Publications
Partners
It's time for the coup de grâce for Sharemax and its property syndications. For its thousands of investors… please put them out of their misery. Declare the whole business model an illegal practice and use a general liquidation to start the process of recovering assets from all those who benefited from this illegal scheme – from the advisers who sold the products to the shareholders in Sharemax Investments, who derived considerable financial benefit from the illegal scheme over the years.
Investors and the entire financial community now need "closure". Unfortunately, they'll also have to accept that – at best – the investments in Sharemax aren't going to realise more than 20c in the rand.
It will be some consolation to investors to know all those who benefited from this illegal business practice will lose their profit and luxurious lifestyle – through the orderly liquidation of the entire group, hopefully at the insistence of the SA Reserve Bank, which in any case has the final say via its two statutory managers, Neels Alant and Jaco Spies.
The past week or two was a rather tense time for the Sharemax group. The new "independent" board – with former Judge Hartzenberg and Dawie Roodt as its spokesmen – tried hard to convince investors – with whom nobody is actually communicating and who don't have any statutory or other say in what happens – to follow a 311 scheme of arrangement route rather than liquidation.
Of course, the people they have to convince are Alant and Spies, plus Deputy Registrar of Banks Michael Blackbeard, who has become saddled with the Sharemax problem.
On the other hand, there are one or two lawyers in Pretoria who are very keen to place Sharemax and all its syndications under judicial management or liquidation.
Once again, it looks as if the Reserve Bank has the power to put a stop to that, if it likes. In brief, the difference between a 311 scheme and the process of declaring it an illegal business – which would involve compulsory repayment of all monies to the original investors – is as follows. But no matter which way it goes, there's no magic wand to wave that will save the investors, mostly elderly Afrikaans-speakers, from considerable losses. We've produced the following tables on the basis of the limited amount of information available to us to give an indication of what can happen with your investments.
Original and current value
Even the lucky investors have already lost 70c in the rand
The following table – drawn up on the basis of the information currently available on Sharemax's website – shows the existing so-called income portfolio of buildings isn't worth much any more. Many of the buildings are in rural areas and the survival of many – such as the Liberty Mall in Welkom – is already being threatened by new centres. Others, such as Flora in Florida, though in Johannesburg, have been so neglected over recent years that they won't fetch much at auction.
The listed property trusts also avoid small shopping centres in rural areas and, unlike the situation in the past, it's unlikely any of the funds would be interested in Sharemax's basket of shopping centres and office blocks.
Even under the most favourable circumstances, "vulture buyers" would probably be the only ones interested in something like Hazel Court, which is already almost fully vacant. Even vulture buyers have to look at the building's earning potential, as well as the possibility of selling it soon after at a profit.
Vulture buyers won't be very interested in a building already in a state of neglect when they have to buy it with money that has to earn at least 15%/year. And remember: the mere value of bricks and mortar property experts and quasi investment experts so often love to bandy about is often a liability rather than an asset.
Investors in such so-called income syndications have already experienced a loss of more than 50% of the supposedly guaranteed return from before September 2010 to now. Investors can also take a look at our estimated current value of the properties.
Investors are advised to be realistic and not to expect miracles. One of the characteristics of the Sharemax syndications is that the owners liked to push up the original values of the properties – such as Flora, for example, which was even sold once or twice among friends to get the value up to R118m. With the exception of Leeupoort (bought years ago) nobody will receive anything near the full value. Even Benoni Hyper – which basically has to be rebuilt before 2014 – may be worth much less than our estimate of 80c in the rand.
Our advice is to support the liquidation process, let the coup de grâce be given and get rid of management. Only then will investors receive closure.
GROWTH PLANS
Worth nothing
INVESTORS IN THE nine so-called growth projects Sharemax offered must now accept there's no longer any hope of their investments having any value at all. In fact, they probably never had any value from the start. Despite the impression created that these never were direct investments in property but rather loans for property dreams. One of the biggest of those – also the last prospectus issued by Sharemax – was for The Bay, a huge and extremely expensive golf estate on the banks of the Hartbeespoort Dam, near the Pecanwood Estate.
It's the third and last prospectus and really a piece of Africa that should be preserved. It contains the forecast of a huge development in the area and a Lanseria airport that's even projected to be bigger than OR Tambo International in a few years' time.
