Delta Property Fund on a Reit to nowhere
The key problem with real estate investment trusts such as Delta is a lack of openness in the valuation of their property portfolios. Dubious practices could wipe R2bn off Delta’s value, annoying shareholders who should have called for greater transparency before the bubble burst
The suspected fraud uncovered at Delta Property Fund has reignited questions around how, when and by whom the direct property portfolios of real estate investment trusts (Reits) are valued.
The board at Delta, which focuses on renting offices to the government, shocked the sector last week when it announced that a forensic report by auditor Mazars had uncovered procurement irregularities, fraud relating to unethical dealings and nondisclosure of related-party transactions totalling R46m. This is Mazars’ second probe into Delta’s affairs this year...