Johannesburg - The three so-called independent directors - Dawie Roodt, Judge Willie Hartzenberg and Rudi Badenhorst - appointed on Tuesday to the boards of the 33 syndications of troubled property syndicate Sharemax were installed by the outgoing boards and not by the statutory managers appointed by the Reserve Bank.
These boards were made up exclusively of the previous directors of Sharemax itself.
They can therefore hardly be called independent.
The press release by Baird’s – which is acting on behalf of Sharemax – reads: "The Sharemax statutory managers appointed by the South African Reserve Bank announced the appointment of three independent non-executive directors for all the individual property investment companies by the respective boards."
This is cleverly worded but misleading.
The respective boards, that is the old Sharemax-controlled boards of Willie Botha and Andre Brand, appointed the above-mentioned independent directors.
The statutory managers - the real powers currently in control of the billions invested in the schemes - merely "announced" the appointments.
The statutory managers will probably report to the Reserve Bank within a couple of days that all the syndications are technically and legally insolvent.
The directors of an insolvent entity, whether independent or not, have little more power than to order new toilet paper for the respective buildings.
Investors in Sharemax should not get carried away by the appointment of these so-called independent directors to the boards of the syndications.
They don't have fresh money, and stacks of fresh money is what is needed to save Zambezi Mall, the Villa as well as various other run-down and poorly-managed older buildings.
- Sake24