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Orthotouch BRP aims to negotiate a ‘concrete’ offer for investors

Minimal assets remain in Orthotouch and Zephan and the companies seem hopelessly insolvent.

The new Orthotouch business rescue practitioner intends to produce a rescue plan that will offer investors a short-term option to salvage at least a portion of their original investments.

Orthotouch is the rescue vehicle of the former Highveld Syndication (HS) companies, in which around 18 700 mostly elderly people invested R4.6 billion. 

More information about this potential option will be made available on Thursday, when Jacques du Toit of Du Toit Business Rescue Practice will chair the first creditors’ meeting after property magnate Nic Georgiou placed Orthotouch into business rescue. 

Read: Georgiou puts Orthotouch and Zephan into business rescue

Georgiou also put Zephan into business rescue, which is the underwriter of the Orthotouch scheme. Georgiou stated in his submission to the Companies and Intellectual Property Commission (CIPC) that Orthotouch was indebted to the tune of R5.4 billion and Zephan to the tune of R2.4 billion, and were unable to pay these creditors.

Georgiou, or entities related to him, own both companies.

For the full background regarding the history of the HS companies, read the following articles:

The peculiar case of the Picvest billions (Part 1) (Background)

The peculiar case of the Picvest billions (Part 2) (Background)

The peculiar case of the Picvest billions (Part 3) (Overvaluation of properties)

The peculiar case of the Picvest billions (Part 4) (Property transactions prior to HS companies being put into business rescue)

The peculiar case of the Picvest billions (Part 5) (Disposal of properties contradicts the intent of the business rescue plan)

The peculiar case of the Picvest billions: Part 6 (The murky sale of 31 ‘Orthotouch Properties’ to Accelerate)

Jacques du Toit

Jacques du Toit of Du Toit Business Rescue Practice.

In an open interview with Moneyweb, Du Toit said he wants to put a concrete offer on the table so investors can make a decision. “I don’t know Nic Georgiou at all. I only met him recently. I told him I am not here to make promises. I will not put a business plan on the table, making promises about future returns. There must be money or shares on the table so investors can take it or leave it. The offer must also be better than what a liquidation would yield.”

Du Toit added that “a third needs to come to the party with either shares or money, which could be offered to investors. I cannot provide more details now, but I am in the process of finalising this. But before I make promises, I want to see concrete facts. 

“We need to get closure for these people. I want to get something concrete on the table so these people can make a decision. If the creditors do not think it is enough, I will liquidate the company.”

Du Toit added that all investors are welcome to attend the meeting if their claims against Orthotouch are valid.

Assets

Du Toit said his initial investigation shows there are five properties in Zephan and two in the HS companies, and that he has requested valuations for these properties.

A Moneyweb investigation found that the two remaining HS properties are The Bridge Shopping Centre in Cape Town and Absa Witbank in eMalahleni. These properties are relatively small, as The Bridge (HS 16) was initially syndicated for R19 million and Absa Witbank (HS 18) for R15.1 million.

The investigation also found that Orthotouch does not own a single property and is, therefore, not in any position to repay investors without external funding.

A Windeed search confirms Du Toit’s assertion that only five properties remain in Zephan, although it seems as if Georgiou sold several properties during the past year. 

Last year Georgiou stated in an affidavit, filed in defence of an unsuccessful liquidation application against Zephan, that Zephan directly or indirectly owned 11 unencumbered properties valued at around R266 million. If Zephan currently owns only five properties, a total of six properties were subsequently sold. 

It is therefore clear that Orthotouch and Zephan are hopelessly insolvent as their assets represent a fraction of the multiple billions of debt. 

It will therefore be interesting to hear Du Toit’s opinion as to whether a business rescue process will be able to save Zephan and Orthotouch.

If for whatever reason, these companies are put into liquidation, there may be an application to the Master of the Court to institute a Section 417 enquiry about the possible looting of the companies’ assets before the company goes into liquidation.

The dark underbelly of the business rescue industry

‘Guilt without trial’ – Klopper

Accelerate offer

It is not apparent whether the business rescue process will affect the investors who have accepted the Accelerate share offer facilitated by the Highveld Syndication Investment Forum (HSIF). This offer also seems to remain open to current investors until the end of November.

The salient terms of the offer are that HS investors will receive 25% of their original investments in Accelerate shares at the net asset value of R7.50 an Accelerate share. They will also receive dividends.

However, the Accelerate share price is currently trading at R1.69, which means investors will, in effect, receive less than 6% of their original investment.

Accelerate intraday share price

Furthermore, several HS investors who accepted the offer as far back as last year, claimed they had not received their Accelerate shares in terms of the offer.

Helgard Hancke, the individual who runs the HSIF, did not respond to a question on why the Accelerate shares were not issued to the investors as alleged.  

Hancke, however, stated in a communication sent to investors on Tuesday that investors who accepted the Accelerate offer are no longer HS investors or bound by the Orthotouch scheme. He also stated that “we were informed and assured that the issuing of shares and future dividend payments will not be influenced by the Orthotouch Business Rescue plan.”

