10 000 set to lose savings
Director kills himself as company goes under
UP TO 10 000 people, many of them pensioners, stand to lose their savings and investments in Wellington-based King Financial Holdings which has lost R600 million of investors’ money.
A Financial Services Board report said the money was lost, and the company’s actions had been “irresponsible to say the least”.
Yesterday was a tough day for the King family. Not only was the application for the liquidation of their company, King Holdings, heard in the Cape High Court, but they also buried their brother, Paul King, 49, whose death this week has been attributed to suicide as a result of the company’s financial troubles.
It has been reported his body was found in a gas-filled car.
Lee-Ann Millin, a retired woman who invested R2.3m with King Holdings, said on three occasions dividends had not been paid on her investment.
She met the company just before a provisional liquidation order was granted last month, with the intention of withdrawing her money, which she said now amounted to R3m. She was not paid and she has not received dividends for the past two months.
“A lot of people invested in King, around 10 000, but when you think about how many people are in each family, up to 40 000 people could actually be affected. We have no idea where we stand and I understand that one of the directors committed suicide this week. I’m sorry for that, but a lot of investors probably also want to commit suicide now, too. It’s just too terrible.”
The company was placed under provisional liquidation last month following an investigation by the Financial Services Board.
The board’s report stated that some investors had been persuaded to take out additional mortgages to buy more shares in the company, which the FSB declared “commercially and technically insolvent”, leaving investors in “financial dire straits”.
The action in the High Court yesterday would have allowed the company to argue why the provisional liquidation order, brought by EY Zera and five others, should not be made permanent.
Judge Andre Blignault, however, postponed the application until next week.
Weekend Argus has learned that the application was postponed because of an intervening application filed early yesterday stating that a possible buyer had been found for the company.
Earlier in the day, several smaller subsidiaries of the main holding company, King Holdings, were also placed under provisional liquidation.
Up to 10 000 people stand to lose their savings and investments in the company, many of them pensioners.
Dr Paul King, who qualified as a veterinarian, was yesterday described by his brother Adrian as “highly intelligent” and a “good guy”. King said his brother had taken the failure of the company very seriously.
“He was very successful. The business drama and the fact that he started losing control was just too much for him, he couldn’t handle it.”
King said his brother had attempted suicide two weeks earlier and had been in a clinic since then, but was released last weekend. He was found dead in his car near the family’s farm on Monday.
He was cremated yesterday and the family held a private service in their home. King is survived by his wife and four children.
Adrian King said they had not opposed the liquidations of the smaller companies, Edrei Property Investments Alto, Kingvest and RZT Zelpy, brought in the High Court yesterday. The Edrei liquidation request was brought by Nedbank, while liquidator Rynette Peters brought the other applications. Provisional liquidations have already been made by Nedbank for an amount of R140m and by construction group WBHO for R30m.
Adrian King confirmed yesterday that they had been approached by prospective buyers for the holding company, King Holdings, which formerly traded as Biz Africa. Despite the troubles, there was still “good value” there.
The King Group was established by Adrian King in 1996, at first offering advice on insurance products. In 1997, Stephen King joined the company and Paul King joined in 2002.
The company started offering investments in commercial and residential properties to their clients. Their first share offering was made in 2004, and in 2008, when the group started experiencing cash flow problems, they invited their shareholders in subsidiary companies to convert their shares to shares in King Holdings.
The company has more than 90 smaller subsidiaries, which the FSB said in their report were indistinguishable from one another.
“The King group of companies all operated from the same premises and were run by the same individuals. The King brothers stated that they treated all the companies as one.”
In some cases, clients were told they could earn up to 30% interest annually on their investments. The FSB report states that investors were told their investments were secured.
However, they could find no evidence of secured bonds during their investigation.
The report stated that clients’ money had been “misappropriated” and that they had been misled as to the safety of their investments.
Other irregularities indicated in the report were that shares had been sold without a prospectus, and before the company was made public. In addition, more shares were sold than was previously indicated to investors and the company could not produce audited financial reports.
ADRIAN KING: Opposed the liquidations of the smaller firms.