Accountant survives Pickvest CEO`s complaint
Rikus Myburgh fails to get auditing body to act against nemesis Andre Prakke.
Rikus Myburgh, CEO of controversial syndication promoter Pickvest (formerly PIC Syndications), has failed in his complaint against nemesis Andre Prakke.
Last year Moneyweb reported that Myburgh had laid a complaint against Prakke with the South African Institute of Chartered Accountants (Saica). See Pickvest CEO lays complaint against Andre Prakke.
Both Myburgh and Prakke are chartered accountants.
Myburgh’s complaint, which can be downloaded here, accused Prakke of causing the loss of income to Pickvest of “hundreds of millions of rands”. Presumably this income would have been earned as profits on the sale of syndicated properties to investors.
Myburgh’s complaint was referred to the regulatory body for auditors, Irba, which takes precedence when a complaint is made against someone who is both a registered accountant and auditor, as Prakke is.
Irba director Jane O’Connor wrote to Myburgh to inform him that Irba’s investigating committee did not believe that his complaint had provided evidence to charge Prakke with bringing the profession into disrepute. O’Connor’s letter can be downloaded here.
O’Connor noted, somewhat ominously for Pickvest auditors, that, on further consideration, the committee had “decided to investigate the auditors in this matter". It is unclear whether O’Connor was referring to Pickvest’s auditors, Calculus, or those of its syndication companies, Van Sitterts.
Auditors of property syndication companies have taken some flak recently for signing off on dubious valuations. See Property Syndicator’s auditor clobbered and Sharemax: Auditor backtracks on opinion.
Myburgh declined to comment on Irba’s finding. He would only say: “I prefer to wait for the outcome of the other case against Prakke currently being investigated by Irba.”
Prakke says he is not aware of any other complaint pending against him.
Prakke tells Moneyweb that he is considering suing Myburgh for defamation. He is also considering laying counter complaints against both Myburgh and Pickvest attorney Eugene Kruger.
“Money has been stolen from investors, finish and klaar,” says Prakke.
What is clear is that about R883m of Pickvest investors’ funds is unaccounted for. This was confirmed by business rescue practitioner Hans Klopper in his rescue plan.
Prakke has been a vocal critic against many dubious schemes including forex schemes Chinza, Prozet and Leaderguard, and property syndication companies Sharemax and Pickvest.
Prakke’s outspoken opinions have earned him many enemies, especially among the professionals associated with property syndication companies, including directors, auditors, lawyers, and dozens of financial advisers.
About Me
- Gareth Shepperson
- Pretoria, Gauteng Province, South Africa
- Property Lawyer & Conveyancer ... Lover of Life in general!! www.prop-law.co.za In this Blog we have always brought you the latest PROPERTY NEWS but now we will also bring you a Q & A SECTION, where we answer readers questions. Please e-mail your questions to gareth@propertylaw.onmicrosoft.com (The information contained in this Blog does NOT constitute legal advice. If you require legal advice, you are very welcome to contact me.)
09 March 2012
Pickvest: Billionaire gets five years to repay investors - Property | Moneyweb
Pickvest: Billionaire gets five years to repay investors - Property | Moneyweb
18 000-odd investors may have till December 2016 to see if the rescue plan works.
Investors in Pickvest’s eight syndication schemes may have to wait until December 2016 to find out if a rescue plan has been a success. That’s when apparent property billionaire Nic Georgiou and his associates have promised to repay the R4.6bn that was invested in the schemes.
In December last year, Pickvest’s investors approved a business rescue plan proposed by practitioner Hans Klopper. About 11 000 of Pickvest’s total 18 000-odd investors voted. More than 99% of those who voted were in favour of the rescue plan.
Unlike the plan proposed by Sharemax, Pickvest’s rescue does not require court approval.
In terms of the plan, all the properties that were supposed to be owned by investors will be transferred into a public company called Orthotouch. This company has three directors: Nic Georgiou, Panos Kleovoulou and Jannie Nel. It is envisaged that Klopper and corporate lawyer Connie Myburgh will also be appointed directors.
The vast majority of Orthotouch’s shares will be owned by the NAG Trust, registration number IT4469/09.
Orthotouch has undertaken to pay investors a monthly return starting at 6% per year and increasing by 25 basis points each year. At the end of five years, Orthotouch promises to repay investors their full R4.6bn.
The rescue plan is significantly less attractive than the original terms on which investors bought their shares. For example, investors in the biggest syndication, Highveld 21, which accounts for R1.3bn, were promised a return of 12.5% and a capital “guarantee”. Thus, investors may still be inclined to lay complaints against their financial advisers with the Fais Ombud.
Klopper says that Orthotouch has pledged its shares to the eight syndication companies, which will remain the property of investors. “If there is any breach of the agreement, the syndication companies can exercise their pledge and take control of Orthotouch,” Klopper explains.
But Klopper is also the first to admit that the rescue plan has a significant risk attached to it.
Orthotouch will only be able to pay investors their monthly income if it succeeds in its efforts to borrow money. In a letter to an investor, Klopper explains that Orthotouch was unable to make contact with financial institutions during the holiday period, and this caused a delay in the payment of interest.
Klopper says that Orthotouch needs to borrow money in order to pay investors and to improve its buildings, some of which are in dire need of an upgrade.
As a public company, Orthotouch’s financial statements ought to be open to public scrutiny. However, since it is a newly-formed company, it may take as long as 18 months before investors will be able to see audited financial statements.
Such financial statements, when they are produced, should provide insight into Orthotouch’s ability to meet its promises to investors. If the company appears healthy, investors in the eight Pickvest syndication companies may have a better chance of selling their shares and redeeming their investment early. At present there are virtually no buyers for these shares at any price.
In the past, Pickvest used to assist its investors to sell shares in the second-hand market. There is no reason why this market should not resume. Elderly Pickvest investors may be willing to sell their shares for a substantial discount and let younger speculators – with more time and stronger stomachs – wait until December 2016 to see if Orthotouch can deliver on its promises.
Klopper says that a trading platform “May very well be something that could be considered”.
18 000-odd investors may have till December 2016 to see if the rescue plan works.
Investors in Pickvest’s eight syndication schemes may have to wait until December 2016 to find out if a rescue plan has been a success. That’s when apparent property billionaire Nic Georgiou and his associates have promised to repay the R4.6bn that was invested in the schemes.
In December last year, Pickvest’s investors approved a business rescue plan proposed by practitioner Hans Klopper. About 11 000 of Pickvest’s total 18 000-odd investors voted. More than 99% of those who voted were in favour of the rescue plan.
Unlike the plan proposed by Sharemax, Pickvest’s rescue does not require court approval.
In terms of the plan, all the properties that were supposed to be owned by investors will be transferred into a public company called Orthotouch. This company has three directors: Nic Georgiou, Panos Kleovoulou and Jannie Nel. It is envisaged that Klopper and corporate lawyer Connie Myburgh will also be appointed directors.
The vast majority of Orthotouch’s shares will be owned by the NAG Trust, registration number IT4469/09.
Orthotouch has undertaken to pay investors a monthly return starting at 6% per year and increasing by 25 basis points each year. At the end of five years, Orthotouch promises to repay investors their full R4.6bn.
The rescue plan is significantly less attractive than the original terms on which investors bought their shares. For example, investors in the biggest syndication, Highveld 21, which accounts for R1.3bn, were promised a return of 12.5% and a capital “guarantee”. Thus, investors may still be inclined to lay complaints against their financial advisers with the Fais Ombud.
Klopper says that Orthotouch has pledged its shares to the eight syndication companies, which will remain the property of investors. “If there is any breach of the agreement, the syndication companies can exercise their pledge and take control of Orthotouch,” Klopper explains.
But Klopper is also the first to admit that the rescue plan has a significant risk attached to it.
Orthotouch will only be able to pay investors their monthly income if it succeeds in its efforts to borrow money. In a letter to an investor, Klopper explains that Orthotouch was unable to make contact with financial institutions during the holiday period, and this caused a delay in the payment of interest.
Klopper says that Orthotouch needs to borrow money in order to pay investors and to improve its buildings, some of which are in dire need of an upgrade.
As a public company, Orthotouch’s financial statements ought to be open to public scrutiny. However, since it is a newly-formed company, it may take as long as 18 months before investors will be able to see audited financial statements.
Such financial statements, when they are produced, should provide insight into Orthotouch’s ability to meet its promises to investors. If the company appears healthy, investors in the eight Pickvest syndication companies may have a better chance of selling their shares and redeeming their investment early. At present there are virtually no buyers for these shares at any price.
In the past, Pickvest used to assist its investors to sell shares in the second-hand market. There is no reason why this market should not resume. Elderly Pickvest investors may be willing to sell their shares for a substantial discount and let younger speculators – with more time and stronger stomachs – wait until December 2016 to see if Orthotouch can deliver on its promises.
