Hanna Barry
2 minute read
28 Nov 2014
7:00 pm

Picvest class action gathers steam

Hanna Barry

More than 6 000 investors in the Highveld Syndications (HS) companies have confirmed their support for a class action against the Pickvest-promoted property schemes, attorney Jacques Theron said.

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Theron’s law firm, Theron & Partners, is bringing the action application on behalf of 18 000-odd investors, mainly pensioners, who invested in the HS companies. Court papers list 22 respondents in the matter, but the application seeks relief against 16 of those, Theron says.

Nic Georgiou

Among the respondents against which relief is sought is Nic Georgiou, MD of Orthotouch, which bought properties in the HS companies on the grounds it would pay the syndication companies a return of 6% a year, increasing by 25 basis points each year. At the end of five years, Orthotouch would pay the syndication companies the full purchase price of R4.6 billion.

Just two respondents are opposing the class action: Heinrich Pieter Moller (director and company secretary of the relevant Highveld companies) and Orthotouch itself.

Eleven respondents have confirmed their receipt of the application, including Georgiou, who has not yet indicated an intention to oppose. Georgiou could not be reached for comment.

On January 6, the court will rule on those respondents who did not oppose the application for certification. “This order may include a certification in respect of those respondents or the court may postpone the matter to be adjudicated upon simultaneously with the opposing respondents,” Theron said.

In all likelihood, the bulk of respondents would oppose the application, Theron said.

The court must first determine if this is a genuine class action and will do so once it has received the relevant affidavits from applicants and respondents and considered the merits.

If the class is certified and the class action goes ahead, investors will be given an opportunity to opt out of the action – ie be excluded from the proceedings and ultimate findings of the action, as well as rewards that might be made. If investors do not opt out they are automatically included in proceedings.

Theron said he was not privy to the investors’ votes regarding the proposed schemes of arrangement recently proposed by Orthotouch.

Orthotouch proposals

Investors have been asked to choose between three alternatives to fix the Pickvest mess – including putting more money in – after Orthotouch failed to meet interest-payment obligations.

“Many investors indicated they were not aware of the class action and they want to withdraw their votes,” Theron noted.

Business-rescue practitioner for the HS Companies Hans Klopper did not respond to requests for comment.