More than 800 investors of embattled property development company Realcor, 50 financial advisors and two investment brokers have approached the Western cape High Court to set aside the sale of the unfinished building in Blaauwberg, that was meant to be a five-star Radisson Blu hotel. Picture Leon Lestrade More than 800 investors of embattled property development company Realcor, 50 financial advisors and two investment brokers have approached the Western cape High Court to set aside the sale of the unfinished building in Blaauwberg, that was meant to be a five-star Radisson Blu hotel. Picture Leon Lestrade
Cape Town - The liquidator appointed to take control of the affairs of Midnight Storm Investments 386 (MSI) - which owns an unfinished Blaauwberg hotel intended to be a five-star luxury venue - has vehemently denied claims that the hotel was sold for far less than it is worth.
The claims were contained in an application, reported on by Weekend Argus on August 10, under the headline “Investors want R50m city hotel sale set aside”. Liquidator Stephen Gore says the application had already been withdrawn by the applicants at the time the article was published.
The aborted application had been brought in the Western Cape High Court to set aside the R50.5 million sale by public auction of the unfinished hotel building.
Attorneys acting for the MSI liquidators also say the application was replete with inaccuracies.
Deon Pienaar, one of the applicants, said the application had been withdrawn on a “technical basis”, and would be resubmitted.
Interviewed about the saga, Gore and his legal representatives said MSI, which forms part of the Realcor group of companies, had been liquidated on October 28, 2011, but that a number of court applications and appeals delayed the sale of the unfinished hotel until May this year.
Gore said it had cost the liquidators more than R2m to protect and secure the property pending its sale. According to Gore, they had given two brokers - Pienaar and Willem Hendrik van Zyl, who claimed in papers that they represent hundreds of investors and dozens of financial advisers - an opportunity to introduce a purchaser.
But the purchaser never materialised. Pienaar and Van Zyl then tried to interdict the auction.
The unfinished building was sold, with authorisation from the High Court, for R50.5m plus VAT at a well-advertised and well-attended public auction, according to Gore, who said the building had deteriorated over time.
It was estimated that some R120m would have to be spent to complete the property.
Gore said the liquidators of the various Realcor Group Companies were investigating the prospects of recovering up to R90m in commission paid to brokers who raised more than R600m of investor funds for the group of companies.
They were also looking for missing assets and considering civil and criminal claims against a number of people.
In a separate matter, the Financial Advisory and Intermediary Services ombudsman ordered a broker to repay an investor in Realcor his entire investment.
Consequently, Pienaar and Van Zyl have filed another application, this time against PricewaterhouseCoopers (PWC) and three former PWC employees.
In the application they ask the court to direct that they, as investment brokers, should not be held liable for the losses made by their clients while PWC was at Realcor. PWC and the others are opposing the application.
Pienaar says their application against the liquidators would be “resubmitted” within three weeks.
Weekend Argus