Publications
Partners
Johannesburg - AH-Vest has concluded a settlement agreement with the National Empowerment Fund (NEF).
It relates to legal action instituted by the NEF against the former CEO of AH-Vest, Marci Pather, in respect of which the company had a potential contingent liability.
The dispute related to a BEE transaction concluded by the company in December 2004 in respect of which the NEF had subscribed for 8 333 333 shares in the company and in respect of which shares it had a put option against Pather, which in turn Pather could cede to the company.
Shareholder approval for a specific repurchase of shares was, however, never sought and thus the intended cession and associated specific repurchase could not be effected.
The NEF sued Pather on November 9, 2009 for an amount of R6 369 945 plus interest at 15.5% from date of demand.
Should the NEF have been successful in its action, the company was potentially exposed to a claim by Pather of approximately R10.5m.
Due to the settlement of the matter, the company is no longer indirectly exposed to the higher claim nor the interest claimed thereon.
The matter was set down for Arbitration on July 15, 2013 and at the commencement of the hearing, the controlling shareholder of AH-Vest, The Eastern Trading Company was able to negotiate a settlement agreement between the NEF and Pather in an amount of R3 000 000.
This amount is to be settled over a nine month period commencing August 7, 2013. In concluding the settlement agreement, the NEF required Eastern Trading and AH-Vest to act as sureties for the above settlement.
Eastern Trading has provided the NEF with security for Pather's obligations in the form of 9 post-dated cheques. On fulfilment of the terms of the settlement agreement, which is expected to be during or about April 2014, the 7 860 473 shares still held by the NEF will be transferred to Pather or his nominee and the company will have no further exposure to any claims from the NEF arising as a result of the dispute.
It relates to legal action instituted by the NEF against the former CEO of AH-Vest, Marci Pather, in respect of which the company had a potential contingent liability.
The dispute related to a BEE transaction concluded by the company in December 2004 in respect of which the NEF had subscribed for 8 333 333 shares in the company and in respect of which shares it had a put option against Pather, which in turn Pather could cede to the company.
Shareholder approval for a specific repurchase of shares was, however, never sought and thus the intended cession and associated specific repurchase could not be effected.
The NEF sued Pather on November 9, 2009 for an amount of R6 369 945 plus interest at 15.5% from date of demand.
Should the NEF have been successful in its action, the company was potentially exposed to a claim by Pather of approximately R10.5m.
Due to the settlement of the matter, the company is no longer indirectly exposed to the higher claim nor the interest claimed thereon.
The matter was set down for Arbitration on July 15, 2013 and at the commencement of the hearing, the controlling shareholder of AH-Vest, The Eastern Trading Company was able to negotiate a settlement agreement between the NEF and Pather in an amount of R3 000 000.
This amount is to be settled over a nine month period commencing August 7, 2013. In concluding the settlement agreement, the NEF required Eastern Trading and AH-Vest to act as sureties for the above settlement.
Eastern Trading has provided the NEF with security for Pather's obligations in the form of 9 post-dated cheques. On fulfilment of the terms of the settlement agreement, which is expected to be during or about April 2014, the 7 860 473 shares still held by the NEF will be transferred to Pather or his nominee and the company will have no further exposure to any claims from the NEF arising as a result of the dispute.
