SA tycoons taste bank’s wrath

2010-09-26 13:17

One of South Africa’s most prominent business families has had to part with R39?million to banking giant Absa after the failure of a proposed ­Gauteng shopping mall.

Property moguls, the Theodosiou brothers – Antony (Tony), Dimitri and Sedrick – who also own management rights to the Kyalami race track, lost the fortune on the doomed Mogale City Mall.

The brothers failed to service Absa’s R32-million loan, taken out in December 2007, which is now at R39?million including interest.

Mogale City Mall did not dispute that it owed Absa R39?million.

Another company in the brothers’ Universal Property ­Professionals (UPP) stable, ­Immobili Retail Investments, owes Absa R47?million.

But UPP has threatened to bring a R360-million counter-claim against Absa; money it says it would have made had the bank not withdrawn its support for the ­construction of the mall, which was never built.

Tony (56), Dimitri (55) and ­Sedrick Theodosiou (62) have achieved notoriety for building shopping malls without the ­required council permission.

In 2007, a high court judge threatened to jail the brothers if Immobili continued building a mall in Lonehill.

The City of Johannesburg was granted two court orders, which the brothers ignored, to stop ­Immobili from extending the mall without council approval.

They escaped with three-month suspended sentences and R20?000 fines.

Investigative magazine Nose­week reported three years ago that UPP-owned Bel Air Mall, Agora Shopping Centre, Comaro Crossing Value Mart and a Ballito, KwaZulu-Natal, centre were all built without council approval, environmental impact assessments and consultation with residents.

The Johannesburg-born brothers have been involved in retail and commercial property development and management for more than three decades. At the helm of UPP are Tony and Dimitri as joint managing ­directors.

In separate court proceedings, Absa said Immobili owes it more than R1?billion, which is said to be increasing by millions of rands per month. Bel Air Mall is under liquidation. Other UPP companies – Mall on 14th, Before The Wind Investments, and Universal Residential Holdings – also have loan ­agreements with Absa.

The banking giant acquired 30% of the doomed Mogale City Mall from Immobili and owns a similar stake in Mall on 14th.

Earlier this month, the North Gauteng High Court granted Absa permission to liquidate Mogale City Mall.

In its application, Absa said Mogale City Mall had lost 75% of its share capital, was unable to service its debt and was factually and ­commercially insolvent.

UPP argued that Absa had breached its fiduciary duties and had colluded with one of its competitors, Retail Africa Wingspan Investments.

In October 2008, Absa acquired Wingspan, which owned various malls across the country.

UPP claimed that Absa ­“deviously undermined” their relationship by acquiring Wingspan.

The agreement between UPP and the bank ended in 2008, before Absa merged with Wingspan.

Both Absa and UPP failed to ­respond to questions this week.

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