Nedbank plans to halt both inquiry and subpoena
NEDBANK is trying to avoid a probe into its involvement into the liquidation of a property company and wants to prevent its chief executive Mike Brown from having to give evidence at the inquiry.
So the banking group had indicated that it intended to proceed with a high court application to set aside a confidential section 417/418 Companies Act inquiry and halt the subpoena issued to Brown to take the stand to face allegations.
Brown was subpoenaed but failed to appear on Monday at the inquiry launched by the liquidators of Hillcrest Village.
“In line with the confidential nature of the inquiry, neither Nedbank nor Mike (Brown) has any further comment about the matter, but deny the allegations of wrongdoing by BOE/Nedbank,” Esme Arendse, the divisional executive of group communications at Nedbank, said yesterday.
Liquidation sale
It is alleged BOE conspired and colluded with liquidators Arno Cronje and Enver Motala and Sterling Auctioneers to acquire, during the liquidation sale, 137 stands in Waterkloof Boulevard for a total of R100 000, which amounted to an average price of R730 a stand.
It was claimed that there was an offer of R20 million for the stands prior to the liquidation sale and the real collective market value of the properties was more than R40m.
Waterkloofspruit Projects was the developer of a 211stand upmarket residential project known as Waterkloof Boulevard in Waterkloof Ridge in Pretoria.
It was liquidated in 2001 and subsequently deregistered.
Arendse said that the commissioner of the inquiry was advised on Monday that Nedbank would proceed with an application to set aside both the inquiry and the subpoena.
“On this basis, Nedbank was excused from the inquiry. We have been given an opportunity until July 17, 2015 to launch the application and we are proceeding accordingly,” she said.
Arendse said the matter dated back to BOE in 2001 with the liquidation of a property development, Waterkloofspruit Projects (WKP), where BOE suffered a loss of about R7m after WKP defaulted on its loan.
She said Hillcrest stood surety for the debts of WKP, hence their involvement in the matter, and Brown was the head of BOE Property Finance at the time. BOE was taken over by Nedbank in 2002.
2008 judgment
Edward de la Pierre, the former chairman of Gilboa Properties and former director of Hillcrest Village and trustee of the CMT Trust, has accused BOE through the actions of certain of its employees of colluding with liquidators Cronje and Motala.
De la Pierre has also alleged that 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.
Judge NM Mavundla in a 2008 judgment 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 R500m in damages from Nedbank, liquidators Cronje and Motala, the master of the high court and various other businessmen and close corporations.
De la Pierre said the inquiry would continue next week.
He said there were another possible 12 witnesses that might be subpoenaed to give evidence at the inquiry.