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Sarb orders Sharemax to refund backers

Johannesburg - The South African Reserve Bank (Sarb) has directed Sharemax and its 35 syndication companies to repay funds allegedly collected illegally from investors.

Sarb spokesperson Brian Hoga said on Friday the bank has appointed two managers to oversee the repayment process.

"This is done in terms of section 84 of the Banks Act, that stays all legal action against the companies so that the managers have time to review the situation and to conduct the repayment in a manner that causes the least disruption," said Hoga.

Law firm Hahn & Hahn confirmed on Friday it has been appointed as the statutory manager.

According to the law firm, the managers will seek to put shareholders' interests first as they evaluate the state of the company and its related syndicated properties.

"We are conducting an urgent review of the companies and will inform investors of the next steps as soon as we are in a position to do so," read a statement.

Business as usual


Sharemax, led by CEO Willie Botha, has been selling shares in syndicates for 11 years, focusing especially on small shopping centres. Its most recent scheme, the development of the Zambezi Retail Park and The Villa shopping centre in Pretoria, ran out of funds and the properties were claimed by the developers, Capicol.

Capicol said on Thursday it is looking into finding its own financial backing to complete the projects and protect shareholders' interests.

Sharemax  backers are mostly pensioners, who rely on the dividend income as their only income.

According to Hahn & Hahn the statutory managers met with Sharemax in Pretoria on Thursday, and will ensure business goes ahead as usual as they evaluate the company.

The managers will take into consideration the recent offer from listed group Bonatla Property Holdings to purchase some of the Sharemax syndications.  

- Fin24.com

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