Sharemax saviour’s woes

2010-10-19 00:00

PROPERTY syndicator Realcor Holdings, which claims to have a solution for Sharemax investors, has been silent about its own problems.

Moneyweb can reveal that one of Realcor’s prospectuses has fallen foul of the Banks Act.

The Registrar of Banks recently appointed auditing firm PricewaterhouseCoopers as statutory managers to oversee the return of funds to investors. This is similar to what happened at Sharemax, and what may still happen at other syndication companies that have sold public debentures.

The appointment of PWC at Realcor was confirmed by Deputy Registrar of Banks Michael Blackbeard, although he declined to comment on how much money was involved.

He said there was no media release or notice issued in this regard.

Realcor is best known for the nearly complete Blaauwberg Beach Hotel that is being developed in Cape Town. For some time, it has been selling shares to investors via financial advisers in an effort to fund the hotel.

Realcor MD Deonette de Ridder said Realcor’s initial prospectus contains a 12-month debenture, which was deemed to contravene the Banks Act. She said that 93% of the investments in this first prospectus have already been “dealt with” and “Realcor is now in the process of settlement of the balance”.

Moneyweb understands that many of the affected investors have converted their debentures into shares.

Said De Ridder: “All further prospectuses have been amended to incorporate a debenture of five years instead of 12 months.”

Meanwhile Sharemax recently confirmed that its chairperson, Andre Brand, signed an agreement with Realcor. Sharemax said that the Realcor offer, and other similar approaches, will be evaluated in seeking a solution to ensure that the interests of the Sharemax investors and the stipulations of the Banks Act are met.

“ ... the offers can only be accepted by the shareholders of the relevant entities,” said Sharemax in a statement. De Ridder noted that the Blaauwberg Beach Hotel structure is completed. “The furniture and IT remain to be installed.” — Moneyweb.

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