Ryk van Niekerk
2 minute read
5 Nov 2014
7:00 pm

Investors want Pickvest, Orthotouch class action

Ryk van Niekerk

A group of investors in the Pickvest-promoted property syndication companies have applied for leave to institute a class action against the property scheme at the North Gauteng High Court.

Image courtesy of Stock.xchng

In court papers filed last week Sharon Ann Vlok, an investor and signatory to the founding affidavit, alleges the intended claims are aimed at various directors and individuals related to the investment schemes in their personal capacities for “their fraudulent and/or reckless conduct which resulted in the investors losing much of their investments, if not everything”.

The group of investors asks the court to allow an individual class action on behalf of investors against the Highveld Syndications 19, 20, 21 and 22.

The class action suit will allow the 18 600 investors, if they so choose, to collectively sue the companies and individuals associated with the investment scheme.

The application follows after the group of investors held several information sessions with other investors countrywide. The court papers do not reveal how many investors are backing the application.

Vlok’s affidavit lists 22 respondents, including Nic Georgiou, several other members of the Georgiou family, Zephan Properties, Hendrik Myburgh, Bosman & Visser, Willem Steyn, Hans Klopper and Orthotouch.

In the affidavit Vlok alleges Georgiou, a property billionaire and MD of Orthotouch, controlled the scheme and the directors of the various syndication companies did not act in the best interest of investors.

Vlok also states Klopper, the business rescue practitioner, compromised himself as he accepted an appointment as a director of Orthotouch, the company he should have stood up to in order to act in the best interest of investors.

In court next year

Following the filing of the application, the respondents will need to file answering affidavits within 30 days of receiving the documents. If the parties oppose the application, the case will only be heard next year.

This application for leave to institute a class action was brought two weeks before investors will vote on a proposed scheme of arrangement on November 12.

This proposed scheme of arrangement comes after Orthotouch, which in terms of the business rescue process owns the syndicated properties, failed to meet its interest-payment obligations to investors.

In her affidavit, Vlok strongly opposes the proposed scheme of arrangement.

She alleges Orthotouch has breached its obligations in terms of the business rescue process and the proposed scheme of arrangement would result in investors signing their rights away and having less security than they have had before.

It is uncertain how this application for leave to bring a class action will affect, if at all, the voting on the proposed scheme of arrangement.

Georgiou didn’t respond to e-mails requesting comment and Klopper did not want to comment.