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Last hope for Fidentia shareholders

The last hope for Fidentia investors to get some of their money back rests on a “ramshackle” hotel in Paarl – the Santé Hotel & Spa, which is being auctioned on December 1.

It was the last of Fidentia’s assets to be disposed of and brought an end to the “opulence and luxury” of Fidentia, said the auctioneer, ClareMart Auction Group.

More than R1 billion is still being claimed by investors, according to the latest report by the curator.

J Arthur Brown, the convicted fraudster who headed up Fidentia, is serving a 15-year sentence for fraud amounting to almost R300 million.

He was found not guilty on seven other charges of corruption, money laundering and fraud.

Fidentia has been under curatorship since February 2007.

George Papadakis, one of the curators, said the Santé property was bought in 2004 and 2005. The total purchase price was about R117 million.

A further R41.4 million in management fees has been spent since Fidentia was placed under curatorship.

The latest curator report makes it clear that there were various problems with the property, which was being managed by Orion Hotels.

“It appears as if Orion is struggling to manage the hotel in a financially sustainable manner,” reads the report.

Arrear levies of R4.75 million were paid in January to the homeowners’ association of the estate that the hotel is located on, according to the report.

John Levin, one of the curators, this week confirmed that overdue municipal accounts amounting to R2.3 million had also been settled – “after a big discount”.

The agreement with Orion is that it will leave the premises 60 days after the property has been sold.

Recently, guests have not been impressed with standards at the hotel.

As long as you’re looking out of the window at the fantastic view of the mountains, it’s a great experience, but the rooms are in disarray – there are broken lights, rickety fridges and towel rails that are not secured to the walls.

“The rooms look amazing until you see how dirty the doors, plug points and floors are,” Lorinda Voges of Sandton wrote on the travel website TripAdviser on October 1.

The hotel manager repeatedly apologises to guests on the website for their poor experiences and undertakes to fix problems.

Visitors who were satisfied with their stay referred to the beautiful surroundings.

Guests were also satisfied with the spa, which is managed by Bakwena.

During City Press sister newspaper Rapport’s visit to the estate, the hotel seemed neat, but there were bird droppings along the walls and on the paving, dusty corners full of spiderwebs and paint that was peeling off the walls in places.

According to ClareMart’s statement, the hotel is a good investment opportunity.

The hotel has a bar, a billiards room, an entertainment area, a patio at the swimming pool and 10 luxury suites. The spa includes a Jacuzzi and a heated indoor swimming pool.

The conference centre and three villas will also be auctioned off.

According to the curator’s report, Grant Thornton, the property valuers, evaluated the property, but the findings are confidential.

The total value of claims that investors have brought against Fidentia amounts to R1 366 960 951, according to the report.

Of this, R234 111 729 was paid out by May 31 last year.

The sum of the claims that are still outstanding is therefore R1 132 849 222.

But aside from the hotel, there is only a cash amount of about R20 million, which, together with the proceeds from the sale of the hotel, can be paid out to investors.

The tanzanite gem that was listed as an asset in the last report is not worth much, said Levin, and nobody was interested in buying it.

Fidentia’s 26% share in the company Moshate is also not worth much. Moshate invested in another company that wanted to open a cemetery in Johannesburg, but it was unable to secure a licence.

Jonathan Smiedt, CEO of ClareMart, said an “insurmountable amount of damage” had been done by Fidentia.

“The auction can never entirely make up for the financial crisis so many people are facing, but we are aiming to get the best possible price for this beautiful property so we can contribute to the compensation of Fidentia’s victims in some measure.”

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