JOHANNESBURG - The financial Advisory and Intermediary Services (Fais) Ombud has dismissed all the property syndication complaints received where the complainants failed to mention the name of the broker in the complaint.
Thobile Masina, the assistant Fais Ombud, said this followed the Financial Services Board (FSB) appeal board judgment in 2015 setting aside the determinations issued to complaints lodged independently by pensioners Gerbrecht Siegrist and Jacqueline Bekker.
These determinations both involved complaints about financial advice given to invest in Zambezi Retail Park, a scheme promoted and marketed by Sharemax.
Apart from the financial adviser in each complaint, the Fais Ombud Noluntu Bam’s determination had held Sharemax Investments; FSP Network; Sharemax and unlisted Securities South Africa director Gert Goosen; and Sharemax directors Willem Botha, Dominique Haese and Andre Brand jointly and severally held liable to repay the complainants.
Masina said that prior to the decisions of the FSB appeals board on the Siegrist and Bekker determinations, the Fais Ombud’s office would re-direct the complaint to the broker in those complaints where the complainant had “in attacking the manner in which the financial services were rendered not named the broker who rendered the financial service” despite the complaint being against the property syndication.
“The decisions of the Appeals Board on the Siegrist and Bekker determinations mean we can no longer do that now. We must dismiss the complaint. The tragedy in this is that complainants who have valid complaints but have not been precise in pointing where the harm came from, can no longer get assistance from the office,” she said.
Suspended
The Fais Ombud suspended the issuing of property syndication determinations for the two years while the appeal against the two determinations was pending, resulting in it having a backlog of more than 2000 property syndication cases once the judgment was handed down.
Masina confirmed there were currently still about 1330 active property syndication scheme complaints, but was unable to confirm how many of these complaints would be determined and how long it would take to get rid of the backlog.
“We cannot confirm how many of the active property syndication files will be determined, if any, since we are still in the process of assessing and investigating these matters. We must still weigh, from the responses received to these complaints, and on completion of the investigations pertinent thereto, if there is merit to the complaints.
“We are, unfortunately, not in a position to confirm how long it will take to clear the backlog since property syndication complaints are not attended to in isolation, but are dealt with in addition to those complaints that the office continues to receive. We are, however, as is evidenced from the reduction in the number of active complaints, committed to attending to rid the office of the backlog,” she said.
Disgruntled investors in Sharemax Investments are, meanwhile, mobilising themselves into action groups in an attempt to recoup the R4.5billion invested by 33000 investors in the various property syndication schemes marketed and promoted by the company.
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 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.
Nova was now proposing to list the property syndications and the conversion of debentures to shares in the proposed JSE-listed company.