The fact of the matter is the approximately R75m that had apparently been collected from investors was largely used to pay the interest on Nedbank's first mortgage of R300m on The Bay. Readers and investors will recall such so-called growth projects, including The Bay, offered investors interest of 20%/year – and that's not compound interest. What's more, the interest would only have been paid after five years and was therefore, according to Sharemax, not taxable in the year in which it accrued to the investor. Fortunately, investors need no longer concern themselves about the technical point of when the tax would be payable. There won't be any interest and the capital won't be recovered either: not with a 311 scheme and liquidation, because there aren't any assets to sell.
Around R500m was apparently invested in the nine projects. More details (or should we say more details about the bad news?) about the nine projects are available on Sharemax's website.
Sharemax syndications
The plan with Zambezi and The Villa
IN A RECENT LETTER from the new "independent" board of the Sharemax syndications, the possibility was raised of a transaction addressing the problems with the Zambezi Mall and The Villa in a way that would greatly benefit investors. But please don't become too excited...
Our information is that it's only the start of the plan that Capicol, the developer of both Zambezi and The Villa, was dreaming about late last year. Briefly, the position at the two centres is that Zambezi Mall, which is built on land that still belongs to the developer, Capicol, is still incomplete. The arbitrator, who had to decide about outstanding building costs, has just decided in favour of Capicol. And Sharemax – or at least the syndication that wants to buy Zambezi Mall – will have to cough up another approximately R65m. However, Capicol head Paul Kyriacou believes the amount owing to them, after taking into account the damages, should rather be around R200m.
But cash – real cash – is what's needed to finish the centre. Think in terms of R100m to pay the arrears of R70m or so to the builder, JF Kroon (who still has a builder's lien), plus another R10m or more to complete the roadworks around the centre.
For The Villa, around R1,5bn has already been collected from the public. But its builder, JD Irons, apparently received less than R600m of that and he wants at least another R200m for the work he has already done. He also has a builder's lien over the property, which in any case still belongs to Capicol. To complete The Villa will cost another estimated R1bn.
The message that came to investors via Sharemax – investors who have already put around R2,25bn or a bit more into the two centres – is they have nothing. Their investments are totally worthless.
The Capicol offer – which will apparently be very difficult to carry out in the current climate with all the negativity associated with both centres – is briefly as follows: Let's lump the two together and then try to get a loan, hopefully from overseas, for around R1,5bn. This will be enough to complete the two centres and then they can be run as two luxury malls in Pretoria.
In about three or four years' time (make it five) the listed property companies will be so envious of both centres it will be easy to sell them for R3bn to R5bn. The income from that will be enough to repay the Sharemax investors in full – for their capital, plus even arrears interest.
Of course, there are two small problems with that offer. To date there's been no indication Capicol or anyone else is anywhere near obtaining the R1,5bn loan or investment from overseas. There's probably no one in SA who will touch either project. Property experts are also fairly sceptical about their future value and wonder whether their values will ever raise enough to repay Sharemax's investors.
No matter how far-fetched the Capicol plan may sound, it's probably the best (only?) one there is. Both properties don't belong to the Sharemax investors who put their money into Zambezi Retail Park and The Villa Retail Park. The so-called 311 scheme (or arrangement) the new board has in mind might not apply to the two buildings, the largest in the Sharemax portfolio, as they still belong to Capicol.
If the entire scheme is declared illegal, the liquidators will have a problem delivering a liquidation summons to the correct address.
Our advice to investors in Zambezi and The Villa is simple: go and have a cup of coffee at one of the many quiet shops at Zambezi (The Villa isn't open yet) and then get closure for what you've lost in both projects. It's as permanent and serious as any irrecoverable loss. The process of the Reserve Bank declaring the whole business illegal and a liquidator trying to recover something for you is all you can hope for.
To all the other role players in the entire tragic saga, we'd just like to ask you to stop trying to give some hope every now and then to especially all the elderly investors in both buildings.
INVESTORS
Who will suffer?
IN THEIR LATEST letter to investors – and probably also to the media – the Sharemax syndications' new directors make a plea for a 311 scheme, in which all sins are forgiven, rather than a liquidation process that must follow if the SA Reserve Bank declares the schemes illegal. They say liquidation will only benefit the liquidators.
In the letter, they also warn that the agents, financial advisers – whatever you want to call them – may perhaps have to repay the commissions they earned. That is, the 10% of your money divided up into several levels so nobody received more than 6%. In the worst case, even investors who received interest may be forced to repay it.
