THE REGISTRAR of banks has finally lodged a criminal complaint against Sharemax Investments, and the 33 property syndication companies it promoted, for alleged contraventions of the Banks Act.
About 40 000 shareholders invested R4.5 billion through Sharemax’s various property syndications.
The alleged contraventions are being investigated by the Serious Economic Offences Unit at the Directorate for Priority Crime Investigations, the Hawks.
Anyone found guilty of contraventions of the Banks Act is liable to a fine or imprisonment for a maximum period of 10 years or to both a fine and imprisonment.
Michael Blackbeard, the deputy registrar of banks at the Reserve Bank, confirmed this week that the statutory managers appointed to the Sharemax group of companies had, after being requested to do so, informed the Serious Economic Offences Unit of the SAPS that they were satisfied that Sharemax’s funding models contravened the Banks Act.
Blackbeard stressed that this was an administrative finding by the registrar’s office and “not a finding on criminality on the part of the persons involved in the scheme”.
“Criminal investigations and prosecutions are an area of responsibility of the SAPS and National Prosecuting Authority and it is for them to decide how to proceed,” he said.
Dominique Haese, the former financial director of Sharemax Investments and a director of many of the group companies, failed to comment.
The registrar of banks concluded in 2010 that Sharemax’s funding models contravened the Banks Act.
This resulted in the office appointing statutory managers to the Sharemax group of companies and its various property syndications in September 2010 to manage the repayment of funds illegally obtained from the public.
Business Report asked Blackbeard last year why criminal charges for contraventions of the Banks Act had not yet been lodged against Sharemax.
He said the main concern of the office was for the various Sharemax-related companies to resolve their concerns and to give effect to the office’s directive to repay investors’ funds.
He said the office’s mandate was very limited and focused on contraventions of the Banks Act but it would “in due course” instruct the managers to lay a charge with the SAPS.
Blackbeard added that the office was aware the SAPS was already investigating some of the “members” who had been involved in Sharemax schemes and it would provide the necessary assistance to the police and prosecuting authorities.
He previously confirmed that the registrar’s office had been challenged by Sharemax’s lawyers, which culminated in legal arguments relating to the proper interpretation of certain legal prescriptions.
Sharemax ceased making monthly payments to investors at the end of August 2010 when new investor funds dried up.
While under statutory management, the directors of Sharemax proposed a scheme of arrangement and offer of compromise to investors.
These schemes were sanctioned by the North Gauteng High Court in January, leading to the lifting of the statutory management directive.