Klopper says that a trading platform “May very well be something that could be considered”.
R4.6bn Pickvest rescue hinges on property billionaire
R4.6bn Pickvest rescue hinges on property billionaire
It was Georgiou who, through his companies, “guaranteed” the generous returns offered by Pickvest syndications. But these guarantees turned out to be worthless when problems started to emerge at the syndication giant earlier this year.
Klopper was appointed to the eight Pickvest schemes in a bid to prevent their liquidation. His appointment provides the syndications with temporary protection from their creditors. This protection gives Klopper time to decide if the syndications can be saved.
In the 62-page rescue document, Klopper effectively tells investors they can choose Georgiou’s offer, or face the liquidation of their investments. Says Klopper: “It is evident that the prospects of the investors recovering their capital without the [Georgiou] offer being accepted are bleak whereas the recovery prospects, should the offer be accepted, are considerably improved.”
Klopper adds that the Georgiou proposal, known as the Orthotouch offer, is the “only realistic opportunity” for investors to recover their capital.
The Orthotouch offer is nothing new. It was proposed to investors in April. The deal would see Orthotouch, a company controlled by Georgiou, buying all of investors’ buildings, and paying for them after five years. They will also earn an income, starting at 6% in year one, increasing to 7% by year five.
However, Klopper has renegotiated the original transaction with clauses and safeguards that he says are to the benefit of Pickvest investors. He says the deal will be underpinned by property worth more than R4bn, and that investors can appoint two directors to the Orthotouch board. Further, Georgiou’s company, Zephan, will transfer buildings worth approximately R1.5bn into Orthotouch for added security. Orthotouch may not lend any money to or invest in third parties while investors remain unpaid.
Klopper says there has been a “groundswell of optimism” from financial advisers, some of whom were steadfastly opposed to the Orthotouch offer in its original form.
Investors are scheduled to meet on December 14, where they can propose amendments to Klopper’s plan and vote to approve it. The plan amounts to the acceptance of the renegotiated Orthotouch offer.
A key feature of the Orthotouch deal is that it is dependent on its acceptance by investors in all eight property syndications. Those in the Highveld 19-22 might feel they have nothing to lose by voting for Georgiou’s proposal. But those invested in the healthiest syndication, Highveld 18, may be less inclined to invest another five years with Georgiou.
Bleak liquidation scenario
Klopper provides investors with estimates of what they can expect to receive in the event of liquidation. It is no surprise that those invested in the older syndications, Highveld 15-18, are expected to fare considerably better than the others. This is because the older syndications actually own property. The others do not.
In April Moneyweb reported that Highveld 18 is the healthiest of these four syndications, and that 16 was in the most trouble. Klopper arrives at the same conclusion in his business rescue plan.
According to Klopper’s estimates, an investor in Highveld 18 might hope to recover 61% of their capital. An investor in Highveld 16 might get 35c. Klopper’s estimates are based on the orderly sale of assets at market value. He estimates that the return could even be 50 percent lower if the assets are sold at auction prices.
For the investors in the newer syndications, Highveld 19-22, the situation is considerably bleaker. These syndications do not own any property. Their only asset is a claim against a company called Bosman & Visser, which has no assets to speak of. For more on this perilous situation, see this article.
Klopper describes the difficulties of pursuing the claim against Bosman & Visser (B&V) in his rescue plan. He says that at least R10m will be needed to sue B&V. In turn, the liquidators of B&V would need money to sue Georgiou’s company Zephan, which has so far failed to deliver investors’ buildings.
Klopper says that Zephan “will undoubtedly defend such action and institute a counterclaim for damages against B&V.”
If the syndications Highveld 19-22 are liquidated, Klopper expects investors to recover no more than R250m out of a total of R3.5bn invested. He also warns that this recovery could take years. Investors in Highveld 21, the largest, are the worst off, with an expected recovery of only 2% of their capital. The best is Highveld 22 with an expected recovery of 17.6%.
Rescue practitioner says the choice is simple: Accept Georgiou’s deal, or liquidate.
Pickvest investors stand to lose an estimated R3.8bn, or 81% of their capital, unless they accept a rescue offer proposed by controversial billionaire Nic Georgiou. This is the message from business rescue practitioner Hans Klopper who filed his plan to save the Pickvest property syndications on Wednesday. The rescue plan can be downloaded here.It was Georgiou who, through his companies, “guaranteed” the generous returns offered by Pickvest syndications. But these guarantees turned out to be worthless when problems started to emerge at the syndication giant earlier this year.
Klopper was appointed to the eight Pickvest schemes in a bid to prevent their liquidation. His appointment provides the syndications with temporary protection from their creditors. This protection gives Klopper time to decide if the syndications can be saved.
In the 62-page rescue document, Klopper effectively tells investors they can choose Georgiou’s offer, or face the liquidation of their investments. Says Klopper: “It is evident that the prospects of the investors recovering their capital without the [Georgiou] offer being accepted are bleak whereas the recovery prospects, should the offer be accepted, are considerably improved.”
Klopper adds that the Georgiou proposal, known as the Orthotouch offer, is the “only realistic opportunity” for investors to recover their capital.
The Orthotouch offer is nothing new. It was proposed to investors in April. The deal would see Orthotouch, a company controlled by Georgiou, buying all of investors’ buildings, and paying for them after five years. They will also earn an income, starting at 6% in year one, increasing to 7% by year five.
However, Klopper has renegotiated the original transaction with clauses and safeguards that he says are to the benefit of Pickvest investors. He says the deal will be underpinned by property worth more than R4bn, and that investors can appoint two directors to the Orthotouch board. Further, Georgiou’s company, Zephan, will transfer buildings worth approximately R1.5bn into Orthotouch for added security. Orthotouch may not lend any money to or invest in third parties while investors remain unpaid.
Klopper says there has been a “groundswell of optimism” from financial advisers, some of whom were steadfastly opposed to the Orthotouch offer in its original form.
Investors are scheduled to meet on December 14, where they can propose amendments to Klopper’s plan and vote to approve it. The plan amounts to the acceptance of the renegotiated Orthotouch offer.
A key feature of the Orthotouch deal is that it is dependent on its acceptance by investors in all eight property syndications. Those in the Highveld 19-22 might feel they have nothing to lose by voting for Georgiou’s proposal. But those invested in the healthiest syndication, Highveld 18, may be less inclined to invest another five years with Georgiou.
Bleak liquidation scenario
Klopper provides investors with estimates of what they can expect to receive in the event of liquidation. It is no surprise that those invested in the older syndications, Highveld 15-18, are expected to fare considerably better than the others. This is because the older syndications actually own property. The others do not.
In April Moneyweb reported that Highveld 18 is the healthiest of these four syndications, and that 16 was in the most trouble. Klopper arrives at the same conclusion in his business rescue plan.
According to Klopper’s estimates, an investor in Highveld 18 might hope to recover 61% of their capital. An investor in Highveld 16 might get 35c. Klopper’s estimates are based on the orderly sale of assets at market value. He estimates that the return could even be 50 percent lower if the assets are sold at auction prices.
For the investors in the newer syndications, Highveld 19-22, the situation is considerably bleaker. These syndications do not own any property. Their only asset is a claim against a company called Bosman & Visser, which has no assets to speak of. For more on this perilous situation, see this article.
Klopper describes the difficulties of pursuing the claim against Bosman & Visser (B&V) in his rescue plan. He says that at least R10m will be needed to sue B&V. In turn, the liquidators of B&V would need money to sue Georgiou’s company Zephan, which has so far failed to deliver investors’ buildings.
Klopper says that Zephan “will undoubtedly defend such action and institute a counterclaim for damages against B&V.”
If the syndications Highveld 19-22 are liquidated, Klopper expects investors to recover no more than R250m out of a total of R3.5bn invested. He also warns that this recovery could take years. Investors in Highveld 21, the largest, are the worst off, with an expected recovery of only 2% of their capital. The best is Highveld 22 with an expected recovery of 17.6%.
08 March 2012
The truth behind my Sharemax divorce - Dawie Roodt
The truth behind my Sharemax divorce - Dawie Roodt
Relations with directors and lawyer Connie Myburgh became " progressively intolerable".
Dear Mr Cobbett
I refer to your article of March 1st on Moneyweb; “Was Dawie Roodt fired from Sharemax?
It is indeed unfortunate that I am in effect forced to react to allegations made against me in this way. I would also appreciate it if you could carry this reply on your website. Based on your article Mr Myburgh and Ms Haese either said or implied that I was dismissed from the boards of companies related to Sharemax. This is incorrect, the correct facts and version of events are provided below. Please note that I have documentary proof of all the facts that I list hereunder.
