From: Beneficio Developments (Pty) Ltd v Tarentaal Centre Investments (Pty) Ltd and Another (22258/20) [2023] ZAGPPHC 324 (23 May 2023) in the High Court of South Africa, Gauteng Division, Pretoria
The “Another” is The Village Mall Investments (Pty) Limited, also in Nelspruit, and the two companies are the defendants referred to in the above quotation. The debentures linked to these two properties have already been repaid so their value lies in their possible sale to raise funds for debenture repayment had they not been pledged as security for the loan and now the likelihood is that they will be sold to enable repayment of the Beneficio loan
See the full text of the court record and the quote in Clause 64.4 on page 27 in the court record accessible here:
www.saflii.org/za/cases/ZAGPPHC/2023/324.pdf
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Ryk van Niekerk has published on Nova’s failure to get Supreme Court of Appeal OK to appeal the previous judgments handed down by lower courts
www.moneyweb.co.za/news/companies-and-deals/nova-suffers-big-blow-in -1-a-week-loan-dispute/
or
Some take-outs from this?
* Having lost out in all of the previous court actions and now faced with the obligation to pay Beneficio the full amount due (or face the loss of the two properties put up as security), does Nova have the capability? How much has five years of litigation cost that is, ultimately, MONEY NOT WELL SPENT ? * The most damning is: “What was incorrectly recorded as a ‘receivable’ of R19.7 million has now been revealed to be a payable of at least R67 million, an understatement of liabilities by R86 million” ????!
* Is this a case of cooking the books and how will CIPC view it?
* Will a re-statement of the ’24 AFS to exclude the 19.7 receivable, include the full amount payable to Beneficio – including accrued interest – be required and will it confirm the insolvent status of the company?
* What is the impact on the – as yet unpublished and late again – ’25 AFS? How will the Beneficio loan be shown in the AFS now? How will the auditors play it this time around? We wonder if Nova will have to “doctor” other figures to balance the books?
* If the books have been cooked regarding the Beneficio loan, was this the first time? Or, how many other instances of “creative accounting:” have occurred in the past?
Read Debenture Trustee JP Tromp’s paper on the Beneficio loan for a more in-depth picture of the fiasco at: