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Johannesburg - Troubled investment business Edwafin has applied to be placed under judicial management in an attempt to get itself back on its feet.
According to communication from the company to debenture holders, Edwafin's debts total R228.5m while assets amount to R16.5m.
"I can't see how they are going to get out of this position," said debenture holder Mario Koppers in a discussion with Fin24.com.
Edwafin has asked to be placed in judicial management in an attempt to protect itself from creditors and debenture holders who are seeking legal action against the management, including CEO Patrick Stapleton.
In a letter sent to debenture holders, Verona Cowan, the company secretary and legal manager, told investors: "In short, what this does is it gives us a chance to properly apply our time and efforts to trading ourselves out of this position, thereby ensuring that your investment remains safe from attacks such as liquidation applications and the like."
The judicial management hearing is to be held on May 18.
Edwafin, an unlisted investment company, and its financial services business Edwabond were brought to the attention of financial regulators after debenture holders failed to receive interest payments from October 2008.
Many investors have approached Fin24.com to say that they have been unable to extract funds from the business. Edwabond recently had its license suspended by the Financial Services Board (FSB).
The FSB has confirmed that is in the process of investigating Edwabond, the organisation responsible for selling debentures in Edwafin.
The investigation into Edwabond commenced in October 2008 following pressure pressure from investors, financial advisors and the media.
Koppers has actively pursued Edwafin management after he was unable to withdraw his funds. Earlier this year he launched a blog aimed at highlighting his investment experience. In his most recent blog posting, he wrote: "Please, we are all on the same planet, your truths don't work, and your deception is utterly transparent - why not try to tell us the real truth for a change? It is difficult, I know, one develops a rut and a unpleasant habit; an unsatisfiable thirst for being deceptive. Yet, as someone said: the truth provides liberty and space for sensible action."
- Fin24.com