Many investors who now realise a large portion, if not all, of their money has been lost will of course be in favour of the process of "blood-letting" – let all those who shared in creating the "miracle" now repay their profits.
From the prospectuses it's easy to see who got how much of every R10 000, which was the smallest amount individuals could invest. The cost calculation is taken from prospectus No 17 for The Villa and shows clearly who received how much. Of every R10 000, 18,96% – or R1 896 – went to Sharemax, who used it as follows:
* Marketing costs (that is, commission): R1 000
* Sharemax's office expenses: R148
* Miscellaneous: R58
Profit to Sharemax: R689
If the blood must flow then it must flow. In the 21 prospectuses issued for The Villa we're aware it looks as if the marketers' portion was more than R150m. Profit to Sharemax – and, of course, its shareholders – was more than R100m. If the Reserve Bank does decide over the next few days it was an illegal scheme all that money must be repaid to investors. This includes commissions to the advisers and the profit to Sharemax, which presumably was paid to its shareholders.
Smaller amounts, such as office expenses, will be difficult to recover. The same goes for the cash interest received by investors, who have since used it for daily expenses.
The coup de grâce
When and where?
OUR INFORMATION is that the two statutory managers – Neels Alant and Jaco Spies – appointed by the Registrar of Banks to manage the business of Sharemax and the syndications, are becoming impatient. Perhaps last week was the cut-off date for the new syndications' board to put forward its proposals for a 311 scheme of arrangement. Deputy Registrar of Banks, Michael Blackbeard, the man at the head of the Sharemax business, is probably also sick and tired of having to explain everything every day.
Elsewhere there are rumours of other legal action against Sharemax and its syndications. And even wilder rumours that the shares of many of the underlying private companies that own the buildings were never transferred to the holding companies in which the public's money was invested. There's apparently also a forum of advisers dead keen to get rid of the current Sharemax board.
Of course, the Registrar holds the trump card. He can declare the whole scheme illegal before its takeover in September last year and, if so, then all the funds collected from investors must be repaid. Not one of the syndications is liquid enough or has enough assets to do so, so liquidation is then inevitable.
Sharemax scheme of arrangement
Time to knock down the house of cards
IN A LONG DISCUSSION with Finweek last week, Dawie Roodt – spokesman for the new independent board of the Sharemax syndications – admitted one of the objectives of the scheme of arrangement is for the relevant companies in the larger group to forgive each others' sins. This means the writing off of debts. Roodt tried to give the assurance that this applied only to the businesses and not people or directors.
However, Chris de Beer, of legal firm De Beer, Janse van Vuuren & De Wet (acting on behalf of a number of investors), is very concerned about proposed talks between the new directors of the schemes and the existing or former directors of Sharemax Investments. In a letter to the "independent directors", he writes: "We note with extreme concern the fact that the board of directors is on the verge of reaching an agreement with shareholders of Sharemax Investments, The shareholders of Sharemax Investments were the parties and persons who created the whole unlawful scheme to the prejudice of investors. We do not know what this agreement will entail, but if the agreement entails the indemnification of the shareholders or directors of Sharemax Investments, of any nature whatsoever, we record that whoever is responsible will be held liable by our clients. We suggest that before such agreements are concluded, the investors and their representatives should be consulted."
Forensic auditor André Prakke is just as concerned about the latest letter from the independent board and he still doubts their legality. After all, you don't become a director of 33 companies willy-nilly. Somebody must appoint you – preferably shareholders at a general meeting. And that certainly didn't happen.
Prakke also points out South Africa's new Companies Act, which comes into operation on 1 April this year, prescribes very strict action against directors who carry on trading while aware of the company's insolvency. Prakke feels that most, if not all, the syndications weren't technically or judicially insolvent right from the beginning.
Our table, which shows the liquidation value of most of the syndications will be somewhere in the region of 20c to 35c in the rand, confirms Prakke's view.
The directors of the syndications also acknowledge in their latest letter to shareholders: "...since it will be practically impossible to repay all monies, the only alternative will be the liquidation of some or all the companies". The directors acknowledge the syndications won't be able to repay the investors if the SA Reserve Bank indeed decides within the next week or so that it was an illegal scheme.
The doubt about the actual independence of the so-called new independent board of the Sharemax syndications and about the real motive for the proposed scheme of arrangement calls for action. Perhaps the time has come for the Bank to knock down the house of cards Willie Botha and André Brand built and which Dawie Roodt and the other directors are now trying to keep intact.