As you know I was appointed as an independent director to the Sharemax syndicated and other related companies during 2010 primarily to assist in the restructuring of the Sharemax group of companies. Over the months I became uncomfortable with the manner in which certain issues within the group of companies were handled and early July last year I wrote an email to Judge Hartzenberg, the Chairman, wherein I listed some of my concerns. The very next day, before a scheduled board meeting, the other directors asked to see me.
At this meeting I was presented with two documents. On the one document I tendered my resignation and on the other I was “dismissed”. The “dismissal” document was signed by Dominique Haese, Dirk Koekemoer (both executive directors) and Rudi Badenhorst (a non-executive independent director). Judge Hartzenberg did not sign this document. I was given a choice to sign either of these two documents, which I refused to do. I then left the meeting and told the other directors that I will revert back to them once I have decided what to do.
It is important to note that Mr Koekemoer and Ms Haese did not have the power to dismiss me since they were not directors of the holding company, which had the right to appoint directors. Furthermore, the letter of my “dismissal” was signed by only one director which was entitled thereto, Mr Badenhorst, while the other director, Judge Hartzenberg, did not sign the document. And lastly, no due process in terms of the law was followed before I was “dismissed”; informing me of complaints against me, providing me with an opportunity to react thereto etc.
After this episode I decided to tender my resignation which I did a few days later. Clearly the allegations by Mr Myburgh and allegedly by Ms Haese are incorrect.
I can, however, confirm that I was asked about my resignation by a caller during a radio interview with Magnus Heystek, as you indicated in your article. Just as we were leaving the studio Mr Myburgh called me and threatened to tell Magnus that I was “fired”. I then told Mr Myburgh to tell Mr Heystek himself since he was standing next to me and I then handed my phone to Mr Heystek.
I have not been fired from the Sharemax related companies as alleged. I resigned after relations between me and some of the board members and the lawyer, Mr Myburgh, became progressively intolerable.
Best regards
Dawie Roodt
Chief Economist/Director
Response by the Sharemax board.
Dear Mr. Cobbett,
We note that Mr. Roodt insisted that his communication of 6 March 2012 be published, presumably by yourselves. This position taken by Mr Roodt is noted.
The board reiterates its stance that it keeps information that is confidential, for whatever reason, exactly as such, namely confidential, including Mr Roodt’s relationship with the historical Sharemax Group.
We will not be communicating with Mr Roodt through the media, save to likewise request that this response is published, verbatim, in context and without any alterations, be it as to content and composition.
Contrary to your apparent view, we do not believe that this matter has any relevance whatsoever, and we will not entertain any further communication in this regard.
The board reserves all its rights.
Regards
Dominique Haese
Managing & Financial Director
Frontier Asset Management (Pty) Ltd
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The truth behind my Sharemax divorce - Dawie Roodt
Relations with directors and lawyer Connie Myburgh became " progressively intolerable".
Dear Mr Cobbett
I refer to your article of March 1st on Moneyweb; “Was Dawie Roodt fired from Sharemax?
It is indeed unfortunate that I am in effect forced to react to allegations made against me in this way. I would also appreciate it if you could carry this reply on your website. Based on your article Mr Myburgh and Ms Haese either said or implied that I was dismissed from the boards of companies related to Sharemax. This is incorrect, the correct facts and version of events are provided below. Please note that I have documentary proof of all the facts that I list hereunder.
As you know I was appointed as an independent director to the Sharemax syndicated and other related companies during 2010 primarily to assist in the restructuring of the Sharemax group of companies. Over the months I became uncomfortable with the manner in which certain issues within the group of companies were handled and early July last year I wrote an email to Judge Hartzenberg, the Chairman, wherein I listed some of my concerns. The very next day, before a scheduled board meeting, the other directors asked to see me.
At this meeting I was presented with two documents. On the one document I tendered my resignation and on the other I was “dismissed”. The “dismissal” document was signed by Dominique Haese, Dirk Koekemoer (both executive directors) and Rudi Badenhorst (a non-executive independent director). Judge Hartzenberg did not sign this document. I was given a choice to sign either of these two documents, which I refused to do. I then left the meeting and told the other directors that I will revert back to them once I have decided what to do.
It is important to note that Mr Koekemoer and Ms Haese did not have the power to dismiss me since they were not directors of the holding company, which had the right to appoint directors. Furthermore, the letter of my “dismissal” was signed by only one director which was entitled thereto, Mr Badenhorst, while the other director, Judge Hartzenberg, did not sign the document. And lastly, no due process in terms of the law was followed before I was “dismissed”; informing me of complaints against me, providing me with an opportunity to react thereto etc.
After this episode I decided to tender my resignation which I did a few days later. Clearly the allegations by Mr Myburgh and allegedly by Ms Haese are incorrect.
I can, however, confirm that I was asked about my resignation by a caller during a radio interview with Magnus Heystek, as you indicated in your article. Just as we were leaving the studio Mr Myburgh called me and threatened to tell Magnus that I was “fired”. I then told Mr Myburgh to tell Mr Heystek himself since he was standing next to me and I then handed my phone to Mr Heystek.
I have not been fired from the Sharemax related companies as alleged. I resigned after relations between me and some of the board members and the lawyer, Mr Myburgh, became progressively intolerable.
Best regards
Dawie Roodt
Chief Economist/Director
Response by the Sharemax board.
Dear Mr. Cobbett,
We note that Mr. Roodt insisted that his communication of 6 March 2012 be published, presumably by yourselves. This position taken by Mr Roodt is noted.
The board reiterates its stance that it keeps information that is confidential, for whatever reason, exactly as such, namely confidential, including Mr Roodt’s relationship with the historical Sharemax Group.
We will not be communicating with Mr Roodt through the media, save to likewise request that this response is published, verbatim, in context and without any alterations, be it as to content and composition.
Contrary to your apparent view, we do not believe that this matter has any relevance whatsoever, and we will not entertain any further communication in this regard.
The board reserves all its rights.
Regards
Dominique Haese
Managing & Financial Director
Frontier Asset Management (Pty) Ltd
Was Dawie Roodt fired from Sharemax?
Was Dawie Roodt fired from Sharemax?
War of words erupts over Roodt’s departure from Sharemax’s syndication companies.
Was Efficient Group economist Dawie Roodt fired from the boards of Sharemax’s syndication companies?
Moneyweb Radio presenter Magnus Heystek claims that he was informed by corporate lawyer Connie Myburgh that Roodt was “fired”. Myburgh is the architect of the Sharemax rescue plan, which received court sanction early this year.
This is not the first time Moneyweb has heard of Roodt’s alleged sacking. Dominique Haese, CEO of the Sharemax syndication companies, has also made the allegation, albeit indirectly.
During a recent telephone conversation with this journalist, Haese claimed she was aware of the identity of a director who had allegedly leaked documents to Moneyweb. Haese said that the guilty director had been “fired” from the Sharemax syndication boards, and that “steps are being taken against him”.
Haese did not mention Roodt by name, but he is the only director to have left during the relevant time period.
Roodt was appointed to the boards of the Sharemax syndication companies in November 2010. He apparently resigned in July 2011. At the time, Roodt was hesitant to disclose the reasons for his “resignation”. He would only say: “I don’t think I can make a contribution to the [restructuring] process anymore.” He added: “I think it’s also safe to say there were some disagreements.”
Sharemax later confirmed that Roodt had resigned.
But this media release has allegedly been contradicted by Myburgh in a fiery telephone call which took place last Friday evening, immediately after the broadcast of Moneyweb’s Afrikaans radio programme, RSG Geldsake met Moneyweb.
Presenter Magnus Heystek’s version of events follows:
“Dawie Roodt was on our radio show on Friday to speak about the Budget. During the show, a listener called in and asked why Dawie had resigned from the Sharemax boards. Dawie was diplomatic in his answer.”
Roodt answered in Afrikaans: “I was not happy with how things were done and consequently I decided to end my relationship with Sharemax.”
Readers who wish to listen to the relevant portion of the radio show can download it here.
Heystek continues: “As soon as we walked out of the studio, Dawie’s phone rang. He showed me the screen and I could see it was Connie Myburgh calling.
“Dawie answered his phone, and I could hear that he was having a heated conversation with Myburgh.”
At some point in the conversation Roodt handed the phone to Heystek so he could speak to Myburgh.
Says Heystek: “Myburgh informed me that Roodt had been fired from the boards of the Sharemax syndication companies. He promised to send me a letter that would prove this.”
On the following Tuesday, Heystek called Myburgh to ask whether he would send the promised letter.
“What followed was a verbal tirade,” says Heystek. “Myburgh made a number of allegations against me, Moneyweb, and [forensic accountant and Sharemax critic] André Prakke. He called Dawie a liar and denied saying he had been fired.”
