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KleuterZone Ventures was used to distribute and issue share certificates for schools that had not yet been established.
The provisional liquidator of KleuterZone Operations is 'convinced' that KZ Ventures is insolvent and cannot meet its obligations to creditors, investors or shareholders. Picture: AdobeStock
A second KleuterZone company has been put into provisional liquidation.
On Friday, the Western Cape High Court granted an order for the provisional winding up of KleuterZone (KZ) Ventures, a management company of the controversial KleuterZone franchise.
Rikus Hartman, who applied for the provisional liquidation of KZ Ventures and is also the appointed liquidator for KleuterZone Operations, noted in his founding affidavit that the main goal and reason for registering KZ Ventures as a company was to allocate and issue share certificates to investors who were not yet allocated to a certain school or entity where a school was still in the process of being registered or built.
The KleuterZone franchise, whose founder Anthonie Bougas has fled to Bangkok, Thailand, operated under a complex structure with various trade names and subsidiaries, including KleuterZone Operations and KZ Ventures.
Bougas allegedly made payments into the bank account of KZ Ventures totalling R880 000.
ALSO READ: Are KleuterZone’s promised returns of up to 62.4% too good to be true?
According to the affidavit, KZ Ventures acted as a “waiting room” until an investor was allocated to a specific school for further investments.
The KleuterZone Group, in general, operates multiple subsidiaries, yet its financial dealings remain opaque and difficult to trace.
There are numerous concerns regarding the financial stability of KZ Ventures amid allegations that the entity served to utilise new investor funds to repay earlier investors – “thereby maintaining the illusion of profitability and success”, Hartman notes.
Based on the information he received – including inflated returns promised to investors, misappropriation of funds, and opacity regarding the use of investment funds – Hartman states he is “convinced” that KZ Ventures is insolvent and cannot meet its obligations to its creditors, investors, or shareholders.
ALSO READ: ‘Schools were recklessly managed’ – former KleuterZone employee
An investor who contacted Moneyweb in December last year stated that the funds he invested were temporarily parked in KZ Ventures. This came about after he complained to Bougas that his investment in two individual schools did not yield any dividends. Bougas told him that his investment was moved to KZ Ventures, which offered exceptionally high returns until a suitable school with similar high returns was found.
For a brief period, the investor’s dividends increased tenfold until he decided to withdraw his total investment in January.
KleuterZone Ventures was registered in April 2024, with Bougas listed as its sole director.
ALSO READ: Regulators have once again failed South Africans – KleuterZone exposed them all
Hartman argues in his affidavit that despite promises of high returns, KZ Ventures failed to demonstrate any substantial growth or progress in the sector.
“The company did not develop a sustainable business model that could generate the income needed to repay investors or reinvest in its operations.”
Some investors were promised that their investments would be placed in a certain entity, only to realise later that it still does not exist.
“Further investigation reveals that there is no legitimate business activity that could be identified as a source of income for KZ Ventures. Instead of investing in tangible assets or generating revenue from legitimate educational projects, it appears that investor funds were used to perpetuate a fraudulent cycle … [mirroring] the operation of Ponzi schemes where the illusion of profitability is maintained by continuously attracting new investors to sustain payouts.”
In the affidavit, Hartman requests, in addition to the liquidation, that the court order a forensic audit to determine if the sale of shares was conducted in good faith and if fraudulent activities, including the misrepresentation of financial information, were involved.
ALSO READ: Court stops Bougas brother from selling R2.7m Audi
Hartman’s application to sequestrate Bougas’s bank accounts will be heard on Tuesday in the Pretoria High Court.
On Friday, the Western Cape High Court also granted an urgent interdict, preventing John Bougas (Anthonie’s brother) from selling his luxury vehicle.
John Bougas allegedly took his Audi E-Tron GT 350 KW to Audi Centre Claremont in Cape Town to sell it. The dealership flagged the transaction as suspicious due to the liquidation proceedings and did not proceed with payment.
Moneyweb began investigating KleuterZone after being approached by concerned investors who were promised returns of up to 72% in some cases from what was perceived to be a national franchise of nursery schools.
Over a few weeks, it became clear that the schools could not generate enough income to meet the exorbitant returns promised to investors.
The liquidator has since established that Bougas used the various business accounts of KleuterZone management and operation companies to transfer funds into his bank accounts and cover expenses unrelated to the operation of schools, such as buying vehicles, financing overseas trips, and gambling expenses.
KleuterZone Operations was the first management company to be placed in provisional liquidation (on 18 March).
In the court order granted for the provisional liquidation of KZ Ventures, Judge Matthew Francis ruled that the company and all interested parties must provide reasons or show cause on Friday, 16 May, as to why KZ Ventures should not be finally liquidated.
This article was republished from Moneyweb. Read the original here.
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