Nedbank boss to testify over ‘property scam’ Certain BOE employees accused of masterminding a repossession scam
NEDBANK chief executive Mike Brown has been subpoenaed to give evidence today at a confidential Section 417/418 inquiry in terms of the Companies Act.
Brown is one of three people who have been called to testify on the liquidation and subsequent deregistration of Waterkloofspruit Projects, the developer of a 211-stand upmarket residential project known as Waterkloof Boulevard in Waterkloof Ridge in Pretoria in 2001. The others are Arno Cronje and Enver Motala.
Brown was subpoenaed because he was previously head of Board of Executors bank (BOE), which was taken over by Nedbank in 2002.
It is alleged that BOE placed Waterkloofspruit Projects under a winding up order because it could not pay its debts and conspired and colluded with liquidators Cronje and Motala, as well as Sterling Auctioneers to acquire, during the liquidation sale, 137 stands in Waterkloof Boulevard for a total of R100 000.
This amounted to an average price of R730 a stand.
There are claims that there was a R20 million offer for the stands prior to the liquidation sale and the real market value of the individual properties, of which 16 had semi completed houses, had a collective market value of more than R40m.
Bond holder
BOE’s property finance division was the bond holder over certain properties in the Waterkloof Boulevard project.
Esme Arendse, the division executive of group communications at Nedbank, confirmed Brown had been subpoenaed to give evidence at the inquiry. Arendse added that neither Nedbank nor Brown had any comment about the inquiry “but deny the allegations made”.
Advocate Charles Stewart will preside over the inquiry, which will take place in Pretoria years after a court battle launched by Hillcrest Village and the CMT Trust against several different entities, including Nedcor’s BOE Private Bank and the liquidators of Waterkloofspruit Projects in 2006.
Dennis Perreira da Silva, the owner of Randpark Ridge Extension 60 Development, and Ralph Rojahn, the owner of Dotcom Trading 635 have also been subpoenaed to give evidence at the inquiry today.
The two companies, with BOE’s agreement, developed the properties in Waterkloof Boulevard after they were acquired during the liquidation sale. Waterkloofspruit Projects was previously wholly-owned by former listed property company Gilboa Properties, which in May 2001 ceded all its rights, title and interest and all claims it had in Waterkloofspruit Projects in respect of the Waterkloof Boulevard project to the CMT Trust.
Hillcrest Village, which is now in liquidation, was the owner of the Gilboa Building.
The liquidators of Hillcrest Village were granted an order in the Pretoria High Court in 2010 to convene an inquiry in De la Pierre also alleged BOE and certain of its employees masterminded a property repossession scam that was responsible for the demise of Waterkloofspruit Projects and Gilboa Properties, which in turn caused the damages suffered by Hillcrest Village and the CMT Trust.
In 2008 Judge
Moses Mavundla, among other things, declared the dissolution of Waterkloofspruit Projects void, and found “overwhelming evidence” of fraud or collusion.
Nedbank was granted leave to appeal this judgment, which was upheld by the Supreme Court of Appeal in 2009.
However, appeal court Judge Piet Streicher said the offer of R100 000 by BOE should not have been accepted by the liquidators, and in doing so, the liquidators did not act in the best interests of Waterkloofspruit Projects.
Hillcrest Village and the CMT Trust in 2007 lodged a claim for more than R500 million in damages from Nedbank, liquidators Cronje and Motala, the master of the High Court and various other businessmen and close corporations.
The Section 417 now being held is part of the process of this damages claim.