Nedbank obtained permission from the Pretoria High Court to intervene in an application by a company to have property mogul Roux Shabangu’s business liquidated.
Earlier, Boogertman Smith Building Ltd filed court papers to have Roux Property Fund Pty Ltd – the owner of Middestad building in Pretoria – liquidated.
Nedbank said in a statement to the court that it got wind of this only last week and it wanted to join the fray as a respondent, as it wanted to prevent the liquidation.
According to Nedbank the only people who would benefit from a winding-up order would be the liquidators and auctioneers.
Martin Phillips, manager of loss control at the bank’s Gauteng division, said in a statement before the court that Roux Property Fund (the respondent) was indebted to Nedbank in the amount of R307 480 559.
When Roux Property Fund breached its obligations to Nedbank, the bank obtained judgment against it earlier in terms of which the bank could sell the Middestad building on execution.
Nedbank is set on auctioning off the building tomorrow. This follows the breach of payment obligations about finance granted to the Roux Property Fund for the acquisition of the building.
As security for the loan Roux Property Fund permitted mortgage bonds to be registered over its properties in favour of Nedbank, amounting to R418 750 000, he said.
Phillips argued that the debt to Nedbank had escalated and it now ran into more than R300 million.
Nedbank decided to sell the properties at a sale of execution and had taken all the necessary steps to ensure the sale, he said.
According to Phillips, he received an e-mail from Corporate Liquidators last week, asking him to support the appointment of a liquidator.
Phillips said he was surprised, as this was the first time he became aware of a possible liquidation.
Lawyers acting for Boogertman Smith Building – the applicants in the liquidation application – want Roux Property Fund to be wound up, over money owed to it for the refurbishment of the respondent’s properties.
Phillips said it was Nedbank that had lent Roux Property Fund the money for the refurbishment of the properties.
There was “absolutely no advantage whatsoever” for winding up Roux Property Fund, as the amount outstanding to Nedbank was about R300m, he said.
The value of the property (over which a bond had been registered in favour or Nedbank) was about R110m.
Phillips said the only “winners” in a liquidation scenario would be the auctioneers and liquidators.
Their lawyers pointed out to the applicant that by reason of the extent of the debt and the value of the property, Nedbank would effectively be paying the auctioneers and the liquidators.
It was said that Nedbank’s security would be further eroded by these two unnecessary and huge costs.
Also, in the event of a winding-up, other creditors would probably receive nothing, it was argued.
“There can be no reasonable commercial rationale for the respondent’s winding up as opposed to permitting Nedbank to execute its judgment and sell the property in execution,” Phillips said.
Anna Isaac, the bank’s legal counsel, told the Pretoria News yesterday the sale was proceeding tomorrow.
“This recovery process is in line with Nedbank’s normal procedure to recover overdue debt obligations.
“The finance was granted to Roux Property Fund on the basis that a valid long-term lease agreement was signed by the Department of Public Works,” she said. - Pretoria News