www.carian.co.za/post/the-missing-r-414-694-327
The new post deals with the debentures related to the twelve properties sold off by Nova prior to the CIPC’s August 2022 prohibition on disposal of any further assets
The relevant properties are:
– 148 Leeuwpoort Street
– 14De Marionette Centre
– Shopmakers Village
– Benoni Hyper
– Athlone Park Shopping Centre
– Liberty Mall (Amogela Mall)
– Oxford Gate
– Parkside Plaza
– Rivonia Square
– Nelspruit Hyper
– Dainfern Shopping Centre
– Whale Rock Residential Estate
Click here for further information on these properties:
<www.ndcag.co.za/go/20250930-1?fbclid=IwZXh0bgNhZW0CMTAAYnJpZBExSFls TU54MXZ6NDIxRWJyMQEeAvi170yIHvwCfBi7IX2tGBj2tuRmd3xxyAlenv8sHfs2sYZa6dVopwon JQ0_aem_JSecLrIeguImB0xVY1oSig> www.ndcag.co.za/go/20250930-1
He has posted this information as a “worst case” scenario for the relevant Debenture Holders revealing information about a situation that is a direct result of Nova Chairman Myburgh and the Board’s actions that have not been in the best interests of the affected Debenture Holders
He is not looking to be sensationalist with this information but providing the stark truth – information THAT SHOULD HAVE BEEN DISCLOSED BY NOVA LONG AGO OR, FAR BETTER, SHOULD NEVER HAVE RESULTED IN THE FIRST PLACE. See lower down on Tromp’s inclusion of the arbitrary step taken by Nova in 2019 per which they started absorbing property sale proceeds into operating capital
He informs that, with the sale proceeds having been absorbed into the operating capital of the company, that money doesn’t exist any more
And, with the transfer of the sold properties into the names of the buyers, there are no specific assets in the company’s books that underly, or back, the above debenture values, and thus the funds that should have been set aside to repay the debentures, are gone!
This is not a new fact but, in the absence of the disclosure (but see below) and any explanation, the appropriate explanation seems to be that the retention of the property sale proceeds (rather than using same to repay debentures) was Nova’s escape hatch and way to get out of their (frequently stated) funding problems by throwing the Debenture Holders under the bus and deliberately misusing debenture repayment funds to keep the company afloat to suit the Chairman and Board’s own agenda
What should also be noted is the content in Tromp’s post at point 3: Funds utilized within the Group
Funds diversion to keep the company afloat started, it could be said, with the 2013 sale of the Rivonia Square property. In our previous post, we included the only – but far from sufficiently explanatory – communications by Nova on the sale of this property
The point to be clear about on the diversion of sale proceeds funds for all of the already sold properties is that it was a totally unilateral action by Nova – no consultation, no explanation of, and motivation for withholding the funds and no agreement for the funds retention and re-deployment from the affected Debenture Holders
Further, Nova only informed the Debenture Holders of the sale proceeds retentions in September 2019 although nine of the subject properties had been sold off well before then from 2013 to 2018 with no Debenture repayments or appropriate communications over some six years
So, for these six years, information on the retention actions and non-payment of the relevant debentures was kept hidden and the fact that the disappearance of any of the sold properties from the next year’s AFS and could have triggered enquiries, does not qualify as appropriate communication which would have been after the event and dissatisfactory anyway
But this is actually yet another nail in the coffin regarding the ongoing allegations that Nova is insolvent and is in fact, trading in an insolvent state, which firstly, is evidence of reckless behaviour on the part of the Chairman and the Board but is also in contravention of the requirements of the Companies Act in which it is stated:
Reckless trading prohibited
22. (1) A company must not-
(a) carry on its business recklessly, with gross negligence, with intent to defraud
any person or for any fraudulent purpose; or
(b) trade under insolvent circumstances
.
The company is already “under Notification” by CIPC in that the Commission has issued a Notification to Nova calling on them to respond to the formal Companies Act CoR135.1 Complaint that Tromp has submitted to them and in which he states that, in his opinion Nova is indeed guilty of reckless behaviour and insolvent
Currently Nova has until 20th October to respond to CIPC and in the meantime, the Companies Tribunal hearing to address Nova’s frequent failure to meet its obligations under the Act and also other failures, especially the failure to repay the remaining Debentures, is on hold
Some contributing factors to justify the insolvency of the company:
– Huge tax debt to Sars and overdue VAT payments (R 62 million – excluding penalties for late payment – and R 16 nett million respectively)
– The Beneficio loan which is now a liability in the books to the tune of 67 million (with court judgment against the company and appeals unsuccessful)
– The Quatro Group – R 12.3 million owed for failure to pay for property hygiene services. Court order to Nova to pay
– The Bright Light Solar solar heating default involving some R 100 million and an application for liquidation of the company and, of course;
– The total value of the as yet unpaid debentures which reflect in the ’24 AFS as R 2.27 billion which includes the above 370 million value of the “missing millions” unpaid debentures
The above might not be entirely accurate or show the full pictures but no matter, what they do indicate or better, confirm is that they are serious red flags which only reinforce existing doubts about the company’s status and the performance of the Chairman and Board
Nova will not admit that the company is insolvent but it really is time to have that fact acknowledged publicly and especially, confirmed by CIPC!