Investors in the historic Sharemax investment scheme may want to find out for themselves who owns the companies that own and manage the original Sharemax properties.
Moneyweb’s efforts over the past 16 months to get clarity on the ownership structures were delayed again when the North Gauteng High Court (NGHC) granted Nova Properties, Frontier Asset Management & Investments and Centro Property Group leave to appeal a recent interlocutory ruling at the end of November.
This means that before our main case for access to the share registers can be heard, we first have to argue a technical point at the Supreme Court of Appeal (SCA) in Bloemfontein.
Only when this point is decided, sometime next year, will Moneyweb be able to continue with the main case for access in the NGHC. This could mean another 18-month delay.
The process started back in July 2013 when Moneyweb journalist Julius Cobbett applied to access the shareholder registers of these companies in terms of Section 26(2) of the Companies Act. This provision in the Act, in theory at least, is aimed at making it easy for any member of the public to inspect the shareholder register of any company.
The three companies vociferously denied Cobbett and Moneyweb access. The directors of the companies justified their refusal by stating that Moneyweb and Cobbett were waging a vendetta against the directors and entities and that Moneyweb and Cobbett would use the information in the shareholder registers to further defame and vilify the parties, particularly the directors.
Moneyweb has always denied that such a vendetta exists.
What is this case all about?
This may be an opportune time for investors to take a step back and ask: What is this case all about? Is it about Moneyweb desperately trying to get its hands on the shareholder registers of the companies and then to sensationally report on their contents? Or are the directors fighting to keep the registers secret from everyone, including investors?
Is this case merely a clash between Moneyweb and individual directors of Nova or is there something else at play?
Why are the ownership structures important?
Moneyweb believes it is critical that the shareholder structure of these companies is made public, as this information is key to investors’ interests.
Nova is the company that owns all the various properties that used to belong to Sharemax investors. With the announcement of the scheme of arrangement in 2011, the executive directors of the erstwhile Sharemax group, Dominique Haese, Rudi Badenhorst and Dirk Koekemoer held 43.2% of Nova’s issued shares.
Moneyweb wants to see whether this shareholding has changed since 2011 and who owns the balance of the issued shares. Moneyweb also wants to know what Haese, Badenhorst and Koekemoer paid for their shares to acquire such a large slice of a company with assets exceeding R2 billion.
The ownership structure of Frontier and Centro is also important. Frontier provides a range of administrative services to Nova and Centro manages the property portfolio on behalf of Nova.
Walk through the front door
The ironic reality is that although Moneyweb may wait three years to get a final answer from the courts, an investor may access the shareholder registers on any weekday morning.
Investors can do this through the Companies Act. According to Section 26 (1) of the Act any “person who holds or has a beneficial interest in any securities issued by a profit company” may inspect the securities register. This obviously refers to investors.
Section 26(2) is applicable when a person does not have such a “beneficial interest”, such as Moneyweb and any other non-investor. In this case the person has the right to gain access if he or she pays a prescribed fee, currently set at R100.
The Act allows for two ways to access the security registers. The first is for access at the company’s registered address. In theory, anyone can walk through the company’s front door, approach reception and ask to see the particular document.
The second way is to complete the particular form – the company then has 14 days to make the shareholder register available to the applicant. It was this method that Cobbett used.
The Act also clearly states that access cannot be denied, and that if any reasonable request is denied, it constitutes an offence.
For ease of reference, here are the registered addresses of the three companies:
Nova Property: 105 Club Avenue, Waterkloof Heights, Pretoria. (It is the same building as the old Sharemax head office)
Frontier Asset Management: 341, 24th Avenue, Villiera, Pretoria; and
Centro Property: Shop 10, Waterkloof Shopping Centre, corner Garsfontein Road and January Masilela Drive, Waterkloof Glen, Pretoria.
I believe it is critical that the information as to who constitutes the majority shareholders is placed in the public domain. This is the reason why Moneyweb has spent a significant amount of money in legal fees to access these shareholder registers. But we will only be able to publish the shareholder registers when the protracted legal wrangle is over – and this may take a few more years.
But curious investors have unique rights, and they cannot be accused, as we are, of waging a vendetta. I am sure several shareholders would want to take a peek at the shareholder registers to see what the fuss is all about.