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Thousands face ruin after King crash

Posted On Tuesday, 08 September 2009 02:00 Published by
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Farm towns across the Western Cape are reaping a bitter harvest of bankruptcy, despair and suicide following the collapse of a R680million property investment company.

By Anton Ferreira

Farm towns across the Western Cape are reaping a bitter harvest of bankruptcy, despair and suicide following the collapse of a R680million property investment company.

Now a top fraud detective is investigating the operations of the King Group, which developed King’s Mall in Gonubie and was liquidated in the High Court in Cape Town last month, following a scathing report by the Financial Services Board.

Many of an estimated 10000 investors – among them pensioners, farmers and business people – face financial ruin after mortgaging their homes and sinking their life savings into the doomed group.

“A lot of people’s lives have come to an end,” said one investor, Lee- Ann Millin, of the Strand in Cape Town, and Carolina Dagevos- Millin, who put in R2.3 million together two years ago.

The company was run by the three King brothers – Adrian, Stephen and Paul – from the bucolic winelands community of Wellington, where they were once the toast of the town.

Paul committed suicide last month as the group, which comprised 95 companies, collapsed. He was 49.

In its eight years of operation, the group aggressively marketed its investment products in Wellington and towns further afield, such as Piketberg, Citrusdal, Porterville, Riebeek Kasteel and Eendekuil, promising returns of up to 30percent a year.

Millin said she had invested in King products on the advice of her insurance broker and a Wellington-based attorney. “I went to my attorney, who knows the King boys very well, and I said to him, ‘Are these guys sound?’

“Everyone thought they were as sound as a pound. No one had anything bad to say about them – ‘They’re great for Wellington, they’ve got so many people employed’ – everyone thought they were the bees’ knees.

“But they have been fat cats, and that’s just sad. They gained a lot of trust, but they’ve abused it completely.”

Millin accused the King brothers and their families of living the high life while their companies were haemorrhaging money.

“They’ve taken overseas trips and they’ve had a wild life and all the kids had lovely cars, and the wives had lovely cars and dressed to the nines.”

Estate agent Johan Truter said people hit by the King collapse were having to sell houses in Saldanha Bay at far below market value.

“It’s vulture time,” he said.

The FSB report into the King Group found, among other things, that it had “blatantly” violated several provisions of the Companies Act, misappropriated client investments, lied to investors and to the board and now could not pay its creditors.

But Adrian King told the Sunday Times last week that the report was unfair because the FSB had not given the company enough time to respond to its concerns.

“I know I haven’t taken anybody’s money,” he said, adding that he had nothing to fear from a police investigation. “I don’t have a guilty conscience.”

King, who lives on a wine and olive farm near Wellington, said his companies had suffered “normal” cash-flow problems and would have recovered in time.

“Everything’s still there. Every cent is physically lying in property, and the property is there, it hasn’t vanished.”

King, who has been sequestrated, said Paul had killed himself because he was distraught at having been forced to relinquish control of the group.

“He had always been a control freak, as simple as that .”

Agents and brokers still loyal to the King Group tried to persuade investors to oppose the liquidation of the companies, holding out the promise of massive foreign investment.

But Judge Dennis Davis, who granted the liquidation order, dismissed these promises as “Alice in Wonderland” claims.

Source: Daily Dispatch

Publisher: I-Net Bridge
Source: I-Net Bridge
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