In­vestors are des­per­ate


The Citizen (KZN) - - BUSINESS - Ryk van Niek­erk Money­web No pay­ment Non-pay­ment of in­ter­est Re­sponse

Pay­ments to sup­port­ers of le­gal ac­tion against Zephan and Ortho­touch were uni­lat­er­ally ter­mi­nated.

Ortho­touch – the failed Highveld Syn­di­ca­tion com­pa­nies’ res­cue ve­hi­cle has al­legedly not paid in­ter­est for sev­eral months to po­ten­tially thou­sands of in­vestors who haven’t dis­tanced them­selves from Zephan and Ortho­touch’s le­gal chal­lenges.

This is de­spite the sub­mis­sion of a for­mal ap­pli­ca­tion for a court or­der to com­pel Ortho­touch and Zephan, a com­pany owned by prop­erty mogul Nic Ge­or­giou and un­der­writer of the scheme, to pay the in­ter­est due to in­vestors in terms of the court-sanc­tioned sec­tion 155 Scheme of Ar­range­ment.

Derek Co­hen, re­ceiver of the Ortho­touch scheme, re­signed in July, al­though it must still be court sanc­tioned. Pre­vi­ously, he said he had no al­ter­na­tive but to turn to the courts af­ter Zephan didn’t pay in­ter­est to about 4 500 in­vestors in July, con­tra­ven­ing the scheme’s con­di­tions.

Ap­prox­i­mately 11 000 in­vestors are en­ti­tled to monthly in­ter­est pay­ments. Over the past few days, Money­web re­ceived over 100 e-mails and mes­sages from des­per­ate Ortho­touch in­vestors com­plain­ing about the non-pay­ment of in­ter­est.

Al­most all the in­vestors claimed they hadn’t re­ceived their monthly in­ter­est pay­ments since July. Sev­eral e-mails de­scribed how des­ti­tute some in­vestors have be­come since the in­ter­est pay­ments stopped. One claimed she had to sell her house, her last re­main­ing as­set, to sur­vive.

The non-pay­ment of in­ter­est started in June when in­ter­est pay­ments to sup­port­ers of the le­gal ac­tions from ad­vo­cate Louis Bolt and the Highveld Syn­di­ca­tion Ac­tion Group (HSAG) were uni­lat­er­ally ter­mi­nated. It was deemed un­fair to in­vestors who did not sup­port the le­gal chal­lenges to con­tinue in­ter­est pay­ments to in­vestors who do.

The HSAG is seek­ing cer­ti­fi­ca­tion for a class ac­tion and the rescis­sion of the scheme, while Bolt ap­plied for Zephan’s liq­ui­da­tion.

This liq­ui­da­tion ap­pli­ca­tion fol­lows sev­eral de­fault judg­ments, which com­pelled Zephan to re­pay the cap­i­tal and in­ter­est to in­di­vid­ual in­vestors in terms of their orig­i­nal Highveld Syn­di­ca­tion in­vest­ment con­tracts. Zephan and Ortho­touch con­tend the le­gal costs to con­test th­ese chal­lenges, and Zephan’s pos­si­ble liq­ui­da­tion, may cause the whole scheme to col­lapse.

Zephan ter­mi­nated in­ter­est pay­ments in June when it in­formed in­vestors that they needed to com­plete a form to in­di­cate whether they sup­ported any of th­ese le­gal chal­lenges or not. It said sup­port­ers would no longer re­ceive in­ter­est pay­ments. In­ter­est pay­ments to in­vestors who didn’t com­plete the form were also with­held. In­ter­est pay­ments were later made for June, but Money­web isn’t aware of pay­ments for July, Au­gust, Septem­ber or Oc­to­ber.

Money­web sent ques­tions to Ge­or­giou and his lawyer Mario Kyr­i­a­cou, but no re­sponse was forth­com­ing.

Jac­ques Theron of Theron and Part­ners, HSAG’s le­gal rep­re­sen­ta­tive, said the Zephan liq­ui­da­tion ap­pli­ca­tion makes it “very prob­a­ble some HS in­vestors are not be­ing paid due to the Zephan’s fi­nan­cial dif­fi­cul­ties. If it is liq­ui­dated, a com­plete seizure of pay­ments can be ex­pected.

“If Ortho­touch does not hon­our the Scheme of Ar­range­ment, other pos­si­bil­i­ties, such as the liq­ui­da­tion of Ortho­touch, will be con­sid­ered by the HSAG.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.