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KleuterZone owner Anthonie Bougas. The preschool franchise says it is conducting an audit into the inconsistencies identified in the share certificates. Picture: Moneyweb
KleuterZone, a national preschool franchise promising investors returns of up to 62.4%, has issued share certificates to investors that reflect investments in companies that do not exist.
In response, KleuterZone said this might be due to clerical errors or “typing mistakes” in the manual issuance of share certificates.
The franchise claims to have around 120 schools in its portfolio, in which 1 300 investors have collectively invested approximately R500 million.
Moneyweb has eight shareholder certificates, four of which indicate investments in companies not registered with the Companies and Intellectual Property Commission (CIPC), where all companies need to be registered.
Furthermore, all but one of the registration numbers listed on these certificates do not match the companies they claim to represent. Instead, the numbers correspond to KleuterZone’s holding and operational companies or other businesses that own separate schools.
The certificates in Moneyweb’s possession all date back to August and October 2024, but five of the companies named on the share certificates still do not appear to have been registered some six months later.
In response to Moneyweb’s questions, KleuterZone indicated that it was conducting its own audit into the inconsistencies that Moneyweb has identified. It indicates that there had been a practice of issuing certificates by hand and that typing mistakes may have been made at times. The company said it is treating the issue as a matter of priority.
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Anthonie Bougas, KleuterZone’s owner and acting CEO, has confirmed to Moneyweb and in marketing material that each school operates as an independent legal entity and that investors buy shares directly in these companies.
However, Moneyweb’s investigation into CIPC company records revealed several discrepancies:
In response to these issues and Moneyweb’s questions, Bougas’s attorney, Frederick van Zyl of Van Zyl Scheepers Attorneys, issued a legal letter marked “Strictly not for publication and confidential”. However, Moneyweb did not consent to confidentiality regarding these discrepancies and is publishing Van Zyl’s statement.
Van Zyl attributed the discrepancies to clerical errors in the manual issuance of share certificates.
“As part of our client’s internal investigation, it also raised concerns regarding the process by which share certificates were issued by hand, and that practice’s risk of allowing inconsistency. Our client is in the process of conducting its own audit into the inconsistencies pointed out, which it believes will be addressed by its migration of all share registries and certificates to the InfoDocs platform. This is an ongoing process requiring shareholder participation and is enjoying our client’s highest priority. From your e-mail on even date, it appears that typing mistakes crept in at times. Be assured that all the schools exist, and that any mistakes identified will be remedied.”
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Moneyweb’s investigation also sought to determine whether KleuterZone’s schools generate sufficient cash and profit to support the 38.4% to 62.4% returns promised to investors.
Despite repeated requests, KleuterZone refused to provide Moneyweb with historical financial statements for any school, stating that private companies are not obligated to disclose such information.
Van Zyl confirmed this position in the latest statement: “Neither our client or any of the schools under its management are required to have audited or reviewed financial statements. Most of the schools are only now reaching the end of their first financial year, and an external accounting firm already received instructions to prepare financial statements for all the entities under our client’s control. These will however not be completed before the end of March.”
However, before the latest interaction between Van Zyl and Moneyweb, Bougas sent management accounts for KleuterZone Doornpoort covering the nine-month period between March 2024 and December 2024 as proof that the schools generate the cash flow to pay investors.
Moneyweb analysed these accounts and submitted 11 detailed questions regarding solvency, liquidity, and potential reckless trading concerns to Bougas on 29 January.
KleuterZone did not respond to the questions.
However, in his final correspondence, Van Zyl made a general statement. “A solvency and liquidity test is conducted before a dividend is declared. When the school meets the solvency and liquidity requirements at the time, the dividend is approved. Our client has a revenue model based on consistent and predictable income streams. Future cash flows were considered when determining dividend payments. Additionally, alternative financial measures, including cost management and operational adjustments, are in place to ensure financial stability.”
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Moneyweb estimated that to meet the marketed returns, each of KleuterZone’s 120 schools would need to generate an annual free cash flow of between R175 million and R284 million, or between R121 000 and R197 000 per school per month.
* Moneyweb invites any KleuterZone investor to contact us. All information will remain strictly confidential. Email Ryk van Niekerk or Liesl Peyper.
This article was republished from Moneyweb. Read the original here.
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