Picture: THINKSTOCK
Picture: THINKSTOCK
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Property group Fortress has established a "special ad hoc sub-committee" which will consider the request of several institutional investors for a forensic investigation into the company.

Last month, SA’s largest investment managers wrote a letter to the boards of the Resilient group of companies, demanding an independent forensic investigation led by a "top-four accounting firm" into the companies.

The Resilient group of companies, which includes Fortress, Nepi Rockcastle and Greenbay Properties, are at the centre of the collapse of the listed property sector this year. These companies’ shares have been sold off in 2018, costing investors more than R120bn.

At one point they made up 40% of the South African listed property sector and many index trackers and fund mangers were exposed to them.

The Financial Sector Conduct Authority (FSCA) has been investigating the companies since March. Its market abuse department’s investigation is two-fold: it is studying possible insider trading and price manipulation in the companies’ shares; and false and misleading reporting by the group of companies. But the asset managers who signed the letter, which include the Public Investment Corporation (PIC), Investec, Allan Gray and Coronation, have said the investigation is taking too long.

Fortress said in a statement that the sub-committee had a mandate to consider the issues raised in the letter and to engage with the authors with a view to addressing their concerns, as well as those of other shareholders.

Former head of property finance at Nedbank, Robin Lockhart-Ross, will chair the sub-committee alongside Djurk Venter and Bongiwe Njobe, all independent non-executive directors at Fortress.

Fortress said no limitation has been placed on the scope of work or the historical timeline, which the sub-committee may investigate.

andersona@businesslive.co.za

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