Embattled Edwafin goes offline

Johannesburg - Debenture holders in embattled investment firm Edwafin have alerted Fin24.com that the company's website has been taken offline as investors take the battle to cyberspace.

Marius Koppers has launched a blog and an online forum on his Edwafin investment.

In his blog, Koppers writes: "Recent events have convinced me that there is total lack of sincerity on the side of Edwafin (and most probably [CEO Patrick] Stapleton himself), as he had no problem in subjugating a retired lady to his whims and contrary to any prior written agreements. She is not the only one in this predicament, but is an example for us all."

The blog includes what appears to be detailed correspondence between Koppers and Edwafin CEO Patrick Stapleton.

Other investors and employees have begun contributing to the blog, with an employee alleging that staff had not been paid salaries or severance pay and that Edwafin has in fact received funds from the sale of its Rainbow Paints business which was being used by the company as a reason for it not meeting its obligations.

The business had raised capital by issuing debentures which would see investors' capital protected and allow them to earn fixed interest. Investors became concerned when interest due to them was not paid in October 2008.

Vic de Klerk of Fin24.com had previously warned against Edwafin as an investment after seeing a number of prospectuses and sales people pushing the debentures instrument.

Edwafin originally comprised operating businesses including Rainbow Paints and Dynamic Motor Company (DMC), which Edwafin says will manufacture low-cost vehicles for the South African market. The vehicle has yet to come into production.

An investor who was at a recent meeting with Edwafin and other debenture holders in Pietermaritzburg told Fin24.com that the company was continuing to bank on its DMC investment.

"They've told us straight out that they do not have money to pay any of the investors because the money is in investments and went into the production of the new vehicle, the 'Damara'."

The debenture holder added that a lawyer who was present at the meeting suggested that debenture holders vote for the company to be placed in voluntary liquidation, but Edwafin directors were "not interested".

On Monday, Fin24.com contacted Edwafin for further information. Neither Stapleton nor group risk manager Brian Poliah - described by the group as its "most important individual" on its website - were available for comment.

- Fin24.com