‘We invited whom we could’

Nova chair acknowledges that Nova did not invite all debenture holders to a critical meeting to elect a new trustee.
Nova chair Connie Myburgh took minutes of the trustee meetings ‘in his head’. Image: Moneyweb

Several developments at recent meetings of Nova debenture holders may bring the lawfulness of the process through which the Nova Property Group is trying to have a trustee elected for the Nova Debenture Trust into question.

Four meetings were held (one for each debenture class), but only a handful of the 18 700 former Sharemax investors attended or submitted proxies. Consequently, the meetings did not achieve the required quorums. Therefore, the represented debenture holders never voted for the appointment of Pretoria-based chartered accountant Jean-Pierre Tromp as the new trustee.

The debenture holders will now return to meetings scheduled for February 18, where no minimum quorums apply.

Connie Myburgh, chairman of Nova           Image: Supplied

The trust is a critical structure in the rescue scheme as it sets out how and when Nova must repay the R4.6 billion to the 18 700 former Sharemax investors. The person appointed as trustee will likely play a key role in approving the Nova board’s decision to delay the repayment of debentures beyond the 10 years stipulated in the rescue scheme documentation, as this individual will have to approve it.


Despite the poor attendance, the meetings saw some heated exchanges between Nova chair Connie Myburgh, individual debenture holders, representatives of the Nova Debenture Creditor Action Group (NDCAG), and activist Deon Pienaar.

The NDCAG nominated Pienaar as its candidate to become the trustee.

Very few debenture holders or their proxies attended the meetings. Image: Supplied

Moneyweb received several videos of the heated altercation, including one in which Myburgh acknowledges that not all debenture holders were notified of the respective meetings.

A few years ago, Nova mailed invitations to debenture holders for a meeting to discuss a potential listing of the company, and thousands attended. Image: Supplied

Pienaar asked Myburgh whether notices of the meetings were mailed to debenture holders by registered post as set out in the trust deed.

Myburgh’s response indicated that this did not happen. He said: “We sent it to whom we could.”

Neither Myburgh nor Nova responded to questions about how debenture holders were informed of the meeting, how many were informed, or whether they believed their actions adhered to the provisions in the trust deed.

After the meeting, Pienaar said the poor attendance could be directly attributed to the fact that notices were not sent as prescribed.

Myburgh acknowledges Nova did not notify all debenture holders of the meeting:

The meeting also revealed other potential corporate governance transgressions, mostly related to a lack of transparency.

The most notable was that Myburgh did not want to make essential and relevant documentation electronically available for all debenture holders. One example was an annexure to the trust deed spelling out the election process details. Despite many protestations, Myburgh only allowed debenture holders to inspect the document at a table in front of the meeting. Myburgh refused to allow Pienaar to inspect the document because, despite the fact that he had several proxies, “he was not a debenture holder”.

NDCAG chair Roger Johnson also asked Myburgh whether he would make the minutes of the meetings available on Nova’s website for all debenture holders to access.

Myburgh replied that he would not.

Johnson subsequently asked Myburgh who was taking the official minutes of the trustee meetings, a requirement prescribed in the trust deed, to which Myburgh responded that he was taking the minutes “in his head”.

As the video shows, this led to significant unhappiness among attendees and accusations that Nova and Myburgh are untransparent.

Myburgh did not respond to a Moneyweb question to clarify whether minutes were taken.

Myburgh refuses to publish important documentation and the minutes of the meeting on the web:

No independent administrator

Another potential discrepancy was the absence of an independent administrator to count the debentures eligible to vote. It appears Nova performed this function internally.

This is relevant as the percentages of represented debentures Myburgh disclosed at the meeting before adjuring them differed from percentages Nova later published on its website.

The table below reflects the differences.

Meeting Class of debenture Official statement: % of debentures represented Percentage of represented debentures Myburgh disclosed at the respective meetings
1 Growth Plans 4.75% 4.23%
2 Income Plans 4.21% 4.07%
3 The Villa 5.12% 5.03%
4 Zambezi 5.58% 5.19%

The difference may seem small, but it indicates that the calculations changed after the meetings.

In response, Nova CEO Dominique Haese said: “The reason for the differentials is because after the closure of the meetings, we received, by email, additional proxies from debenture holders prior to the close of business on Tuesday 11 January 2022. For purposes of calculating whether or not there was a quorum, these proxies were not, self-evidently, included as part of the count as conducted at the meetings, as they had not been received as yet. They were however included, by mistake, in the table as published as part of the minutes of the outcome of the meetings.

