Investors in a fix

2015-01-12 00:00

SOME 144 investors in Pietermaritzburg may be affected in a R3,6 billion nationwide property syndication scheme that has gone bad.

Investor and independent broker Jimmy Fergusson said on Friday a meeting would be held in the city on Wednesday, January 14 for Pickvest/Orthotouch property syndication investors to discuss the proposed class action against the company.

A group of investors in the Pickvest-promoted companies on Tuesday started proceedings to be able to institute a class action against the scheme at the North Gauteng High Court, he said.

Last year was the first time the court had allowed a class action to be instituted. That case involved the alleged mismanagement of Transnet Pension Fund and over 65 000 former Transnet employees.

The Pickvest/Orthotouch property scheme had attracted over 18 000 investors around the country, and had appeared successful between 2006 and 2011, said Ferguson.

Things appeared to go “pear-shaped” in 2011 when its management approached banks for a R200 million loan to be granted to a shelf company, Orthotouch, that had been acquired and had never traded.

Management subsequently blamed investor “detractors” as the main reason why banks had not provided the R200 million loan.

A statement on the Orthotouch website alleged the detractors were “a number of persons … working in concert and others individually, but in most instances operating covertly, to bring about the liquidation of the HS Companies, to enable the detractors to lay their hands on the assets of the HS Companies and to generate vast possible income to themselves …”

Fergusson said the commercial, retail and industrial properties that the investors had invested in were protected under business rescue proceedings.

According to news reports, investors were told in an investment meeting in Pretoria in November that the structure of Pickvest/Orthotouch was no longer viable, as rental income on the properties was insufficient to make interest payments to investors.

Pickvest/Orthotouch directors were not available for comment on Friday.

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