Interestingly, the private investigation firm of Mike Bolhuis published a document within days of Orthotouch and Zephan being put into business rescue, in which the firm endorsed the 25% Accelerate offer.

Read: Mike Bolhuis enters the Orthotouch fray

However, Bolhuis’s firm did not highlight that investors will receive less than 6% of their investments, even after Moneyweb pointed this out.

The firm denied that it was paid to publish the document.

The creditors’ meeting will take place at 11:00 at Hotel Apollo, 158 Bram Fischer Drive, Ferndale, Randburg on November 28.

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So what happened to all the HS properties. How can you sell what does not belong to you. The Georgios must all own up and refund the investors 100%. Sell some of the Ferraris an Lamborginis standing in Cedar Square’s underground parking.

Most of the HS Properties were “sold” to Nic Georgiou’s son’s Company called: ACCELERATE Property Fund which is listed on the JSE

Personally, I’m really not interested in yet ANOTHER OFFER!!

I want them to PAY BACK THE MONEY, WITH INTEREST.

ORTHOTOUCH is an empty shell, lets get to the bottom of all the unanswered questions (like what happened to the R4.6 Billion?) And start that 417 enquiry…today!!!

#PayBackTheF’ingMoney

I want our capital, plus promised growth, plus interest on interest.

“Du Toit said he wants to put a concrete offer on the table so investors can make a decision. “I don’t know Nic Georgiou at all. I only met him recently. I told him I am not here to make promises.” ”

So, Mr Jacques du Toit… you win either way… you get paid Millions if you are able to come up with an offer for creditors (if they will accept it) and if not, you get paid to liquidate. YOU WIN WIN WIN all the way to the bank.

What a waste of more money (Investors money) this is!

Hans Klopper could not save the HS Companies in 3 years when all the Buildings were still there and now that there are NO BUILDINGS in Orthotouch you still think you can save the day??? I’m gob smacked!!

I see you have worked together with Hans Klopper in 2015..
https://www.fin24.com/Companies/Retail/exclusive-urban-owner-in-final-bid-to-save-iconic-sa-stores-20151208

Why don’t you do due diligence, investigate and report what has happened!

I quote:
THE ROLE OF THE BUSINESS RESCUE PRACTITIONER
“If the Practitioner during his/her investigation finds that any of the directors traded recklessly or committed fraud, or contravened any other law relating to the Company, then the Practitioner must  forward the evidence to an appropriate authority for further investigation and possible prosecution.  Apart from this, the Practitioner must also direct the management to take any necessary steps to rectify the matter, including recovering any assets of the Company that may have been misappropriated.”

I fully agree 417 is the way to go Stop beating around the Bush Mr du Toit take note you need to do your homework in depth to come up with a solid deal The Georgio’s has never ever fulfilled any obligations whether there was a contract or not. They are arrogant and will play you like a kitten with wool. Please make use of all the MONEYnWEB info which explains this opportunistic ransacking of properties in detail and with this detail in a nutshell being read you will come to an informed conclusion 417 is screaming for justice to be revealed Investors pain will ease if criminal charges are imposed There are many well informed people to help you MAKE USE OF THEM Hans Klopper has experienced this ordeal Knowledge is power!!

Accelerate Property Fund Shares are at an all time low as of: 05th Dec 2019

R1.29!!

Nic Georgiou (Orthotouch /Zephan) and Helgard Hancke (HSBF / HSIF) shame on you for selling these shares as a ‘concrete’ offer to HS Investors – a full and final settlement of their Original Capital Investment!!!

You have valued the shares at R7,50!!

What OFFER except this 25% ACCELERATE JSE shares standing @ share price of today R1.70 can they come up with?

I am litigating through the HSAG since 2014 and will keep on until Nicolas Georgiou PAY BACK MY MONEY, WITH INTEREST.

I agree ORTHOTOUCH is an empty shell, lets get to the bottom by starting a 417 enquiry.

Bear in mind that Nic Georgio received R4.6 billion from Eugene Kruger trust acc which was hard earned cash from 18000 plus investors Most of those properties from which he already received the money were then also sold for a second time to Accelerate (which is headed by his son Michael Georgio) and others So if you think logical Nic Georgio received more than R4.6b for the properties that investors paid for. Another jackpot question HOW DID MICHAEL GEORGIO PAY FOR HIS ACCELERATE SHARES??? Prove of his transaction are of utmost importance.
So bring on the liquidation application to get this misery sorted once and for all.Bank statements cannot be bribed or deleted!!

Agree.
Liquidate.
417 Investigation.

Do not pass GO.
Do not collect $200.
Go directly to …

Liquidate. We as investors want a Section 417 by the Master who’ll then have no other option but to institute criminal liabilities/investigations. Georgiou under impression this will delay Court Orders and Certification of Class Action, however, I for one certain that as investors we’ll AT LAST have a 417 investgation – Master will have no other option – looting after all done with consent of another Master appointee – Klopper. Come to think of it – the Master has a lot to answer for to the investors. How come that Office had just stood on the sideline and done NOTHING.

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