Former Delta Property Fund executives implicated by the company in financial irregularities – Sandile Nomvete (pictured), Shaneel Maharaj and Otis Tshabalala – on Monday claimed again that they were innocent and said they would support police investigations. Photo: File
Former Delta Property Fund executives implicated by the company in financial irregularities – Sandile Nomvete (pictured), Shaneel Maharaj and Otis Tshabalala – on Monday claimed again that they were innocent and said they would support police investigations. Photo: File

Former Delta execs say they will support police investigation into irregularities

By Edward West Time of article published Apr 28, 2021

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CAPE TOWN - FORMER Delta Property Fund executives implicated by the company in financial irregularities – Sandile Nomvete, Shaneel Maharaj and Otis Tshabalala – on Monday claimed again that they were innocent and said they would support police investigations.

“We are pleased the company has clarified the narrative of an ‘alleged R43.9 million fraud’ that previous communication … had created,” the former directors said.

Last week Delta, upon the re-issue of corrected annual financial statements for the year to end February, said that the executives had “undermined the company’s governance practices, which resulted in non-compliance with internal controls in the company, including unsubstantiated payments, procurement irregularities and other unethical business dealings”.

Delta said that the matters had been reported to the police and other relevant authorities for further investigation and the board was taking legal advice based on the forensic reports and an internal assessment as to any civil claims that may arise.

However, the three former executives claimed that the company’s latest announcement reiterated “unfounded allegations” contained in previous communications.

“We wish to reaffirm, unequivocally, our denial of involvement in any accusations of non-compliance with internal controls, unsubstantiated payments, procurement irregularities and other unethical business dealings,” they said.

They said governance at Delta at the time was managed by the board and its sub-committees together with the executives. External and internal auditors had provided further assurances regarding governance practices.

In addition, the company had confirmed publicly in August last year that their departure was to allow the new leadership the space to drive a revised strategy, they said.

“During the separation discussions, we were appraised regarding the first forensic investigation by Mazars, which was reported by a whistle-blower to the company secretary, and that the report found no proof of the executives benefiting from payments of R2.1m made to a consultant as alleged,” they said.

“In respect of the R41.8m commission payments, they said it was curious the board had concluded these payments were identified as related/connected party transactions and apparent conflict of interest situations relating to the then board members. Yet, the same announcement states ‘management has been unable to obtain the shareholding information and thus establish whether such parties constitute related parties for IFRS disclosure purposes’,” the directors said.

On changes to the property valuations, the directors said the investment committee had approved the appointment of the independent valuers and had approved the final valuations.

“For the year ended 2020 a special meeting between the investment committee, BDO Inc and valuers was convened to ensure uniformity regarding the valuation methodology and assumptions. BDO audited the final approved valuations, and one would expect the omission of property-related expenses and ‘alleged’ off-market assumptions used by the valuers would have been identified and considered.”

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