Heystek says he knows Connie Myburgh because they studied at the same university. “Myburgh was also in my office four years ago to discuss a property in Mauritius.”
Roodt declined to comment on allegations that he was fired. Neither Myburgh nor his attorney, Coenie Willemse, responded to a request to comment
War of words erupts over Roodt’s departure from Sharemax’s syndication companies.
Was Efficient Group economist Dawie Roodt fired from the boards of Sharemax’s syndication companies?
Moneyweb Radio presenter Magnus Heystek claims that he was informed by corporate lawyer Connie Myburgh that Roodt was “fired”. Myburgh is the architect of the Sharemax rescue plan, which received court sanction early this year.
This is not the first time Moneyweb has heard of Roodt’s alleged sacking. Dominique Haese, CEO of the Sharemax syndication companies, has also made the allegation, albeit indirectly.
During a recent telephone conversation with this journalist, Haese claimed she was aware of the identity of a director who had allegedly leaked documents to Moneyweb. Haese said that the guilty director had been “fired” from the Sharemax syndication boards, and that “steps are being taken against him”.
Haese did not mention Roodt by name, but he is the only director to have left during the relevant time period.
Roodt was appointed to the boards of the Sharemax syndication companies in November 2010. He apparently resigned in July 2011. At the time, Roodt was hesitant to disclose the reasons for his “resignation”. He would only say: “I don’t think I can make a contribution to the [restructuring] process anymore.” He added: “I think it’s also safe to say there were some disagreements.”
Sharemax later confirmed that Roodt had resigned.
But this media release has allegedly been contradicted by Myburgh in a fiery telephone call which took place last Friday evening, immediately after the broadcast of Moneyweb’s Afrikaans radio programme, RSG Geldsake met Moneyweb.
Presenter Magnus Heystek’s version of events follows:
“Dawie Roodt was on our radio show on Friday to speak about the Budget. During the show, a listener called in and asked why Dawie had resigned from the Sharemax boards. Dawie was diplomatic in his answer.”
Roodt answered in Afrikaans: “I was not happy with how things were done and consequently I decided to end my relationship with Sharemax.”
Readers who wish to listen to the relevant portion of the radio show can download it here.
Heystek continues: “As soon as we walked out of the studio, Dawie’s phone rang. He showed me the screen and I could see it was Connie Myburgh calling.
“Dawie answered his phone, and I could hear that he was having a heated conversation with Myburgh.”
At some point in the conversation Roodt handed the phone to Heystek so he could speak to Myburgh.
Says Heystek: “Myburgh informed me that Roodt had been fired from the boards of the Sharemax syndication companies. He promised to send me a letter that would prove this.”
On the following Tuesday, Heystek called Myburgh to ask whether he would send the promised letter.
“What followed was a verbal tirade,” says Heystek. “Myburgh made a number of allegations against me, Moneyweb, and [forensic accountant and Sharemax critic] André Prakke. He called Dawie a liar and denied saying he had been fired.”
Heystek says he knows Connie Myburgh because they studied at the same university. “Myburgh was also in my office four years ago to discuss a property in Mauritius.”
Roodt declined to comment on allegations that he was fired. Neither Myburgh nor his attorney, Coenie Willemse, responded to a request to comment
Manaka defends controversial government leasing deal
Manaka defends controversial government leasing deal
Manaka Property Investments leases approximately 25 400m² of office space to the DoHA in the Hallmark building in Pretoria’s CBD.
The lease was signed by the Department of Public Works (DPW) which, under its former minister, Gwen Mahlangu Nkabinde, was responsible for authorising the police headquarters leases which resulted in the suspension of police chief Bheki Cele.
Reports released in the media on Monday suggested that the lease agreement was costing the DoHA more than one-and-a-half times what it previously paid for office space.
According to a written reply to a parliamentary question, Home Affairs Minister Nkosazana Dlamini-Zuma, said the offices are costing her department around R109/m² per month, reports said.
This would translate into a yearly rental of R33.2m for 25 338m² of office space, as compared to a total of R25.7m for 30 859 m², or R69.40/ m², the department had been paying previously.
However, Joe Mathebula, Manaka Property Investments CEO, claims that Dlamini-Zuma’s costing has not been adjusted to exclude 400 parking bays being rented to the department at R450 per month.
The actual lease agreement, claims Mathebula, is at a rate of R87.76/ m² per month.
“The lease is for eight years as per our 75% BEE status according to Public Works,” he said.
According to the Rode Report, which evaluates average rental prices for properties, an A Grade property in the Pretoria CBD would typically cost around R80/ m² a month, excluding VAT.
A Grade property would be defined as being “generally not older than ten years, unless renovated, in a prime location with high quality finishes”.
Manaka claims to have invested around R70m into refurbishing the Hallmark building prior to leasing it to the DoHA.
Mathebula also contends that the increase in the price of the office space is natural, owing to the fact that the department has relocated its offices from an outlying industrial area to a prime office location in the Pretoria CBD.
“People want to be silly” when comparing rental prices, said Mathebula. “The department was leasing in Silverton which is an industrial space; it’s not even an office space,” he said.
Four of Manaka’s key management staff, including its chairman, CEO, director and a major investor, served as state officials in Limpopo leading to allegations that it had leveraged political connections to secure the lease agreement.
The current Limpopo Premier, Cassel Mathale, is registered by the Companies and Intellectual Property Commission (CIPC) as a Manaka director.
Mufamadi and Mathale are currently facing a probe by Parliament’s ethics oversight committee questioning how a company connected to public representatives had come to be awarded the contracts, apparently in breach of treasury regulations.
However, says Jannie Moolman, MD of the Moolman Group which holds a 25% stake in Manaka, and former chairman of the Limpopo tender board, Mufamadi had not held positions in political office at the time when Manaka was founded in 2007.
And, according to Manaka CEO – who is the former CEO of parastatal Trade and Investment Limpopo – Mathale had been asked to resign from Manaka but, owing to a difficulty with processes at CIPC, had not been able to do so.
“When Mufamadi and I decided to form Manaka he was out of political office,” said Moolman.
“When we formed Manaka he was no longer in politics, he was an ANC office bearer… A few years after, we sat with a situation where Mufamadi became a national MP”.
Moolman was unwilling to comment on the parliamentary probe saying simply that “I hope it’s not the case” that Mufamadi has breached and tender regulations in securing the lease for the Hallmark building.
Political connections were not leveraged to secure inflated prices – CEO Joe Mathebula.
The company involved in a controversial leasing agreement with the Department of Home Affairs (DoHA) has defended itself against allegations that it has leveraged political connections to secure inflated prices, saying that rentals are market related.Manaka Property Investments leases approximately 25 400m² of office space to the DoHA in the Hallmark building in Pretoria’s CBD.
The lease was signed by the Department of Public Works (DPW) which, under its former minister, Gwen Mahlangu Nkabinde, was responsible for authorising the police headquarters leases which resulted in the suspension of police chief Bheki Cele.
Reports released in the media on Monday suggested that the lease agreement was costing the DoHA more than one-and-a-half times what it previously paid for office space.
According to a written reply to a parliamentary question, Home Affairs Minister Nkosazana Dlamini-Zuma, said the offices are costing her department around R109/m² per month, reports said.
This would translate into a yearly rental of R33.2m for 25 338m² of office space, as compared to a total of R25.7m for 30 859 m², or R69.40/ m², the department had been paying previously.
However, Joe Mathebula, Manaka Property Investments CEO, claims that Dlamini-Zuma’s costing has not been adjusted to exclude 400 parking bays being rented to the department at R450 per month.
The actual lease agreement, claims Mathebula, is at a rate of R87.76/ m² per month.
“The lease is for eight years as per our 75% BEE status according to Public Works,” he said.
According to the Rode Report, which evaluates average rental prices for properties, an A Grade property in the Pretoria CBD would typically cost around R80/ m² a month, excluding VAT.
A Grade property would be defined as being “generally not older than ten years, unless renovated, in a prime location with high quality finishes”.
Manaka claims to have invested around R70m into refurbishing the Hallmark building prior to leasing it to the DoHA.
Mathebula also contends that the increase in the price of the office space is natural, owing to the fact that the department has relocated its offices from an outlying industrial area to a prime office location in the Pretoria CBD.
“People want to be silly” when comparing rental prices, said Mathebula. “The department was leasing in Silverton which is an industrial space; it’s not even an office space,” he said.
Four of Manaka’s key management staff, including its chairman, CEO, director and a major investor, served as state officials in Limpopo leading to allegations that it had leveraged political connections to secure the lease agreement.
Manaka’s chairman and 50% shareholder, Thaba Mufamadi, is a serving ANC MP, chairman of Parliament's standing committee on finance and the Former Minister of Finance and Economic Development of Limpopo.
