Nova Property Group’s creditors will draw comfort from the JSE’s stringent listings requirements, which will force transparency on the group’s affairs and personal disclosures by directors before a listing is approved.
The JSE would scrutinise the credentials of each of Nova’s directors and demand full disclosure on each of the properties in the group’s portfolio before authorising a listing, Andre Visser, GM of issuer regulation at the JSE, said on Friday. The JSE had not yet received an application to list from Nova.
Nova, which arose out of the failed Sharemax scheme, hopes to list its property portfolio before the end of 2017, converting 20,000 debenture holders — most of them elderly — into shareholders.
This would capitalise their claims of R1.68bn against Nova and give them a collective 34.45% stake in the listed entity. Many debenture holders, some of whom stopped receiving interest payments as far back as 2013, are desperate to exit their investments and will favour a listing, which should improve liquidity.
But Deon Pienaar, a financial adviser who advised clients to invest about R3m into Sharemax, has asked who would buy shares in a company that was "so contaminated". Pienaar has brought an urgent interdict to stop the proposed listing, which Nova is opposing.
"We believe he has absolutely no case. We are in a very serious process of listing, which we cannot stop every time someone brings something to court," Nova MD Dominique Haese said.
In court papers, Pienaar said Nova had defaulted on repayment arrangements to debenture holders and was now "attempting to salvage their failed plans by listing the property portfolio on the JSE".
Pienaar’s real bugbear, however, is the Reserve Bank, which he says did not follow the rule of law when setting up the scheme of arrangement in 2011, which saw Nova take over Sharemax’s property assets and convert Sharemax investors into debenture holders in Nova. Pienaar,an applicant in four different property syndication cases, has brought a separate case against the Reserve Bank.
It has been set down for hearing in January.
Property syndications "were the best investments there were" and had been shut down by the Bank after lobbying by commercial banks, which disliked how successful they were, he said.