Seven thousand investors have now joined a class action group – the Highveld Syndication Action Group (HSAG), administered by attorneys Theron & Partners – on behalf of about 18 000 investors, mainly pensioners. The total invested was about R4.6 billion.
Two High Court applications seek to have class actions certified for syndicated companies HS 15 to 18 and HS 19 to 22. An application for HS 19 to 22 was issued in October 2014.
Theron & Partners expects an application to be issued in respect of HS 15 to 18 in the first half of this year.
Some of the individual class actions certified will depend on the High Court’s directive, says Marina Verdoes, of Theron & Partners.
Among the respondents is Nic Georgiou, MD of Orthotouch, which bought properties in the HS companies but failed to pay interest in terms of a scheme of arrangement settled in 2011.
A new scheme of arrangement was sanctioned in the South Gauteng High Court late last year, giving investors three alternatives to restructure the repayments.
But Theron & Partners says it is probing the validity of the court order and will issue an application in “the next week or two” to have the order revised or rescinded.
Helgard Hancke, an investor and coordinator of the HSAG, says investors are receiving less than 2% interest a month. “They [the 22 respondents] must … explain … what they’ve done with our money,” he says.
Hancke says an 84-year old widow invested R7 million, left by her late husband, but has had to sell her house and move in with her children. Others have committed suicide, he claims.
Investors must pay upfront or in instalments of R1 000 per claim (or HS syndication in which they are invested) to participate in the class action – which is “only a fraction of the total costs of the ensuing High Court matters”, Verdoes says.
“This [R1 000] cost per claim has been instituted in order to be reasonable to all investors and also to cover the costs of more than one court case. For example, an investor in HS 15, 17 and 19 will be a claimant in three High Court Cases,” Verdoes explains.
“All surplus funds will be returned to investors at the end of the matter,” he says.