By Thabang Mokopanele

The board of embattled property syndicate Sharemax, which is operating under the directive of the Reserve Bank, has decided to "ring-fence" its related companies and the various rights and interests of the companies in a bid to protect the interests of investors.

Dawie Roodt, who was appointed last year as one of three directors to the boards of the 33 syndications of Sharemax, said ring-fencing entailed the legal walling off of certain assets or liabilities within companies.

The ring-fencing will protect the specific assets of companies within Sharemax from creditors who are struggling to get paid.

Mr Roodt said yesterday the move was aimed at addressing and rectifying any contraventions of the Banking Act.

The process of ring-fencing the companies under Sharemax would entail a formal proposal for the restructuring of the affairs of the companies, which would be presented to the high court, Mr Roodt said.

After the approval of the court, he said, the proposal would be put to all interested and affected parties for their approval.

"The board has already instructed a professional team to commence the process, which is expected to be ready to be presented to the court before the end of next month," Mr Roodt said.

The board expected the approval process and the proposal to become effective towards the end of March.

Mr Roodt said the board was committed to concluding the process as "expeditiously" as it possibly could.

"Since becoming functional, the board has been collecting and analysing information relating to the companies under its control. It is clear to the board that the relationships between the different companies and interested third parties are exceptionally complicated, with various potential external and internal claims and counter-claims," he said.

The actual status of the various rights, interests and obligations of the companies and interested parties were complex and, in certain instances, uncertain.

Investors in Sharemax’s most troubled syndication, The Villa Mall, an unfinished shopping centre east of Pretoria that has so far cost investors R1,5bn, may be asked to put more money in to save the development.

Mr Roodt said several proposals regarding the mall had been presented to the board, but the board felt none provided a comprehensive, workable solution.

Source: AFP