Lawsuit aims at ‘wrong Cadiz entity’
STELLAR Capital Partners, which owns 47% of Cadiz financial services group, said legal action instituted by industrial group Hudaco Industries to recoup “secret profits” of R180m and a R312m tax settlement with the South African Revenue Service has targeted the wrong Cadiz business.
Stellar said in a statement yesterday the action against Cadiz Asset Management was misdirected as it was a different legal entity with a different company registration number to the business it recently acquired.
But Hudaco yesterday strongly rebutted Stellar’s claim. It said the investment mandate put in place in 2007 that related to its court action was signed by Cadiz Asset Management, trading as Cadiz Specialised Asset Management.
“That is the company against which Hudaco is proceeding. Hudaco is unaware of the company with the registration number 1953/001254/07 referred to (by Stellar),” Clifford Amoils, Hudaco Industries financial director, said.
Hudaco had also instituted legal proceedings against, among others, certain former directors and other entities in the Cadiz Holdings group, which is a Stellar investee company.
Stellar said the Cadiz group of companies that were named in the Hudaco action had advised Stellar that they “deny any and all claims made or advanced in the action against them”.
Said Stellar: “The claim has been handed over to Cadiz’s insurers and the action will be vigorously defended.”
Stellar’s stock fell from 315c last week — before Hudaco’s stock exchange announcements — to about 256c yesterday.
Yesterday, Anthony Clark, an analyst at Vunani Securities, characterised Hudaco’s action “a spurious and nebulous claim” and said he expected the stock to recover once Stellar had clarified its position.
“The reason for the (stock’s) fall is now clear — ‘news leakage’,” Mr Clark said. “I am perplexed what claim Hudaco has against … Cadiz Asset Management for an alleged event that occurred years before Stellar Capital even acquired the division of Cadiz Holdings. Are they to be held accountable in legal parlance ‘for the alleged sins of the father’?”