PRETORIA – Nova Property Group, the rescue vehicle born out of a scheme of arrangement following the collapse of Sharemax Investments in 2010, appears to have abandoned its proposed plan to list the property syndications and convert debentures to shares in the proposed JSE-listed company.
A notice sent by Nova to debenture holders yesterday that was provided to Business Report informed them of the withdrawal of its proposed arrangement with a view to converting the debentures to shares in terms of section 155 of the Companies Act.
“After due consideration, the company has taken the view that it would not be appropriate to proceed with the proposal at this time. In the circumstances, the notice and the proposal (as contained in the notice) is hereby withdrawn,” it said.
The notice added that the debenture holders meeting adjourned to September 26 would therefore not proceed.
The conversion of the debentures to shares would have nullified the claims of debenture holders against Nova.
Many debenture holders were vehemently opposed to Nova’s proposal, with disgruntled investors who had invested in Sharemax Investments mobilising themselves into action groups in an attempt to recoup the R4.5 billion invested by 33 000 investors in the various property syndication schemes marketed and promoted by the company.
Sharemax Investments collapsed in 2010 after the finding by a registrar of banks investigation that funding model had contravened the Banks Act became public knowledge. This led to new investments drying up, and Sharemax was unable to make monthly payments to investors.
In terms of a subsequent scheme of arrangement in terms of section 311 of the Companies Act and offer of compromise that led to the creation of the Nova Property Group, investors were offered either shares or debentures while Nova now owns all the properties.
Charl Kriek, representing a trust that had investments in Sharemax, told a meeting of debenture holders in March that a debenture had a maturity date, and the capital had to be returned to the debenture holder on that date, which Nova had failed to do.
It was unclear what the directors of Nova were planning to do.
Nova chief executive Dominique Haese had not responded to a list of questions emailed to the company’s offices by the time of going to print.
The registrar of banks laid criminal charges against Sharemax for alleged contraventions of the Banks Act in March 2012.
The Hawks confirmed at the time it was investigating Sharemax, but to date no charges have been brought against anyone associated with the failed investment scheme.
- BUSINESS REPORT