HSAG and Georgiou lock horns, again

Helgard Hancke applies to intervene in application for leave to appeal.
Nic Georgiou Picture: Moneyweb

Sparks flew in the North Gauteng High Court last week in property magnate Nic Georgiou’s application for leave to appeal against a May judgment that found his conduct to be unethical and an attempt to abuse the court process.

Helgard Hancke, a former member of the Highveld Syndication Action Group (HSAG) who now assists investors with settling their claims directly with Georgiou, submitted an explosive affidavit as part of his application to become an intervening party to the proceedings. In this affidavit, Hancke alleges that some facts in HSAG lawyer Jacques Theron of T&V’s original affidavit, which the courts relied upon, were false and that he did not act in the best interest of investors. This challenges information Theron put before the court in his original application and on which the judgement was based.

Theron denied these allegations but is yet to file a responding affidavit under oath.

The application for leave to appeal follows a judgment in May, which was critical of Georgiou’s conduct to secretly settle the claims of the applicants who represented around 7 000 HSAG members in their quest to institute a class action against Georgiou.

The settlements were dependent on the condition that they withdraw their application for certification for the class action, which would effectively bring an end to the class action application.

A similar judgment was delivered for the other three applicants in the South Gauteng High Court.

Helgard Hancke’s affidavit

In his affidavit Hancke alleged that Johan Stander, a longstanding HSAG executive member, and Theron demanded a commission of 1% on all the settlements they negotiated on behalf of HSAG investors with Georgiou.

“I am aware that Theron requested a commission of 1% of the settlement reached on behalf of any investor and Georgiou. I assume it is for this reason that the applicants settled their claims with Georgiou directly and that they did not pursue their claims through the channels and the system made available by Theron.”

In a subsequent interview with Moneyweb, Hancke said Georgiou refused to pay the 1% commission and the claims of around 800 HSAG who were keen to settle, were not settled.

Hancke also recalls “a specific meeting in Benoni, secretly arranged by Stander and Theron with Georgiou, where Theron proposed a commission of R25 million from Georgiou in order to settle the class action. These claims later escalated to as much as R66 million.”

Hancke added that the class action application was extremely lucrative for Theron and that it was in his best interest that it continued. “I recall mention being made of contributions of up to R15 million in just three years, however Theron refused to furnish audited financial statements of his trust account.” His office claims it is confidential information.

This was also disputed by Elna Visagie, another former member of the HSAG and currently in the employment of Georgiou, in a supporting affidavit to Hancke’s affidavit. She confirmed Hancke’s contention that Theron sought a 1% commission on settlements he negotiated. She attached a copy of a handwritten note, which was apparently “supplied” by Stander to Georgiou in March 2017 “whereby (the) HSAG claimed a further 1% negotiators fee together with the administrative fees and legal fees that were already paid by the investors – totalling an amount of R66 million.”

Charlene Jordaan

In another development Charlene Jordaan, one of the four HSAG members who Georgiou apparently approached in secret and settled her claim, also tried to submit an affidavit, but this was disallowed by the judge.

In this affidavit however, she also denied Theron’s version of events, especially the statement that Georgiou secretly approached her for settlement and that the six applicants didn’t know each other.

Visagie also disputed this in her affidavit.

Jordaan states that she instructed Theron to settle her claim with Georgiou, but that he failed to do so.

Jordaan then approached Georgiou directly after her claim was settled, as well as those of the other applicants.

“The settlement agreements (which I was advised had been negotiated and indeed prepared by Theron) were never signed previously as Theron was insisting upon being paid a settlement commission, which Georgiou refused to pay.”

Jordaan and Visagie also denied Theron’s claim that the applicants did not know each other. They both stated that the applicants and Theron were members of a WhatsApp group.

Theron responds

Theron strongly denied the allegations and said the application for leave to appeal did not address the merits of the case. “The facts are that Georgiou secretly paid an unknown amount of money to the applicants to settle their claims, with the condition that they would withdraw their application for class action certification.”

Georgiou strongly denied this and alleged that the applicants approached him for settlement.

Theron said Hancke was waging a smear campaign against the HSAG and himself after Georgiou secretly settled a family member’s claim and after Hancke was asked to resign from the HSAG steering committee.

Theron also strongly denied he ever demanded a 1% commission to settle claims. “This allegation is totally false. The additional allegation that my demand for this commission delayed or derailed settlement negotiations is a further blatant lie.”

Theron said the settlement agreement the HSAG negotiated and signed with Georgiou, and which was attached to his replying affidavit, did not contain any reference to a commission. 

Regarding Hancke’s claim that T&V’s fees were exorbitant, Theron said his fees were in accordance with guidelines of the law society and that he would provide a full account of his trust account at the conclusion of the case. He said he could not disclose this now, as this was sensitive information Georgiou could use against the HSAG’s application by adapting his tactics and litigation strategy, depending on his knowledge of the HSAG’s financial strength.

He also said many investors were not fully paid up.

Theron said he did not respond to Hancke’s allegations prior to the hearing as his affidavit was filed the previous day. “I just did not have time to respond. Due to the irrelevance of Hancke’s allegations it was decided to argue the case without filing an answering affidavit.”

Theron indicated that he would most definitely file a responding affidavit when the case in Johannesburg is heard in September.

Smear campaign

Theron said these allegations form part of a campaign to defame him and to diminish the support of the class action. “Georgiou has not produced one e-mail or communication that proves these amounts have been raised or commission demanded.”

Theron maintained that the applicants didn’t know each other. “The applicants were randomly selected to represent the HSAG members and live all around the country. There was a WhatsApp group, but this group was not very active… They (the applicants) were obviously aware of each other, but I would be very surprised if they ever met before they colluded with Georgiou in 2016 to withdraw the court actions.”

Theron also denied that Jordaan ever instructed him to settle her claim.

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