Directors refuse access to shareholder registers of Sharemax-linked companies.
A director of Nova Property Group has accused this Moneyweb journalist of terrorism and extortion. This came after Moneyweb reminded them that the failure to allow access to a company’s securities register may constitute a criminal offence.
Moneyweb has applied to inspect the shareholder registers of three entities: Nova Property Group, Frontier Asset Management and Centro Property Group. Nova is the company that owns all the properties that used to belong to investors in the various Sharemax-promoted property syndication schemes. When the Sharemax investors voted in favour of a rescue scheme, they become either shareholders in the Nova Group or debenture holders in a Nova subsidiary
It remains to be seen how much say these investors have, if any, in the appointment of directors at Nova. An inspection of the securities register would clarify the situation. Nova is currently under the directorship of its managing director Dominique Haese, chairman Connie Myburgh, financial director Rudi Badenhorst, and operations director Dirk Koekemoer.
On July 24, Moneyweb submitted applications to inspect the securities registers of Nova, Frontier and Centro Prop. The applications were made in terms of Section 26(2) of the Companies Act, which grants any member of the public the right to inspect and copy a company’s securities register, provided the correct process is followed.
On August 14 Centro Property Group financial director Erna Grobler denied Moneyweb access to the securities register on the basis that it is a private company. Moneyweb replied that the fact that Centro Property Group is a private company is no basis upon which to refuse access to the securities register. Moneyweb informed Grobler that in terms of Section 26(9) of the Companies Act, the failure to comply with a legitimate request for access renders the company, and every director or officer who is knowingly a party to the refusal, guilty of a criminal offence.
On August 15, Moneyweb received responses from Nova Property Group, Frontier Asset Management and Centro Property Group. The responses can be downloaded here (Nova), here (Frontier) and here (Centro). The responses are virtually identical for each company. In the Nova response, Haese claims that the right to information which Moneyweb wishes to exercise is qualified by and subject to the provisions of the Promotion of Access to Information Act (PAIA).
Haese says that Moneyweb’s reference to Section 26(9) of the Companies Act “is not only ill-considered and misplaced, but also unlawful, as same is clearly written in terrorem, and intended to be extortive”. Haese continues: “…all our rights and the rights of the ‘directors and officers’ who you clearly intend to terrorise and abuse, are reserved. “As indicated to you previously, no purpose has ever been served in responding to or dealing with you.”
It seems reasonable to ask whether all of Nova’s directors are best suited to manage the property portfolio in the interests of investors. For example, Dominique Haese is one of four Sharemax directors who have been accused by Fais Ombud Noluntu Bam of running “nothing more than a Ponzi scheme”. This comment was made by the Ombud in connection with the Zambezi investment scheme that was promoted by Sharemax under the control of Haese and her co-directors. Corporate lawyer Connie Myburgh has previously acted for Garek, a scheme that resulted in some 2000 investors losing R74m. Long-time Moneyweb readers will remember Myburgh for his aggressive defence of Garek.
A circular distributed to investors at the time of the rescue reveals that Haese, Koekemoer and Badenhorst jointly held 43.2% of Nova’s issued shares. This would ensure that there is little danger of the directors being voted off the board, should the former Sharemax investors wish to remove them.
Sharemax Investors’ Forum representative Herman Lombaard tells Moneyweb that he has repeatedly asked the Nova directors how they acquired this large stake in Nova and what it cost them. Furthermore, Lombaard notes that Haese benefits from the rescue scheme in other ways. For example, Haese is a director of and shareholder in Frontier Asset Management, which supplies administrative services to Nova Property Group.
Lombaard also claims that Haese has a shareholding in Centro Property Group, which has been contracted by Nova to manage its property portfolio. Moneyweb is currently seeking legal advice on how to proceed with the application to inspect the companies’ securities registers. Prior to publication, a copy of this article was sent to Haese with the invitation to correct possible factual errors or offer comment.
Haese's response follows:
Dear Mr Cobbett,
Your email and draft article below refers.
We are not prepared to comment
This response should however not be assumed by you as you being correct or not. All rights remain reserved.
Should you wish to print anything, we insist that you print this response.
Regards Dominique Haese
Managing Director Nova Property Group