An embattled black empowerment company, Sekunjalo Investment Group, said it would be meeting its lawyers on Tuesday to discuss the possible recovery of funds following the collapse of health and leisure group, LeisureNet.
In an interview with I-Net Bridge, the Sekunjalo chief executive, Dr Iqbal Surve, said the company would release a statement on Thursday, but was loath to say more for fear of "prejudicing any possible case (they) could have".
Surve said the company was working on ways to recover value for shareholders.
Sekunjalo's share price lost 44 percent on Monday after confirmation that five of the company's non-executive directors had resigned. At 9.30am it was trading at 12 cents a share, marginally up on Monday's record 10 cents low, but far off the highs in May 1999 when it was trading at over 200 cents a share.
The price has been on the decline since then, and was trading at around 100 cents a share a year ago.
Business Day reported on Tuesday that the five non-executive directors - Lieb Loots, Selwin Lewis, Mary-Jane Molifi, Keith Roman and Vines Gihwala - had resigned at a board meeting on Friday in a vote of no confidence in Surve.
In the Business Day report, Surve said the drop in the Sekunjalo share price and uncertainty over how much of the group's R105-million direct investment in LeisureNet could be recovered was an "emotional issue" for the board.
He conceded that there was "some divergence of opinion" over how the LeisureNet stake should have been managed, and said some people "might want to go".
However, Loots said the five confronted Surve on Friday with a demand that he resign as chief executive, which he refused to do. "In that sort of situation, either party has to make way," he said.
Surve denied talk in the market that Sekunjalo was about to follow LeisureNet into liquidation, saying the group was cash positive and "assets exceed liabilities by R75-million".
Sekunjalo has a direct stake of 12 percent in LeisureNet, as well as a 6 percent indirect holding through a special purpose vehicle.
Apart from the LeisureNet interest, which contributed about 40 percent of Sekunjalo's earnings for the six months to the end of February, the group's main involvement is in health care and fishing.
LeisureNet was the biggest contributor to the R9-million in income accruing from associates at the interim stage, which helped boost the bottom line to a R804 000 profit from a prior-year loss of R8,8-million.
LeisureNet went into provisional liquidation on Saturday with an interest-bearing debt of R390-million.
Business Day also said that financial services group Nedcor confirmed that it was owed R130-million by LeisureNet, with R65-million of the debt secured.
The chief operating officer Mike Leeming said: "We believe that the local operation and many of the international operations are viable businesses in their own right.
"In the event of a discontinuation of operations, Nedcor would suffer a loss, but not to an extent that would dampen our earnings expectations. It is known that Nedcor is well provided and this incident goes against the trend in the remainder of our book." - Sapa-INet-Bridge