“The meetings were adjourned on the strength of the percentages disclosed by Mr Myburgh at the meetings.

“The error in the minutes was made bona fide but the fact of the matter is that the difference in the percentages is slight. On either calculation, the meetings would not have been quorate, but in any event the percentages that were disclosed by Mr Myburgh at the meetings were the percentages relied on for the purpose of determining whether the meetings were quorate.”

Haese did not respond to a question as to why an independent administrator such as Computershare was not used to ensure objectivity and transparency.

There were also objections to the nomination of Tromp as the new trustee as well as Myburgh’s insistence that debenture holders cannot nominate their own candidate. Myburgh stated that the debenture trust deed does not allow debenture holders to nominate a candidate.

Myburgh states that debenture holders cannot nominate a candidate to become the trustee:

Read: CIPC concerned about Nova’s ability to repay debenture holders

Delay in the repayment of debentures

These developments are critical to Nova’s recent decision to postpone the repayment of debentures beyond the 10-year deadline set out in the original rescue scheme documentation. This period ends this week, on January 20, and should have marked the end of the Sharemax saga.

Nova believes the debenture trust allows for a postponement of the repayment of the debentures. This interpretation is not shared by the Companies and Intellectual Property Commission (CIPC) or Nova’s former auditor, Mkiva.

Although there are conflicting interpretations of the debenture trust deed, the paragraphs Nova referenced as giving it the authority to delay repayment require that a trustee provide written approval for such a delay.

As the position is currently vacant, Nova cannot receive such approval.

Did Cohen resign or not?

A significant matter that was apparently not discussed during the meeting was when the incumbent trustee, Derek Cohen, actually vacated his position.

Derek Cohen, the former trustee of the Nova Debenture Trust. Image: Supplied

Cohen confirmed to Moneyweb that he resigned in July 2019, but said the Nova board rejected his resignation, claiming it was unlawful.

Nova said its interpretation was based on legal advice and that Cohen remained the trustee until November last year when the board fired him.

The date is important because if Cohen’s resignation in July 2019 is valid, Nova would have neglected the prescriptions in the trust deed to inform debenture holders “immediately” of his resignation and to trigger the process to appoint a new trustee.

The trust deed also states that if the company does not adhere to the prescriptions, debenture holders could convene a meeting to appoint their own trustee.

Read: Nova board sidesteps disclosure obligations

In 2019, Cohen told Moneyweb he received several legal opinions before he resigned and one after, which confirmed that his resignation was valid. Moneyweb also sourced a legal opinion, which also confirmed it.

Johnson said in response that Myburgh intimated that Cohen had caused the problems. “Cohen was off the books in the 2020 financial year, by which time Cohen had returned all monies that Nova had been paying him. And what’s more, it’s a cheap attempt to get the debenture holders on his side by saying we have to appoint a trustee so that we can start making repayments.”


In response, Pienaar said the meetings were “neither fair nor transparent”.

He cited Myburgh’s admission that not all debenture holders were informed of the meeting per the trust deed, as well as Myburgh’s refusal to make relevant documentation available to debenture holders as examples.

Pienaar also stated that Nova refused to provide him with a list of all the proxies Nova had accepted under his name. “I need this list to verify [it against] my own list, but I’m refused access to such a list. They know they will face big challenges when I’m chosen as Trustee.”

He also said “all debenture holders have been prejudiced because of Nova’s continuous unlawful actions not to implement and finalise the repayment of debentures within the prescribed ten-year period”.

Johnson agreed with Pienaar and said the meetings were “absolutely not” transparent.

“Myburgh read a prepared statement after each meeting, and it is total spin. It set out the company’s standpoint regarding Cohen, and I would say it is only aimed to tick off an issue raised by the CIPC.”

Luister na Ryk van Niekerk se onderhoud met onafhanklike makelaar Herman Lombaard:



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Myburgh is making up the rules as he is going along.
He must surely be investigated as a potential delinquent director. Gerrie Nel… you prosecuted Dudu Myeni for state capture. Maybe you should look at Myburgh for corporate capture?

I don’t know why this scheme is still operating as it is clearly insolvent, and it only continues to operate with money that should have been paid to investors.
The directors are totally clueless and cannot run a property company. (It seems to be the same modus operandi we saw with state capture)
It is a pity that only Moneyweb covers developments. Myburgh’s face must be on the front page of every newspaper and website in the country.

Please keep at it Ryk, otherwise I can see this one disappearing into the sunset with all the state capture folks.

End of comments.




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