JOHANNESBURG - There is still a backlog of almost 1400 property syndication complaints at the office of the Ombud for Financial Advisory and Intermediary Services (Fais).
This includes many cases against financial advisers who recommended to their clients to invest in schemes promoted and marketed by Sharemax Investments and other collapsed schemes. The Fais Ombud launched a project in 2015 to eradicate the 2000-plus property syndications complaints backlog that built up during the two years it waited for an appeal against two of its determinations to be finalised.
Noluntu Bam, the Fais Ombud, said on Friday that if she had her way she would have loved to eradicate the backlog “tomorrow”, but it was a question of resources.
The appeal that caused the backlog related to a determination by the Fais Ombud against Sharemax Investments and four of its former directors - Gert Goosen, Willem Botha, Dominique Haese and Andre Brand. In 2015 they successfully appealed against two determinations by the Fais Ombud that held them jointly liable to repay two investors who had invested in a scheme promoted and marketed by Sharemax.
The outcome of the appeal meant the office of the Fais Ombud could only issue determinations against the broker or financial adviser and could not place liability at the doors of the directors of the property syndication schemes.
Sharemax collapsed in 2010. The registrar of banks laid criminal charges against Sharemax for alleged contraventions of the Banks Act in March 2012. The Hawks confirmed in October 2012 that they were investigating allegations that Sharemax had committed fraud.
During 2012 in a court-sanctioned scheme of arrangement, the schemes were taken over by Nova Property Group, and Sharemax investors were issued with debentures or shares in Nova Property Group.
Special meeting
Ironically, a special meeting of debenture holders in Nova took place at the CSIR International Convention Centre on Friday at the same time as the Fais Ombud was releasing her latest annual report.
The Nova meeting was open only to debenture holders, but the main issue of discussions is believed to be a proposed listing of Nova on the JSE, which would be dependent on the approval of about 31000 debenture holders during a special meeting. The outcome of the meeting is not known.
The Fais Ombud annual report for the 2016/2017 financial year revealed that new complaints received by the office increased to 10846 from 9891, which is the first year the number of complaints has exceeded 10000.
The office resolved 11025 complaints, which was also the first year it had resolved more than 10000 complaints. The quantum of settled/determined cases increased to R58.3million from R50.2m in the previous year.