New twist in Pembury farce
Lifestyle group CEO slaps company chair with a R44m lawsuit after a secret recording of their conversation airs on
ý The circus that is Pembury Lifestyle Group (PLG) took another farcical turn last week when founder and CEO Andrew Mclachlan filed a R44m defamation claim against its chair, Martin Nel, who promptly quit.
Pembury, which owns 11 schools and a number of retirement homes, has become an emblem of the JSE’S reluctance to protect investors by cracking down on errant behaviour.
The JSE finally suspended Pembury from trading last week — but only after it broke numerous deadlines to file its accounts for the year to December. But it means that 1,800 investors, who ploughed R200m into the company when it listed in 2018, are unable to sell their shares. With the board now in chaos and directors resigning almost every week, it would seem their odds of recovering most of that money seem dim.
Nel was appointed only last October to fix the company after a series of governance disasters, a stream of resignations (including its auditors) and allegations that Pembury was running unregistered schools and selling life rights to the
It seems the purpose of the lawsuit may be simply to intimidate Nel
gramme aired, the share price was also at 8c. And less than two months before, it was lower, at 5c.
Mclachlan this week told the FM his lawyers know what they’re doing. “The case is: what was the intention of the recording and the motives of Nel? The disseminating of the recording to various individuals without knowledge or permission [of] myself is where a major lawsuit is occurring,” he says.
He said he would also sue Carte Blanche and Pembury director Bheki Sibiya, who represents the company’s 15% shareholder, the
Black Management Forum investment company.
Last week, the JSE told the
FM it would investigate the claims of share manipulation implied in the recording. This week, however, Mclachlan told the FM: “The JSE and Arbor Capital confirmed no share manipulation took place in Pembury Lifestyle Group trading.” (Arbor Capital used to be Pembury’s sponsor until March 3, when it resigned with immediate effect.)
However, the JSE’S Shaun
Davies says Mclachlan’s claim isn’t true. “We have not yet reached any conclusions in our review of trading in Pembury shares as to whether we need to refer any trading activity to the FSCA [the Financial Sector Conduct Authority] for further investigation, and we have certainly not found that no share price manipulation has taken place.”
Nonetheless, it seems Nel has had enough. On Wednesday, he resigned at Pembury’s board meeting after he was unable to table a motion for Mclachlan’s suspension to be discussed.
“They wouldn’t let me table that. So I said look, I can’t take this any more, and I resigned. But I did ask them to minute the fact that I’m willing to work with the Hawks or whoever will bring charges so justice is done,” he says.
The real issue is that they took R200m of old people’s money. They don’t care who they trample on