Finish the thing, so that especially the elderly – who have already been hurt – can get some certainty about their capital and income and can start re-planning their lives. That's also the view of Chris de Beer, who is acting on behalf of many of the elderly folk.
Investors and the entire financial community now need "closure". Unfortunately, they'll also have to accept that – at best – the investments in Sharemax aren't going to realise more than 20c in the rand.
It will be some consolation to investors to know all those who benefited from this illegal business practice will lose their profit and luxurious lifestyle – through the orderly liquidation of the entire group, hopefully at the insistence of the SA Reserve Bank, which in any case has the final say via its two statutory managers, Neels Alant and Jaco Spies.
The past week or two was a rather tense time for the Sharemax group. The new "independent" board – with former Judge Hartzenberg and Dawie Roodt as its spokesmen – tried hard to convince investors – with whom nobody is actually communicating and who don't have any statutory or other say in what happens – to follow a 311 scheme of arrangement route rather than liquidation.
Of course, the people they have to convince are Alant and Spies, plus Deputy Registrar of Banks Michael Blackbeard, who has become saddled with the Sharemax problem.
On the other hand, there are one or two lawyers in Pretoria who are very keen to place Sharemax and all its syndications under judicial management or liquidation.
Once again, it looks as if the Reserve Bank has the power to put a stop to that, if it likes. In brief, the difference between a 311 scheme and the process of declaring it an illegal business – which would involve compulsory repayment of all monies to the original investors – is as follows. But no matter which way it goes, there's no magic wand to wave that will save the investors, mostly elderly Afrikaans-speakers, from considerable losses. We've produced the following tables on the basis of the limited amount of information available to us to give an indication of what can happen with your investments.
Original and current value
Even the lucky investors have already lost 70c in the rand
The following table – drawn up on the basis of the information currently available on Sharemax's website – shows the existing so-called income portfolio of buildings isn't worth much any more. Many of the buildings are in rural areas and the survival of many – such as the Liberty Mall in Welkom – is already being threatened by new centres. Others, such as Flora in Florida, though in Johannesburg, have been so neglected over recent years that they won't fetch much at auction.
The listed property trusts also avoid small shopping centres in rural areas and, unlike the situation in the past, it's unlikely any of the funds would be interested in Sharemax's basket of shopping centres and office blocks.
Even under the most favourable circumstances, "vulture buyers" would probably be the only ones interested in something like Hazel Court, which is already almost fully vacant. Even vulture buyers have to look at the building's earning potential, as well as the possibility of selling it soon after at a profit.
Vulture buyers won't be very interested in a building already in a state of neglect when they have to buy it with money that has to earn at least 15%/year. And remember: the mere value of bricks and mortar property experts and quasi investment experts so often love to bandy about is often a liability rather than an asset.
Investors in such so-called income syndications have already experienced a loss of more than 50% of the supposedly guaranteed return from before September 2010 to now. Investors can also take a look at our estimated current value of the properties.
Investors are advised to be realistic and not to expect miracles. One of the characteristics of the Sharemax syndications is that the owners liked to push up the original values of the properties – such as Flora, for example, which was even sold once or twice among friends to get the value up to R118m. With the exception of Leeupoort (bought years ago) nobody will receive anything near the full value. Even Benoni Hyper – which basically has to be rebuilt before 2014 – may be worth much less than our estimate of 80c in the rand.
Our advice is to support the liquidation process, let the coup de grâce be given and get rid of management. Only then will investors receive closure.
GROWTH PLANS
Worth nothing
INVESTORS IN THE nine so-called growth projects Sharemax offered must now accept there's no longer any hope of their investments having any value at all. In fact, they probably never had any value from the start. Despite the impression created that these never were direct investments in property but rather loans for property dreams. One of the biggest of those – also the last prospectus issued by Sharemax – was for The Bay, a huge and extremely expensive golf estate on the banks of the Hartbeespoort Dam, near the Pecanwood Estate.
It's the third and last prospectus and really a piece of Africa that should be preserved. It contains the forecast of a huge development in the area and a Lanseria airport that's even projected to be bigger than OR Tambo International in a few years' time.
The fact of the matter is the approximately R75m that had apparently been collected from investors was largely used to pay the interest on Nedbank's first mortgage of R300m on The Bay. Readers and investors will recall such so-called growth projects, including The Bay, offered investors interest of 20%/year – and that's not compound interest. What's more, the interest would only have been paid after five years and was therefore, according to Sharemax, not taxable in the year in which it accrued to the investor. Fortunately, investors need no longer concern themselves about the technical point of when the tax would be payable. There won't be any interest and the capital won't be recovered either: not with a 311 scheme and liquidation, because there aren't any assets to sell.