The current Limpopo Premier, Cassel Mathale, is registered by the Companies and Intellectual Property Commission (CIPC) as a Manaka director.
Mufamadi and Mathale are currently facing a probe by Parliament’s ethics oversight committee questioning how a company connected to public representatives had come to be awarded the contracts, apparently in breach of treasury regulations.
However, says Jannie Moolman, MD of the Moolman Group which holds a 25% stake in Manaka, and former chairman of the Limpopo tender board, Mufamadi had not held positions in political office at the time when Manaka was founded in 2007.
And, according to Manaka CEO – who is the former CEO of parastatal Trade and Investment Limpopo – Mathale had been asked to resign from Manaka but, owing to a difficulty with processes at CIPC, had not been able to do so.
“When Mufamadi and I decided to form Manaka he was out of political office,” said Moolman.
“When we formed Manaka he was no longer in politics, he was an ANC office bearer… A few years after, we sat with a situation where Mufamadi became a national MP”.
Moolman was unwilling to comment on the parliamentary probe saying simply that “I hope it’s not the case” that Mufamadi has breached and tender regulations in securing the lease for the Hallmark building.
07 March 2012
New properties set to change face of Soweto
New properties set to change face of Soweto
Abulani Heights is set to change the face of the Soweto housing landscape. The groundbreaking new development will have a mall, hospital, theatre, municipal offices, fire station and filling stations.
A view of the complex.
The three-storey blocks of flats are meant for people who earn too much to qualify for a subsidy and too little to buy a house.
Project funders International Housing Solutions (IHS) released findings of research conducted by property economist and UCT associate professor Francois Viruly that showed a high level of satisfaction among occupants of the new housing product.
Soula Proxenos, managing partner of IHS, said affordable housing was aimed at closing a huge gap in housing that affected "people who can afford to pay but have nothing suitable for them in the market".
She said they were not only building affordable homes, but were taking into consideration things such as locations close to residents' workplaces, amenities and access to transport routes.
"The Jabulani project is ideally located near a mall and a theatre as well as other facilities. We also have apartments in Protea Glen that are also close to public transport routes, schools and shops," she said.
"Our projects are also for people who love living in Soweto, but would still want a feeling similar to those of upmarket apartments in the city close to amenities and also remain close to their families in the township. "We got the professor (Viruly) to conduct research recently to test if we were indeed meeting every aspect of what will satisfy residents, developers as well as our investors."
Viruly said his research also looked at how many jobs were created through affordable housing projects.
The IHS said its products were designed to "ensure healthy, integrated communities rather than just to provide dwellings".
The complex was designed in a modern style with bold stairwells in red.
Viruly's research showed that "over 70 percent of respondents said by moving into the these houses they become healthier".
He said: "Living in a decent and well-located house means people are healthier.
"We were testing the issue of 'housing beyond just a shelter' and found out that access to amenities like schools is critical."
Jabulani Heights is expected to yield 4 200 units of a combination of rental and ownership stock selling from R242 000 for a single-bedroomed bachelor flat to R526 000 for 86m threebedroomed units.
Down the road from Jabulani Mall, 500 new units of neat three-storey blocks of RDP and subsidised rental units are being built. Construction of a 300-bed Jabulani-Zola Hospital in front of the R320 million Jabulani Mall is almost complete. On the other side of the mall, the R150m colourful Soweto Theatre is nearing completion. All these are expected to form a new CBD for Soweto in Jabulani.
The Star
Abulani Heights is set to change the face of the Soweto housing landscape. The groundbreaking new development will have a mall, hospital, theatre, municipal offices, fire station and filling stations.
A view of the complex.
The three-storey blocks of flats are meant for people who earn too much to qualify for a subsidy and too little to buy a house.
Project funders International Housing Solutions (IHS) released findings of research conducted by property economist and UCT associate professor Francois Viruly that showed a high level of satisfaction among occupants of the new housing product.
Soula Proxenos, managing partner of IHS, said affordable housing was aimed at closing a huge gap in housing that affected "people who can afford to pay but have nothing suitable for them in the market".
She said they were not only building affordable homes, but were taking into consideration things such as locations close to residents' workplaces, amenities and access to transport routes.
"The Jabulani project is ideally located near a mall and a theatre as well as other facilities. We also have apartments in Protea Glen that are also close to public transport routes, schools and shops," she said.
"Our projects are also for people who love living in Soweto, but would still want a feeling similar to those of upmarket apartments in the city close to amenities and also remain close to their families in the township. "We got the professor (Viruly) to conduct research recently to test if we were indeed meeting every aspect of what will satisfy residents, developers as well as our investors."
Viruly said his research also looked at how many jobs were created through affordable housing projects.
The IHS said its products were designed to "ensure healthy, integrated communities rather than just to provide dwellings".
The complex was designed in a modern style with bold stairwells in red.
Viruly's research showed that "over 70 percent of respondents said by moving into the these houses they become healthier".
He said: "Living in a decent and well-located house means people are healthier.
"We were testing the issue of 'housing beyond just a shelter' and found out that access to amenities like schools is critical."
Jabulani Heights is expected to yield 4 200 units of a combination of rental and ownership stock selling from R242 000 for a single-bedroomed bachelor flat to R526 000 for 86m threebedroomed units.
Down the road from Jabulani Mall, 500 new units of neat three-storey blocks of RDP and subsidised rental units are being built. Construction of a 300-bed Jabulani-Zola Hospital in front of the R320 million Jabulani Mall is almost complete. On the other side of the mall, the R150m colourful Soweto Theatre is nearing completion. All these are expected to form a new CBD for Soweto in Jabulani.
The Star
06 March 2012
SA mayors urged to buy up city land
SA mayors urged to buy up city land
The government must intervene radically in the ownership of land around South African cities to ensure optimum economic growth, the country's top mayors were told during a course at the weekend.
Enrique Peñalosa, the former mayor of the Colombian capital, Bogotá, said the quality of urban life was the most important determinant of modern economic growth and that the leaders of South African cities should decide what kind of cities they wanted.
While land and then capital were initially regarded as the most important factors in economic growth, now it was people, Peñalosa told the mayors and their management teams. "How do you ensure that the best South Africans stay in South Africa and don't go to London or New York? By making it attractive."
Peñalosa and his successor are credited by many with turning one of the world's most violent and corrupt capitals into a peaceful and vibrant city in less than 10 years.
Peñalosa spoke at a unique course called "Leadership in local government: building globally competitive cities".
Executive mayors in attendance during the first two days of the course at the weekend included Zukiswa Ncitha of Buffalo City, Patricia de Lille of Cape Town, Mondli Gungubele of Ekurhuleni, Parks Tau of Johannesburg; Zanoxolo Wayile of Nelson Mandela Bay and Kgosientso Ramokgopa of Tshwane.
The cities' management teams are attending the full eight-day course, run by UCT and the World Bank Institute and sponsored by the Treasury and the SA Local Government Association.
The theme of the first day of the programme, which Peñalosa addressed, was "Rapid reform is necessary". That necessity, as he sees it, is based on the fact that South Africa is currently 62 percent urbanised and is likely to experience a rapid increase in urban population in the coming years.
"In South America, where there is 90 percent urbanisation, the population of the cities increased by 300 percent when the urbanisation rate increased from 62 percent to 85 percent... what's happening in South Africa now, happened in South America years ago."
A critical factor determining the success of the urbanisation process would be the availability of land around the growing cities. "If you don't deal with this issue, you won't be able to solve the housing problem."
The lack of available land was resulting in informal developments being established in "very bad locations".
Peñalosa said that the market economy, in the case of land around growing cities, did not work because the supply of land could not be increased to match the increased demand. "This means that rich land owners become richer... just because cities are growing."
He said that the government had to buy out these landowners either voluntarily or compulsorily and create a land bank.
The programme is the second to be convened by UCT's Graduate School of Development Policy and Practice, which aims to promote strategic leadership in government and places a strong emphasis on accountability in governance.
The seminar will see the introduction of the Treasury's Cities Support Programme, which aims to support and strengthen service delivery at municipal level.
Business Report
The government must intervene radically in the ownership of land around South African cities to ensure optimum economic growth, the country's top mayors were told during a course at the weekend.
Enrique Peñalosa, the former mayor of the Colombian capital, Bogotá, said the quality of urban life was the most important determinant of modern economic growth and that the leaders of South African cities should decide what kind of cities they wanted.
While land and then capital were initially regarded as the most important factors in economic growth, now it was people, Peñalosa told the mayors and their management teams. "How do you ensure that the best South Africans stay in South Africa and don't go to London or New York? By making it attractive."
Peñalosa and his successor are credited by many with turning one of the world's most violent and corrupt capitals into a peaceful and vibrant city in less than 10 years.
