Sharemax: AfriForum challenges NPA’s refusal to protect shareholders’ interests

In a letter sent to Adv. Shamila Batohi, National Director of Public Prosecutions, today AfriForum requested that the decision by the National Prosecuting Authority (NPA) over an asset preservation order be taken on review. The NPA has decided not to freeze assets of the Nova Property Group, which for all practical reasons is an extension of Sharemax. AfriForum is of the opinion that these assets were acquired with the proceeds of crime. One of the consequences of an asset preservation order is that no trading of properties is allowed until the court has granted a final order that it may be sold or returned to its rightful owners.

Adv. Rodney de Kock, Deputy National Director of Public Prosecutions, informed AfriForum that the NPA hasn’t applied for asset preservation which will serve to protect shareholders against further losses.

This follows after AfriForum’s Private Prosecution Unit, led by Adv. Gerrie Nel, announced on 22 June 2020 that the unit has compiled the preservation order and sent it to the NPA’s asset seizure unit. The NPA can seize certain properties in terms of a court order, yet no such application has been brought in this case.

In its application, the civil rights organisation alleges that the properties in question were acquired with the proceeds of illegal activities, including money laundering and fraud as contained in the Prevention of Organised Crime Act no. 121 of 1998 (POCA), as well as the Banks Act no. 94 of 1990. The properties were instrumental in the commission of crimes against the shareholders, and Nova has been in control of these properties since 2012. The company was however established through proceeds of illegal deposits accepted by Sharemax from the public.

“Adv. De Kock’s decision not to bring an application for the asset preservation order needs to be reviewed as a matter of urgency. Moreover, his decision can be regarded as irrational and in conflict with the facts at hand and with the law. According to our interpretation of the law, Nova’s assets were acquired through the proceeds of a crime, which means it is in conflict with POCA. The NPA has the necessary power and is also obliged to protect the rights of investors,” says Adv. Nel

According to Adv. Nel it seems as if the NPA is not taking this matter seriously, as no prosecution has yet been instituted. “The delay in obtaining a preservation order could lead to further losses for shareholders due to the fact that the Nova Board can sell or distribute assets at the expense of shareholders. AfriForum will therefore continue to put pressure on the NPA to ensure that justice is done.”