Is im­por­tant in­for­ma­tion not be­ing dis­closed?

Finweek English Edition - - FRONT PAGE - VIC DE KLERK vicd@fin­

THE DE­VEL­OPER of the large new shop­ping cen­tre called The Villa, east of Pre­to­ria, that’s be­ing writ­ten about so much these days ap­par­ently seems to be try­ing to sell an in­ter­est of at least 30% in the devel­op­ment. The pro­moter of the cen­tre – Share­max, which has al­ready col­lected around R1,5bn from the pub­lic buy­ing into the cen­tre – is in­volved in sev­eral me­dia ad­ver­tise­ments try­ing to quench the flames aris­ing from the dis­sat­is­fac­tion of the SA Re­serve Bank, which feels it’s vi­o­lat­ing leg­is­la­tion gov­ern­ing de­posit-tak­ing or­gan­i­sa­tions.

To pla­cate the Re­serve Bank, Share­max has mean­while changed its busi­ness model slightly: in­stead of linked units con­sist­ing of a microscopic share and a deben­ture, it’s now of­fer­ing the pub­lic a share with no par value at a large pre­mium.

While the in­vest­ing pub­lic is await­ing the out­come of the dis­pute be­tween the Re­serve Bank and Share­max, Nicolas Con­stanti­nou sent a memo (printed here) about sell­ing The Villa to a prop­erty fund listed in Lux­em­bourg. We’re not men­tion­ing the name of the fund.

Con­stanti­nou gives the sell­ing price in the or­der of R45 000/sq m, which sounds a bit ex­pen­sive for SA. The 180 ten­ants are al­most all in­ter­na­tional busi­nesses that don’t mind mak­ing a loss in SA, be­cause their other prof­its will make up for the rental, Con­stanti­nou says. Fi­nally, he claims other de­vel­op­ers, specif­i­cally in Pre­to­ria, don’t have the courage to tackle such projects.

How­ever, the At­ter­bury Group is busy with a very large devel­op­ment near the new Lyn­nwood off-ramp, a far bet­ter site than The Villa on the Del­mas Road. Slightly north of that, the Sa­sol pen­sion fund is busy en­larg­ing one of its great win­ners – the Kolon­nade cen­tre, near the Mon­tana area – for the umpteenth time.

In his memo, Con­stanti­nou says the money for the pur­chase could sim­ply be de­posited di­rectly into Capi­col’s bank ac­count – not into that of Share­max (the pro­moter).

In its ex­ten­sive ad­ver­tis­ing cam­paign over the past two weeks – and also in its new prospec­tuses in the name of The Villa Re­tail Park Hold­ings 2 Ltd – Share- max makes no men­tion of Con­stanti­nou’s man­date to sell a 30% in­ter­est in The Villa to other par­ties. Does Share­max not know about this, or is it im­por­tant in­for­ma­tion not be­ing dis­closed to in­vestors?

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