Peñalosa spoke at a unique course called "Leadership in local government: building globally competitive cities".
Executive mayors in attendance during the first two days of the course at the weekend included Zukiswa Ncitha of Buffalo City, Patricia de Lille of Cape Town, Mondli Gungubele of Ekurhuleni, Parks Tau of Johannesburg; Zanoxolo Wayile of Nelson Mandela Bay and Kgosientso Ramokgopa of Tshwane.
The cities' management teams are attending the full eight-day course, run by UCT and the World Bank Institute and sponsored by the Treasury and the SA Local Government Association.
The theme of the first day of the programme, which Peñalosa addressed, was "Rapid reform is necessary". That necessity, as he sees it, is based on the fact that South Africa is currently 62 percent urbanised and is likely to experience a rapid increase in urban population in the coming years.
"In South America, where there is 90 percent urbanisation, the population of the cities increased by 300 percent when the urbanisation rate increased from 62 percent to 85 percent... what's happening in South Africa now, happened in South America years ago."
A critical factor determining the success of the urbanisation process would be the availability of land around the growing cities. "If you don't deal with this issue, you won't be able to solve the housing problem."
The lack of available land was resulting in informal developments being established in "very bad locations".
Peñalosa said that the market economy, in the case of land around growing cities, did not work because the supply of land could not be increased to match the increased demand. "This means that rich land owners become richer... just because cities are growing."
He said that the government had to buy out these landowners either voluntarily or compulsorily and create a land bank.
The programme is the second to be convened by UCT's Graduate School of Development Policy and Practice, which aims to promote strategic leadership in government and places a strong emphasis on accountability in governance.
The seminar will see the introduction of the Treasury's Cities Support Programme, which aims to support and strengthen service delivery at municipal level.
Business Report
Residential rental market set to remain weak - FNB
Residential rental market set to remain weak - FNB
The residential buy-to-let and rental markets remain weak and may remain so for some time because of the crowding-out effect of the myriad other consumer costs, according to FNB.
However, John Loos, a household and property sector analyst at FNB, said a weak residential market might have been key in preventing interest rates rising last year because of the large weighting of rentals in the consumer price index (CPI).
"Should the rental market have strengthened more significantly in 2011 at a time when other components of the CPI were rising sharply, overall consumer price inflation may have risen far higher above the 6 percent upper target limit and that may just have been the catalyst for the Reserve Bank to start hiking interest rates."
Loos added that interest rate hikes appeared to have been significantly delayed and residential buying demand had continued to grow gradually.
He expected the rental market to pick up from the start of expected interest rate hikes around 2014. Increases in rates would be a catalyst for a stronger rental market as many aspirant first-time buyers would delay buying a home and rent for longer.
Loos said weak buy-to-let buying did lay the foundation for the ultimate recovery of the rental market by constraining supply, which would gradually set the basis for a future shortage leading to stronger rental inflation.
However, Loos said it appeared that significant strengthening in the rental market might be some way off, with credit dependent first-time home buyers flocking into the home buying market in greater numbers as opposed to renting.
Loos said the percentage of residential buyers who were purchasing properties to let was believed to have remained fairly weak based on the results of FNB's fourth-quarter estate agent survey.
He said agents surveyed estimated about 8 percent of sales were to buy-to-let buyers, virtually unchanged from the previous three quarters and still a far cry from the almost 25 percent recorded in 2004.
Loos attributed the weakness in the buy-to-let market to the current significant household sector pressure.
The sources of this pressure had been a mediocre economic performance despite some recent improvement, along with sharp increases in the cost of high-frequency consumer purchases.
"Although price inflation for petrol and food are starting to turn for the better, their inflation rates remain very high and these highly essential items do exert a significant degree of financial pressure.
"But more significant in limiting the appeal of owning a second home is arguably the ongoing increases in municipal rates while utilities tariffs, most notably in the area of electricity, are skyrocketing."
Loos said while utilities tariffs were generally passed on to the tenant in a rental property, the general levels of financial pressure in recent years must often have meant the negative impact on tenants of these tariffs and other CPI inflation items limited the "pricing power" of landlords in hiking rentals.
Business Report
The residential buy-to-let and rental markets remain weak and may remain so for some time because of the crowding-out effect of the myriad other consumer costs, according to FNB.
However, John Loos, a household and property sector analyst at FNB, said a weak residential market might have been key in preventing interest rates rising last year because of the large weighting of rentals in the consumer price index (CPI).
"Should the rental market have strengthened more significantly in 2011 at a time when other components of the CPI were rising sharply, overall consumer price inflation may have risen far higher above the 6 percent upper target limit and that may just have been the catalyst for the Reserve Bank to start hiking interest rates."
Loos added that interest rate hikes appeared to have been significantly delayed and residential buying demand had continued to grow gradually.
He expected the rental market to pick up from the start of expected interest rate hikes around 2014. Increases in rates would be a catalyst for a stronger rental market as many aspirant first-time buyers would delay buying a home and rent for longer.
Loos said weak buy-to-let buying did lay the foundation for the ultimate recovery of the rental market by constraining supply, which would gradually set the basis for a future shortage leading to stronger rental inflation.
However, Loos said it appeared that significant strengthening in the rental market might be some way off, with credit dependent first-time home buyers flocking into the home buying market in greater numbers as opposed to renting.
Loos said the percentage of residential buyers who were purchasing properties to let was believed to have remained fairly weak based on the results of FNB's fourth-quarter estate agent survey.
He said agents surveyed estimated about 8 percent of sales were to buy-to-let buyers, virtually unchanged from the previous three quarters and still a far cry from the almost 25 percent recorded in 2004.
Loos attributed the weakness in the buy-to-let market to the current significant household sector pressure.
The sources of this pressure had been a mediocre economic performance despite some recent improvement, along with sharp increases in the cost of high-frequency consumer purchases.
"Although price inflation for petrol and food are starting to turn for the better, their inflation rates remain very high and these highly essential items do exert a significant degree of financial pressure.
"But more significant in limiting the appeal of owning a second home is arguably the ongoing increases in municipal rates while utilities tariffs, most notably in the area of electricity, are skyrocketing."
Loos said while utilities tariffs were generally passed on to the tenant in a rental property, the general levels of financial pressure in recent years must often have meant the negative impact on tenants of these tariffs and other CPI inflation items limited the "pricing power" of landlords in hiking rentals.
Business Report
05 March 2012
Hope for lower income property buyers?
Hope for lower income property buyers?
Property ownership has been, and continues to be a vital aspect of life in South Africa - especially for the lower income groups.
This is plain to see from the amount of protests regarding housing and the incredible demand for RDP homes. The demand for property has gone un-sated mainly due to the fact that it is incredibly difficult for this group to obtain home loans.
While the State of the Nation Address is a key, yearly moment of import for South African politics, it is doubtful that those in the residential property market trade expected any surprises. Predictably the key topics of job creation and infrastructure development took precedence but, there was also significant announcement regarding the purchasing of property.
The President quoted from a letter written by Mzukisi Mali - a public servant in the Grahamstown region. Mr Mali, it turns out, is in the unenviable position, which thousands of South Africans share, of being too well off to qualify for an RDP house but, too risky a proposition for a bank to grant him a home loan. This situation is all too common and very difficult to resolve on a personal level.
In 2010 government announced the creation of a one billion Rand guarantee fund with which it hoped to enable citizens to obtain home loans. Zuma indicated that; "We are pleased to report that this fund will start its operations in April, managed by the National Housing Finance Corporation."
It is important to note that there will now be two financial schemes in play: the national housing-guarantee scheme - of R1 billion - and the housing subsidy for the gap market which will enable prospective home owners earning between R3,500 and R15,000 to procure a subsidy of up to R85 000 from their respective provincial housing departments.
"The roll out of this fund could change the property landscape significantly in that many more people will now be able to afford purchasing a home as opposed to renting a property" says Jan le Roux, CEO of Leapfrog Property Group.
Rudi Botha, CEO of leading mortgage originator Betterbond, says: "We are obviously pleased at the news that the long-awaited housing guarantee scheme will start to be implemented soon - although there is some doubt about whether it will be finalised by April. This scheme will basically subsidise the premium payable by the borrower for an insurance policy that protects a bank against loss if the borrower defaults on a home loan."
South Africa is not the first nation to toy with the idea of assisting buyers in purchasing their first homes. The Dutch have piloted a Home Ownership Guarantee Fund with great success. In 2002 over a third of Dutch mortgages with a National Mortgage Guarantee from the Fund.
According to the Ministry of Housing, Spatial Planning and the Environment, International Housing Unit [link: www.vrom.nl], the fund guarantees: "the lender repayment of the mortgage debt if the buyer can no longer fulfil his obligations. Any residual debt after compulsory sale will in principle be waived and will be borne by the fund." The amount required is born in half by the government and in half by the local authorities should the principal debtor's funds be insufficient to cover the loan.
