Estate sequestrated
GEORGIOU: PROBE TO FOLLOW TO SEE IF ALL ASSETS WERE INCLUDED Investigation found late property magnate ‘managed to conceal assets’.
The High Court in Pretoria has placed the estate of the late Nic Georgiou in provisional sequestration. If the order is made final, it may trigger an investigation into what happened to the R4.6 billion that thousands of investors invested in the former Highveld Syndication Schemes.
Sydney Poole, one of the investors, launched the application for the provisional sequestration of Georgiou’s estate in 2021. Georgiou had failed to repay R4.4 million due to him after the high court ruled in his favour in 2018.
The case stems from Poole’s investment in the Highveld Syndication 22 scheme (HS22), which included a buyback agreement, in which Georgiou undertook to repurchase Poole’s shares five years later at double the original selling price. HS22 and seven other Highveld Syndications went into business rescue in September 2011.
A Section 155 Scheme of Arrangement later tasked Orthotouch to take ownership of all the HS properties and repay investors. Unfortunately, Orthotouch was placed in business rescue in November 2019.
The respondent in the matter was Luke Saffy, the executor of Georgiou’s estate.
In his judgment, Judge HF Jacobs stated: “The papers in these proceedings show a multitude of claims against the estate of the late Mr Georgiou, the companies he owned and/or managed and the [N Georgiou] Trust.
“The claims against the estate are substantial in monetary value and the dividend a sequestration order may achieve is argued to be rather small or insignificant at this stage but proper inquiry by the trustee of the estate beyond what appears at face value to be available to creditors might paint a different picture.
“To date hereof such an inquiry has not taken place at all.
“In the exercise of my discretion in this connection, I am of the view that prima facie, the requirements for a sequestration order have been satisfied...” The order means the assets in the estate will also be placed in the hands of the Master of the High Court.
Assets
A vital aspect of the case is whether assets of significance remain in the estate.
Georgiou claimed in an affidavit in defence of a sequestration application that he owned no significant assets, a claim Advocate Louis Bolt, who acted on behalf of Poole, rejected.
The Master of the High Court, now the custodian of the assets, may order such an investigation into whether all assets are accounted for in the estate.
Bolt stated his investigation revealed Georgiou owned significant assets and that he “managed to conceal any number of assets in various ways”.
“It was argued that it is highly improbable that anyone who was the ‘guiding mind’ behind the substantial property developments in which Georgiou was involved and who, by his own account, has a long history of successful investment in property development should have … nothing or [so] little to show in his estate,” Bolt says.
A hearing into why a final sequestration should not be granted will be heard in April.
The respondents’ attorneys did not respond to our questions.
Improbable anyone who has a history of successful investment should have nothing