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Legal dispute clouds senior Pickvest exec’s defection to HSAG

Steyn denies financial dispute led to decision to support class action; Georgiou alleges attempted extortion.

A long-standing financial dispute between property magnate Nic Georgiou and Morkel Steyn, a former executive within the Pickvest and Highveld Syndication companies, may have influenced Steyn’s defection to the class action application against Georgiou.

Read: Boost for Pickvest class action

Steyn recently publicly disassociated himself from Georgiou and announced his support of the class action. He stated that he was doing this in the interest of investors and to provide momentum to the class action application.

During an open interview with Moneyweb at the time, he did not disclose the dispute.

In several legal letters sent between the legal representatives of Steyn and Georgiou, it has now emerged that the parties were embroiled in a legal dispute regarding an unspecified amount of money.

Georgiou even accuses Steyn of attempted extortion, but this is denied by André Vlok, Steyn’s attorney.

In response to Moneyweb questions, Vlok also strongly denies that the financial dispute had anything to do with Steyn’s decision to go public and to join the class action. Steyn could not respond personally due to illness.

Legal correspondence

The extent of the dispute becomes apparent in a series of legal letters sent between the parties from January to July.

Vlok sent the first letter in January and asked for an urgent audience with Georgiou. Georgiou did not respond to this letter.

In three subsequent letters, Vlok stated Steyn’s unhappiness of being treated in such a way. In one of these letters he states: “He (Steyn) will not be discarded in this manner and while there are certainly means to address his own requirements and the payment of monies due to him.”

In another paragraph, Vlok states: “We believe that he should clear his name of several of the allegations made against him, and the best way to do so would be by way of a media release. We have advised him to rather participate in the class action as a witness, and to remove his exposure, liabilities and costs in this manner. We have advised him to immediately cease all participation in his duties if he is not paid in terms of the applicable agreements.”

Georgiou’s response

Georgiou’s lawyer, Mario Kyriacou, responded to Steyn on June 23 after the publication of the Moneyweb article and denied that Georgiou owed Steyn any money. He also accused Steyn of extortion.

“What is apparent is the more blatant the wrongful threats have become in each of the letters sent – beginning with a threat to institute legal proceeding and culminating in the threat to “contact the applicants’ attorneys in the class and related actions, and to negotiate a settlement that serves (your client’s) interests”.

“These threats amount to nothing less than an attempt to extort payment of monies which, as we are instructed, are neither due or owing to your client and our client reserved their rights in all respects – including their rights to criminally prosecute your client.”

The letter then stated further: “On this score, our instructions are that our client has loaned to your client monies in excess of R14 000 000 and when our client refused to loan your client further funds and insisted upon repayment of these monies that your client had his sudden purported attack of conscience and commenced with his extortive conduct.”

Dispute not related to Steyn’s decision

In response to Moneyweb questions, Vlok stated that the financial dispute has been ongoing for years. “The reason for his decision was never an issue and his motivation to do the right thing was in any case of secondary importance.”

He added that his decision will benefit investors. “It has nothing to do with the question of whether he was owed money or not.”

Vlok also denied that Steyn threatened or tried to extort Georgiou. “The letters were normal letters of demand. They are clear attempts to resolve the situation and merely highlight the consequences of the continued conflict. If this is seen as threats, then the Georgiou group created the situation by not providing information and refusing payment to Mr Steyn.”

Jacques Theron, legal representative of the HSAG, confirmed that Steyn has not met with the HSAG.

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