As a result of this scheme, Dutch home buyers - from lower income groups - have found that financial institutions are more amenable to loaning money and, that they set a marginally lower rate of interest. There are strict requirements: the property (to be purchased) must be below a certain amount and the mortgage costs may not be too high in relation to the applicant's income.
"Should the South African guarantee scheme come into play in 2012, international evidence indicates that it will do much to encourage banks to lend money, thereby placing lower income buyers into their first homes - a move that is long overdue", says le Roux.
Leapfrom Press Release
Property ownership has been, and continues to be a vital aspect of life in South Africa - especially for the lower income groups.
This is plain to see from the amount of protests regarding housing and the incredible demand for RDP homes. The demand for property has gone un-sated mainly due to the fact that it is incredibly difficult for this group to obtain home loans.
While the State of the Nation Address is a key, yearly moment of import for South African politics, it is doubtful that those in the residential property market trade expected any surprises. Predictably the key topics of job creation and infrastructure development took precedence but, there was also significant announcement regarding the purchasing of property.
The President quoted from a letter written by Mzukisi Mali - a public servant in the Grahamstown region. Mr Mali, it turns out, is in the unenviable position, which thousands of South Africans share, of being too well off to qualify for an RDP house but, too risky a proposition for a bank to grant him a home loan. This situation is all too common and very difficult to resolve on a personal level.
In 2010 government announced the creation of a one billion Rand guarantee fund with which it hoped to enable citizens to obtain home loans. Zuma indicated that; "We are pleased to report that this fund will start its operations in April, managed by the National Housing Finance Corporation."
It is important to note that there will now be two financial schemes in play: the national housing-guarantee scheme - of R1 billion - and the housing subsidy for the gap market which will enable prospective home owners earning between R3,500 and R15,000 to procure a subsidy of up to R85 000 from their respective provincial housing departments.
"The roll out of this fund could change the property landscape significantly in that many more people will now be able to afford purchasing a home as opposed to renting a property" says Jan le Roux, CEO of Leapfrog Property Group.
Rudi Botha, CEO of leading mortgage originator Betterbond, says: "We are obviously pleased at the news that the long-awaited housing guarantee scheme will start to be implemented soon - although there is some doubt about whether it will be finalised by April. This scheme will basically subsidise the premium payable by the borrower for an insurance policy that protects a bank against loss if the borrower defaults on a home loan."
South Africa is not the first nation to toy with the idea of assisting buyers in purchasing their first homes. The Dutch have piloted a Home Ownership Guarantee Fund with great success. In 2002 over a third of Dutch mortgages with a National Mortgage Guarantee from the Fund.
According to the Ministry of Housing, Spatial Planning and the Environment, International Housing Unit [link: www.vrom.nl], the fund guarantees: "the lender repayment of the mortgage debt if the buyer can no longer fulfil his obligations. Any residual debt after compulsory sale will in principle be waived and will be borne by the fund." The amount required is born in half by the government and in half by the local authorities should the principal debtor's funds be insufficient to cover the loan.
As a result of this scheme, Dutch home buyers - from lower income groups - have found that financial institutions are more amenable to loaning money and, that they set a marginally lower rate of interest. There are strict requirements: the property (to be purchased) must be below a certain amount and the mortgage costs may not be too high in relation to the applicant's income.
"Should the South African guarantee scheme come into play in 2012, international evidence indicates that it will do much to encourage banks to lend money, thereby placing lower income buyers into their first homes - a move that is long overdue", says le Roux.
Leapfrom Press Release
Carlos Slim tops the Bloomberg Billionaires Index
Carlos Slim tops the Bloomberg Billionaires Index
Mark Zuckerberg, founder of Facebook, didn’t make the cut.
Carlos Slim, the telecommunications tycoon who controls Mexico’s America Movil SAB, is the richest person on Earth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 20 wealthiest individuals.
The 72-year-old’s net worth fell $478.4 million in a day to $68.5 billion as of the close of markets on March 2, as U.S. moguls Bill Gates and Warren Buffett placed second and third on the list compiled by Bloomberg News. Brazil’s Eike Batista, who ranks 10th, still covets the top spot after vowing a year ago that he’d become the world’s wealthiest man by 2015.
“I’m competitive,” Batista, who trails Slim by almost $39 billion, said in a March 2 telephone interview from Rio de Janeiro. “It’s Brazil’s time to be No. 1. Brazilians have always admired the American dream. What’s happening in Brazil is the Brazilian dream and I happen to be the example.”
The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York. The valuations are listed in U.S. dollars.
Today’s ranking was published with the release of new billionaires profile pages in the Bloomberg Professional service. The profiles feature a transparent analysis of how each billionaire’s fortune was calculated.
Slim’s fortune has increased 11 percent this year, according to the index. A spokesman for Slim didn’t immediately return a telephone request for comment.
Gates, Buffett
Gates, 56, co-founder of Microsoft Corp. (MSFT) in Redmond, Washington, is worth $62.4 billion, down $102.1 million on March 2 and up 11 percent year to date.
The fortune of Buffett, 81, chairman of Omaha, Nebraska- based Berkshire Hathaway Inc. (BRK/B), declined $336.9 million to $43.8 billion on March 2 and is up 2.4 percent in 2012. Almost all of Buffett’s wealth is held in Berkshire Hathaway, the publicly traded holding company he has run since 1965.
The combined net worth of the 20 richest people is $676.8 billion. Nine are Americans, including three from the family of Sam Walton, the founder of Wal-Mart Stores Inc. (WMT)
Number seven is Larry Ellison, 67, chief executive officer of Redwood City, California-basedOracle Corp. (ORCL), the world’s third-largest software maker after Microsoft and SAP AG. (SAP) His $38 billion fortune puts him $4 billion ahead of brothers Charles and David Koch, who each own 42 percent of Koch Industries Inc., one of the biggest closely held companies in the world by revenue. Charles, 76, and David, 71, control the Wichita, Kansas, refiner and chemical maker.
Batista, 55, whose investments range from iron ore to coal, is worth $29.8 billion, up $133.9 million on March 2. His fortune has grown 32 percent this year, the most on the list.
The House Wins
Sheldon Adelson, the casino magnate who owns 47 percent of Las Vegas Sands Corp. (LVS), which operates resorts in Macau and Las Vegas, is number 13 with $25.7 billion. Adelson, 78, and his family have pledged at least $10 million to a super-PAC supporting Newt Gingrich, a Republican presidential candidate.
Liliane Bettencourt, 89, who with her family owns 31 percent of Paris-based cosmetics company L’Oreal SA (OR), is last on the ranking. Bettencourt was the subject of an international scandal in 2007 when her daughter, Francoise Bettencourt Meyers, filed a lawsuit accusing a family friend, photographer Francois- Marie Banier, of exploiting her mother’s frail state. Evidence later revealed Bettencourt had granted more than $1 billion in cash and gifts to Banier. In October, Meyers and two grandsons became guardians of the clan’s $22.4 billion fortune.
Diluting Zuckerberg
Mark Zuckerberg, the 27-year-old founder of Facebook Inc. (FB), the world’s largest social-networking company, didn’t make the cut. Based on a roughly $100 billion valuation the Menlo Park, California-based company has been trading at in the private market, Zuckerberg’s stake may be worth $21 billion, or about 25 percent less than previous estimates, once Facebook holds its initial public offering.
The reason: Facebook will issue more than 500 million shares of its Class B stock at the offering, diluting Zuckerberg’s ownership to 21 percent after he exercises 120 million options and sells about 42 million shares to cover the tax bill associated with the gain from those options.
Sweden’s Ingvar Kamprad is the richest European, according to the index, ranking fourth globally with a $42.5 billion net worth. Kamprad, 85, controls Ikea Group, the world’s largest furniture retailer, through a series of trusts and foundations he asserts he doesn’t own.
Luxury Goods
Bernard Arnault, the chairman of LVMH Moet Hennessy Louis Vuitton SA (MC), places fifth. The majority of Arnault’s $42.3 billion comes from his stake in Paris-based LVMH, the world’s largest maker of luxury goods. Arnault, 63, controls about 46 percent of LVMH’s outstanding stock through his family group, according to the company’s latest annual report.
Amancio Ortega, whose publicly traded Inditex SA (ITX) owns the Zara clothing chain, is Spain’s wealthiest individual and sixth in the world with a $38.8 billion fortune. Ortega, 75, has invested dividends from Arteixo-based Inditex into a real estate portfolio that owns office and retail properties in the U.S. and Europe.
