V&A deal unethical, court hears

ACCUSATIONS of unethical business practice have emerged in a civil court case involving the R9.7 billion sale of the V&A Waterfront.

The legal action was brought against Growthpoint by Andre van Heerden, who was appointed by the court to recover the fee of two businessmen. The two – retired businessman Maurice Shawzin and property developer Neill Bernstein (by way of his company Devland Holdings) – formed a consultancy partnership to help Growthpoint buy a stake in the Waterfront in 2011.

Growthpoint is defending the action.

In the Western Cape High Court yesterday, advocate Brian Pincus, SC, said in his opening address that Shawzin and Bernstein had put time and effort into the deal. At no time before May 9, 2010, had Growthpoint shown any signs of repudiation, or advised them to stop their efforts.

Pincus claimed that at a pre-arbitration meeting in December 2011, there had been conduct that “we would describe as unethical business practice”. What was further regrettable, he told the court, was that Growthpoint’s chairman, Francois Marais, had conducted himself in this way with Bernstein, whose relationship with Shawzin had since soured.

While Pincus accepted that Marais was not involved with everyday dealings with Shawzin, he had had knowledge of Shawzin’s claim.

He said that at the meeting there had been a discussion between Marais and Bernstein about Bernstein being given an ongoing ability to do business with Growthpoint if he got Shawzin “off their backs”. Once Shawzin’s claim had been extinguished, they could then proceed with a “friendly arbitration”.

Although Marais’s advocates have not yet verbally responded to these allegations in court, Marais denied collusion in an affidavit.

It is Van Heerden’s version that an oral agreement had been reached that if Growthpoint acquired a substantial portion of the Waterfront, it would negotiate the fee amount with the partnership. He is asking the court to order that the negotiations take place.

The hearing continues today.