Around R500m was apparently invested in the nine projects. More details (or should we say more details about the bad news?) about the nine projects are available on Sharemax's website.
Sharemax syndications
The plan with Zambezi and The Villa
IN A RECENT LETTER from the new "independent" board of the Sharemax syndications, the possibility was raised of a transaction addressing the problems with the Zambezi Mall and The Villa in a way that would greatly benefit investors. But please don't become too excited...
Our information is that it's only the start of the plan that Capicol, the developer of both Zambezi and The Villa, was dreaming about late last year. Briefly, the position at the two centres is that Zambezi Mall, which is built on land that still belongs to the developer, Capicol, is still incomplete. The arbitrator, who had to decide about outstanding building costs, has just decided in favour of Capicol. And Sharemax – or at least the syndication that wants to buy Zambezi Mall – will have to cough up another approximately R65m. However, Capicol head Paul Kyriacou believes the amount owing to them, after taking into account the damages, should rather be around R200m.
But cash – real cash – is what's needed to finish the centre. Think in terms of R100m to pay the arrears of R70m or so to the builder, JF Kroon (who still has a builder's lien), plus another R10m or more to complete the roadworks around the centre.
For The Villa, around R1,5bn has already been collected from the public. But its builder, JD Irons, apparently received less than R600m of that and he wants at least another R200m for the work he has already done. He also has a builder's lien over the property, which in any case still belongs to Capicol. To complete The Villa will cost another estimated R1bn.
The message that came to investors via Sharemax – investors who have already put around R2,25bn or a bit more into the two centres – is they have nothing. Their investments are totally worthless.
The Capicol offer – which will apparently be very difficult to carry out in the current climate with all the negativity associated with both centres – is briefly as follows: Let's lump the two together and then try to get a loan, hopefully from overseas, for around R1,5bn. This will be enough to complete the two centres and then they can be run as two luxury malls in Pretoria.
In about three or four years' time (make it five) the listed property companies will be so envious of both centres it will be easy to sell them for R3bn to R5bn. The income from that will be enough to repay the Sharemax investors in full – for their capital, plus even arrears interest.
Of course, there are two small problems with that offer. To date there's been no indication Capicol or anyone else is anywhere near obtaining the R1,5bn loan or investment from overseas. There's probably no one in SA who will touch either project. Property experts are also fairly sceptical about their future value and wonder whether their values will ever raise enough to repay Sharemax's investors.
No matter how far-fetched the Capicol plan may sound, it's probably the best (only?) one there is. Both properties don't belong to the Sharemax investors who put their money into Zambezi Retail Park and The Villa Retail Park. The so-called 311 scheme (or arrangement) the new board has in mind might not apply to the two buildings, the largest in the Sharemax portfolio, as they still belong to Capicol.
If the entire scheme is declared illegal, the liquidators will have a problem delivering a liquidation summons to the correct address.
Our advice to investors in Zambezi and The Villa is simple: go and have a cup of coffee at one of the many quiet shops at Zambezi (The Villa isn't open yet) and then get closure for what you've lost in both projects. It's as permanent and serious as any irrecoverable loss. The process of the Reserve Bank declaring the whole business illegal and a liquidator trying to recover something for you is all you can hope for.
To all the other role players in the entire tragic saga, we'd just like to ask you to stop trying to give some hope every now and then to especially all the elderly investors in both buildings.
INVESTORS
Who will suffer?
IN THEIR LATEST letter to investors – and probably also to the media – the Sharemax syndications' new directors make a plea for a 311 scheme, in which all sins are forgiven, rather than a liquidation process that must follow if the SA Reserve Bank declares the schemes illegal. They say liquidation will only benefit the liquidators.
In the letter, they also warn that the agents, financial advisers – whatever you want to call them – may perhaps have to repay the commissions they earned. That is, the 10% of your money divided up into several levels so nobody received more than 6%. In the worst case, even investors who received interest may be forced to repay it.
Many investors who now realise a large portion, if not all, of their money has been lost will of course be in favour of the process of "blood-letting" – let all those who shared in creating the "miracle" now repay their profits.
