await:
* The 2024 Annual Financial Statements which should have been published by 31 August (we side with the CIPC in the interpretation of the Companies Act content as regards the deadline for AFS publication). This delay occurs every year and it leaves questions about the viability of Nova and the chances of debenture repayment each time * We await communication from Nova as to the status and state of the commercial properties and the residential developments. We all know, of course, that the Nova methodology is to communicate as little as possible and then often, only when forced to do so. Nova inform the Debenture Holders of the status of the properties and developments only once per year via their Communiqué Nova Group Update documents that they publish simultaneously with the AFS. A quick review of the 2023 Communiqué in the Nova web site (www.novaproopertygroup.co.za <www.novaproopertygroup.co.za> ) will show how inadequate these are and do nothing to create any form of confidence in the company
Of course, we also await repayment of the remaining debentures listed at 2.24 billion in the 23 AFS. There has been no repayment since 2013 when Nova started selling off properties in the portfolio with the aim of creating working capital to keep the company afloat. There was no consultation with the Debenture Holders and certainly, no permission was sought of or given by any body. As an early outcome of their investigation into Nova, CIPC put a stop to property sales in order to preserve what real estate assets remained on the books
And, we also await action from the Debenture Trustee, JP Tromp
Tromp was elected as the new Trustee at a series of meetings late in 2021 and early 2022
NDCAG remains convinced that this election was rigged. The meetings were chaired by Connie Mybyurgh (Nova Chairman) and it appeared right from the start that the total number of proxy votes ostensibly given by Debenture Holders to Nova and empowering Nova to vote on their behalf seemed way out of line. Myburgh declined to share any information on the proxy votes received by the company ahead of the meetings
Further, NDCAG challenged Myburghs right to convene the election meetings due to the fact that the period for setting up such meetings as laid down in the Debenture Trust Deed had expired and as a result, the replacement election arrangements had by default, passed into the hands of the Debenture Holders
Myburgh pre-empted our challenge through manipulation of the recording of the previous Trustees resignation. In reaction to media posts and other speculation he insisted that the company had not accepted the previous Trustees resignation until a much later date which meant that the capability/responsibility to convene the election process was still that of the company (and, dates and time frames can be provided after further research)
This was pure manipulation on Myburghs part and the only reason that he eventually called for election of the new Trustee was to get CIPC off his back – over the non-payment of the debentures by January 2022. He needed to have a Trustee in place in order to railroad a Debenture repayment extension through and which required a Trustees approval
Putting that challenge to the meeting, NDCAG also proposed that Deon Pienaar (long time activist in the sphere of the alleged illegalities and irregularities of the shut-down of the Property Syndication Promotion Companies including Sharemax) would be a more appropriate Trustee and one who would definitely put the interests of the Debenture Holders before any other. Our objection to Tromp was that, for our part and by extension, that of the Debenture Holders, he was an unknown quantity
Why did Myburgh pick him for the Trustee role in the first place? It may well have been because he was an insider in the whole alleged plot (which it is expected, will be confirmed in the CIPC reports) to engineer the shut-down of the PSPC companies and open the door to capture the participant company assets
Why did Myburgh choose him for the Trustee role in the first place? This was possible because he was known to Myburgh, with whom Myburgh was already intimately related, business-wise, and an “insider” in the whole alleged plot (expected to be confirmed in the CIPC reports) to close the PSPC companies and open the door to capture the PSPC company’s assets
Our challenge and proposal were both rejected by Myburgh and Tromp was duly elected. His first action was to approve Novas proposed extension of the debenture repayment due date which is now an open-ended period. He subsequently informed us that the reason for this action was that, with Nova unable to repay at that time, an extension would mean that the obligation to repay would remain and that an extension would allow time for better operations success and consequent improved possibility of repayment which he deemed, at the time, to be in the best interests of the Debenture Holders
Overarching all of this is the fact that the Debenture Trust Deed is a sham. It is absolutely evident form a reading of same that the Trust Deed was put in place to cater for the needs of Nova and not for the needs and protection of the Debenture Holders. Its also clear that the Trustee is in place only to rubber-stamp whatever Myburgh needs to do relevant to the Debentures and the Debenture Holders
Further, the Trust Deed has never been registered. Why not? How was the Trust Deed approved as part of the BRP and Section 311 (Companies Act) documentation? Was this deliberate? Why did Court officials (apparently) not pick this up? Does failure to have registered the Trust Deed make it null and void if not illegal?
During the election meetings Tromp was given the opportunity to address the audience and he made very clear statements about understanding the needs of the Debenture Holders and undertook to look after their interests. Prior to this, he must have had the opportunity to study the Trust Deed and determine its true nature and its shortcomings viz a viz the interests of the Debenture Holders. Further, as a registered Chartered Accountant, were sure that he will have requested access to all of the records of the Trust only to discover again, surely, that in reality, it has no standing
Following this NDCAG initiated a discussion with him and tabled our issues regarding the absence of debenture repayment and the shortcomings of the whole Trust Deed and its provisions or lack of same
Out of that meeting we received an undertaking from Tromp to address the issues and give us feedback. Despite a number of reminders and requests for a further meeting were still waiting today
There has been new contact with Tromp and a meeting has been agreed upon. This will be tomorrow 17th October and we will report on what he has to tell us thereafter
At this late stage of the CIPC investigation into Nova and the shut-down of Sharemax and the imminent release of the Interim Report which will be followed by a Final Report of findings and required actions, can we look forward to the end of the waiting?
The time is drawing nearer when the investigation outcomes will be made public, when fingers will be pointed, when persons and entities will be called to account and whereafter, just maybe, prosecutions will be initiated
We are of the opinion that transgressors must be prosecuted, that statutory and oversight bodies which have contributed to the woes of the Sharemax Investors must be called to account and, most important, that the investors must received restitution and fair compensation after all the years of deprivation and waiting with finalisation and resolution in the very near future