No Russians appear in the index as falling metals prices hurt the fortunes of many of the richest oligarchs. Alisher Usmanov, 58, the Muscovite who controls the Metalloinvest metals and mining company and Digital Sky Technologies, which currently owns 5.5 percent of Facebook, is Russia’s wealthiest person thanks to a $20.1 billion fortune.
Asia’s Wealthiest
Mukesh Ambani, 54, leads Asians with a net worth of $26.8 billion, down $185.4 million in a day. His fortune is up 25 percent this year, according to the Bloomberg Billionaires Index, as his shares in India’s top company by market value, Mumbai-based Reliance Industries Ltd. (RIL), have risen 17 percent.
Hong Kong’s Li Ka-shing, nicknamed “Superman” by the local media for his investing prowess, ranks second in the region, with $25.8 billion. Li, 83, owns large stakes in Hong Kong-based property developer Cheung Kong Holdings Ltd. (1), Hong Kong shipping and ports operator Hutchison Whampoa Ltd. (13) and Husky Energy Inc. (HSE), the Calgary-based energy company.
Lakshmi Mittal, the India-born chairman of ArcelorMittal (MT), the world’s biggest steelmaker, is the third-richest Asian, with holdings valued at $23.6 billion. In addition to his ArcelorMittal stake, the 61-year-old London resident owns hundreds of millions of dollars in U.K. real estate.
On the rise: Gina Rinehart, the Australian mining heiress who is worth $20.4 billion. Rinehart, 58, the daughter of the man who discovered the mines that made Australia the world’s biggest iron ore exporter, inherited perpetual royalty rights to some of Rio Tinto Ltd. (RIO)’s Hamersley mines in addition to other thermal and iron-ore deposits throughout the country.
Soaring demand for coal and iron ore from China have made Rinehart’s assets attractive to acquisitive industrial companies. In separate deals in the past year, steelmakers Posco andGVK Power & Infrasture Ltd. (GVKP) agreed to pay a combined $2.9 billion for pieces of Rinehart’s empire.
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Mark Zuckerberg, founder of Facebook, didn’t make the cut.
Carlos Slim, the telecommunications tycoon who controls Mexico’s America Movil SAB, is the richest person on Earth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 20 wealthiest individuals.
The 72-year-old’s net worth fell $478.4 million in a day to $68.5 billion as of the close of markets on March 2, as U.S. moguls Bill Gates and Warren Buffett placed second and third on the list compiled by Bloomberg News. Brazil’s Eike Batista, who ranks 10th, still covets the top spot after vowing a year ago that he’d become the world’s wealthiest man by 2015.
“I’m competitive,” Batista, who trails Slim by almost $39 billion, said in a March 2 telephone interview from Rio de Janeiro. “It’s Brazil’s time to be No. 1. Brazilians have always admired the American dream. What’s happening in Brazil is the Brazilian dream and I happen to be the example.”
The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York. The valuations are listed in U.S. dollars.
Today’s ranking was published with the release of new billionaires profile pages in the Bloomberg Professional service. The profiles feature a transparent analysis of how each billionaire’s fortune was calculated.
Slim’s fortune has increased 11 percent this year, according to the index. A spokesman for Slim didn’t immediately return a telephone request for comment.
Gates, Buffett
Gates, 56, co-founder of Microsoft Corp. (MSFT) in Redmond, Washington, is worth $62.4 billion, down $102.1 million on March 2 and up 11 percent year to date.
The fortune of Buffett, 81, chairman of Omaha, Nebraska- based Berkshire Hathaway Inc. (BRK/B), declined $336.9 million to $43.8 billion on March 2 and is up 2.4 percent in 2012. Almost all of Buffett’s wealth is held in Berkshire Hathaway, the publicly traded holding company he has run since 1965.
The combined net worth of the 20 richest people is $676.8 billion. Nine are Americans, including three from the family of Sam Walton, the founder of Wal-Mart Stores Inc. (WMT)
Number seven is Larry Ellison, 67, chief executive officer of Redwood City, California-basedOracle Corp. (ORCL), the world’s third-largest software maker after Microsoft and SAP AG. (SAP) His $38 billion fortune puts him $4 billion ahead of brothers Charles and David Koch, who each own 42 percent of Koch Industries Inc., one of the biggest closely held companies in the world by revenue. Charles, 76, and David, 71, control the Wichita, Kansas, refiner and chemical maker.
Batista, 55, whose investments range from iron ore to coal, is worth $29.8 billion, up $133.9 million on March 2. His fortune has grown 32 percent this year, the most on the list.
The House Wins
Sheldon Adelson, the casino magnate who owns 47 percent of Las Vegas Sands Corp. (LVS), which operates resorts in Macau and Las Vegas, is number 13 with $25.7 billion. Adelson, 78, and his family have pledged at least $10 million to a super-PAC supporting Newt Gingrich, a Republican presidential candidate.
Liliane Bettencourt, 89, who with her family owns 31 percent of Paris-based cosmetics company L’Oreal SA (OR), is last on the ranking. Bettencourt was the subject of an international scandal in 2007 when her daughter, Francoise Bettencourt Meyers, filed a lawsuit accusing a family friend, photographer Francois- Marie Banier, of exploiting her mother’s frail state. Evidence later revealed Bettencourt had granted more than $1 billion in cash and gifts to Banier. In October, Meyers and two grandsons became guardians of the clan’s $22.4 billion fortune.
Diluting Zuckerberg
Mark Zuckerberg, the 27-year-old founder of Facebook Inc. (FB), the world’s largest social-networking company, didn’t make the cut. Based on a roughly $100 billion valuation the Menlo Park, California-based company has been trading at in the private market, Zuckerberg’s stake may be worth $21 billion, or about 25 percent less than previous estimates, once Facebook holds its initial public offering.
The reason: Facebook will issue more than 500 million shares of its Class B stock at the offering, diluting Zuckerberg’s ownership to 21 percent after he exercises 120 million options and sells about 42 million shares to cover the tax bill associated with the gain from those options.
Sweden’s Ingvar Kamprad is the richest European, according to the index, ranking fourth globally with a $42.5 billion net worth. Kamprad, 85, controls Ikea Group, the world’s largest furniture retailer, through a series of trusts and foundations he asserts he doesn’t own.
Luxury Goods
Bernard Arnault, the chairman of LVMH Moet Hennessy Louis Vuitton SA (MC), places fifth. The majority of Arnault’s $42.3 billion comes from his stake in Paris-based LVMH, the world’s largest maker of luxury goods. Arnault, 63, controls about 46 percent of LVMH’s outstanding stock through his family group, according to the company’s latest annual report.
Amancio Ortega, whose publicly traded Inditex SA (ITX) owns the Zara clothing chain, is Spain’s wealthiest individual and sixth in the world with a $38.8 billion fortune. Ortega, 75, has invested dividends from Arteixo-based Inditex into a real estate portfolio that owns office and retail properties in the U.S. and Europe.
No Russians appear in the index as falling metals prices hurt the fortunes of many of the richest oligarchs. Alisher Usmanov, 58, the Muscovite who controls the Metalloinvest metals and mining company and Digital Sky Technologies, which currently owns 5.5 percent of Facebook, is Russia’s wealthiest person thanks to a $20.1 billion fortune.
Asia’s Wealthiest
Mukesh Ambani, 54, leads Asians with a net worth of $26.8 billion, down $185.4 million in a day. His fortune is up 25 percent this year, according to the Bloomberg Billionaires Index, as his shares in India’s top company by market value, Mumbai-based Reliance Industries Ltd. (RIL), have risen 17 percent.
Hong Kong’s Li Ka-shing, nicknamed “Superman” by the local media for his investing prowess, ranks second in the region, with $25.8 billion. Li, 83, owns large stakes in Hong Kong-based property developer Cheung Kong Holdings Ltd. (1), Hong Kong shipping and ports operator Hutchison Whampoa Ltd. (13) and Husky Energy Inc. (HSE), the Calgary-based energy company.
Lakshmi Mittal, the India-born chairman of ArcelorMittal (MT), the world’s biggest steelmaker, is the third-richest Asian, with holdings valued at $23.6 billion. In addition to his ArcelorMittal stake, the 61-year-old London resident owns hundreds of millions of dollars in U.K. real estate.
On the rise: Gina Rinehart, the Australian mining heiress who is worth $20.4 billion. Rinehart, 58, the daughter of the man who discovered the mines that made Australia the world’s biggest iron ore exporter, inherited perpetual royalty rights to some of Rio Tinto Ltd. (RIO)’s Hamersley mines in addition to other thermal and iron-ore deposits throughout the country.
Soaring demand for coal and iron ore from China have made Rinehart’s assets attractive to acquisitive industrial companies. In separate deals in the past year, steelmakers Posco andGVK Power & Infrasture Ltd. (GVKP) agreed to pay a combined $2.9 billion for pieces of Rinehart’s empire.
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