From the prospectuses it's easy to see who got how much of every R10 000, which was the smallest amount individuals could invest. The cost calculation is taken from prospectus No 17 for The Villa and shows clearly who received how much. Of every R10 000, 18,96% – or R1 896 – went to Sharemax, who used it as follows:
* Marketing costs (that is, commission): R1 000
* Sharemax's office expenses: R148
* Miscellaneous: R58
Profit to Sharemax: R689
If the blood must flow then it must flow. In the 21 prospectuses issued for The Villa we're aware it looks as if the marketers' portion was more than R150m. Profit to Sharemax – and, of course, its shareholders – was more than R100m. If the Reserve Bank does decide over the next few days it was an illegal scheme all that money must be repaid to investors. This includes commissions to the advisers and the profit to Sharemax, which presumably was paid to its shareholders.
Smaller amounts, such as office expenses, will be difficult to recover. The same goes for the cash interest received by investors, who have since used it for daily expenses.
The coup de grâce
When and where?
OUR INFORMATION is that the two statutory managers – Neels Alant and Jaco Spies – appointed by the Registrar of Banks to manage the business of Sharemax and the syndications, are becoming impatient. Perhaps last week was the cut-off date for the new syndications' board to put forward its proposals for a 311 scheme of arrangement. Deputy Registrar of Banks, Michael Blackbeard, the man at the head of the Sharemax business, is probably also sick and tired of having to explain everything every day.
Elsewhere there are rumours of other legal action against Sharemax and its syndications. And even wilder rumours that the shares of many of the underlying private companies that own the buildings were never transferred to the holding companies in which the public's money was invested. There's apparently also a forum of advisers dead keen to get rid of the current Sharemax board.
Of course, the Registrar holds the trump card. He can declare the whole scheme illegal before its takeover in September last year and, if so, then all the funds collected from investors must be repaid. Not one of the syndications is liquid enough or has enough assets to do so, so liquidation is then inevitable.
Sharemax scheme of arrangement
Time to knock down the house of cards
IN A LONG DISCUSSION with Finweek last week, Dawie Roodt – spokesman for the new independent board of the Sharemax syndications – admitted one of the objectives of the scheme of arrangement is for the relevant companies in the larger group to forgive each others' sins. This means the writing off of debts. Roodt tried to give the assurance that this applied only to the businesses and not people or directors.
However, Chris de Beer, of legal firm De Beer, Janse van Vuuren & De Wet (acting on behalf of a number of investors), is very concerned about proposed talks between the new directors of the schemes and the existing or former directors of Sharemax Investments. In a letter to the "independent directors", he writes: "We note with extreme concern the fact that the board of directors is on the verge of reaching an agreement with shareholders of Sharemax Investments, The shareholders of Sharemax Investments were the parties and persons who created the whole unlawful scheme to the prejudice of investors. We do not know what this agreement will entail, but if the agreement entails the indemnification of the shareholders or directors of Sharemax Investments, of any nature whatsoever, we record that whoever is responsible will be held liable by our clients. We suggest that before such agreements are concluded, the investors and their representatives should be consulted."
Forensic auditor André Prakke is just as concerned about the latest letter from the independent board and he still doubts their legality. After all, you don't become a director of 33 companies willy-nilly. Somebody must appoint you – preferably shareholders at a general meeting. And that certainly didn't happen.
Prakke also points out South Africa's new Companies Act, which comes into operation on 1 April this year, prescribes very strict action against directors who carry on trading while aware of the company's insolvency. Prakke feels that most, if not all, the syndications weren't technically or judicially insolvent right from the beginning.
Our table, which shows the liquidation value of most of the syndications will be somewhere in the region of 20c to 35c in the rand, confirms Prakke's view.
The directors of the syndications also acknowledge in their latest letter to shareholders: "...since it will be practically impossible to repay all monies, the only alternative will be the liquidation of some or all the companies". The directors acknowledge the syndications won't be able to repay the investors if the SA Reserve Bank indeed decides within the next week or so that it was an illegal scheme.
The doubt about the actual independence of the so-called new independent board of the Sharemax syndications and about the real motive for the proposed scheme of arrangement calls for action. Perhaps the time has come for the Bank to knock down the house of cards Willie Botha and André Brand built and which Dawie Roodt and the other directors are now trying to keep intact.
Finish the thing, so that especially the elderly – who have already been hurt – can get some certainty about their capital and income and can start re-planning their lives. That's also the view of Chris de Beer, who is acting on behalf of many of the elderly folk.
