Dear Editor

Dereliction of fiduciary duties

Further to the municipal property undervaluation debate: the reasons why commercial property owners don’t object to low municipal values are obvious, e.g. they pay less in rates. But one would expect that listed property funds, especially, have a fiduciary obligation to their shareholders to ensure that the municipal property values of the properties in their funds are reflected correctly at market value, in accordance with the principal of willing buyer/willing seller, as required by the Municipal Property Rates Act.

There should be no reason other than wilful ignorance of the Act by such owners and their advisors and it could surely be deemed a misrepresentation to their shareholders as to what their actual property values are – and their rates expenses should be.

Yes, we all know that property rates  are passed on to the tenants and deemed part of building operating costs. And that increasing rentals based on the correct municipal values could cause widespread unhappiness. [Surely no more unhappiness than increased rates cause individual owners? – Ed.]

We also understand that any property valuation reflects the opinion of the valuer, but if based on poor and incorrect information, the valuation would be poor and incorrect.

 It’s one thing doing mass municipal valuations – commonly used and accepted as regards residential properties – but the valuation of commercial, retail and industrial property i a much more specialised process that requires appropriate skills and experience from valuers. In Tshwane for example, there are three A-grade office buildings located in close proximity to each other in the Menlyn and surrounding node with a combined gross lettable area of ±70,630m². These buildings were completed between 2010 and 2012, prior to the general valuation roll of 2013. The combined municipal value of these three office buildings reflected on the roll since 2013 is R180m. However, their  combined market value at the time of completion was in excess of R1.2 billion. The estimated under-recovered rates sum exceeds R86m over the past three years.

These are just three examples of office buildings undervalued in the Tshwane Metro. According to my private database which comprises ± 3.67 million square metres of A- and B-grade office space throughout the Tshwane Metro, there are several hundred more commercial/business properties that are undervalued in the Tshwane Metro.

I suggest landlords of commercial/business properties collectively approach the Metro to lower the current rates tariff applicable to commercial and business premises, which will hopefully prevent the undervaluing of these by the municipal valuers.

It is imperative that landlords meet timeously with the Tshwane Metro regarding the proposed rates tariff applicable to commercial/business properties that will be presented in the forthcoming budget.

Gerrie Minnaar
Professional  Valuer
Engel & Völkers Commercial

Exceedingly slow justice

At last Gary Porritt and Sue Bennett of Tigon infamy are standing trial, more than a decade after their arrest. Given the disgraceful ineptitude of our judicial system in prosecuting white collar crime (e.g. Fidentia and J Arthur Brown), I thought I would never see the day that these two would be brought to court.

An investment adviser and former stockbroker describes the Tigon debacle as a grave and sorry indictment of the regulatory competence of the JSE, the Financial Services Board and other watchdog authorities.

Tigon was never anything but a house of cards and it was clear many years before it all collapsed that the price of its thinly-traded share was being ramped.

He can remember the Financial Mail revealing in the nineties that a Hong Kong-based associate company was being used to pump up the share price, and the fact that this company was nominally an associate and not a subsidiary meant that its activities and results did not have to be included in full detail in Tigon’s consolidated financial statements.

This was all before the arrival of Milne and the PSC Guaranteed Growth Fund, the active promotion of which involved investors being duped into believing the fund held a diversified portfolio of shares, when in reality their money was only used to ramp Tigon’s share price. One of these “dupees” was my late husband, who was attracted by the supposed guaranteed return and invested for the benefit of our two daughters. It was all lost.

This could all have been stopped before maximum damage was done, had there been a proactive investigation by the JSE and other regulatory authorities into the FM story. But in all probability no one in these bodies even read it. Perish the thought that monitoring the financial media (and of course Noseweek) for early warnings of criminal activity should be an obligatory part of their function. No way, that sounds too much like work.

Louise Hellberg

Cape Town

The JSE is a company out to maximise the profits and salaries of its executives; investigating the suspect activities of its clients is costly and bad for business. What about the FSB? Dare we ask? They are two sides of the same coin: a society that has lost its sense of what is right. Ed.

How must Mashile feel now?

Bheki Mashile, your correspondent from the Mpumalanga boondocks and lifelong ANC supporter come what may, clearly wrote his piece about the local government elections (nose203) before all the outcomes were known. Hence, after bemoaning the losses of Nelson Mandela Bay and Tshwane, he also berates his beloved party for “barely holding on to our economic hub of Jozi”.

Oh dear, how he must feel now, knowing that the Jozi council has also fallen to the nasties of the opposition. And that his favourite person, the anti-BEE Herman Mashaba, is the new mayor. Doubtless Mashile will pen a piece on these disgraceful shenanigans.

William Bowler
Hout Bay

No, he’s simply pretending that Barberton is in Swaziland. Ed.

Please Sir, more of just desserts

An avid reader of your magazine, I especially look forward to the graphically written and expertly researched exposés of the dastardly and all-too-often illegal activities that permeate South African life. However, to my disappointment, I rarely read of the comeuppance and just desserts that should be meted out to the miscreants you have exposed.

Please consider devoting a new section to such a topic; we want to know the fate of those you have exposed.

Stephen Jeffries
Green Point

• I agree with Colin Bosman: of late there have been very few juicy scandals – social, in the arts, divorces, etc – in Noseweek; the sort of things readers like me enjoy. As (the late) reader Manfred Shevel wrote, there is too much one-sided corporate, banking and political emphasis in your articles.

I do enjoy Harold Strachan, but otherwise there is very little humour in your pages. I like the Books page and Anne Susskind, with her take on Australia. It’s possible that you find it too expensive to commission columnists and journalists.

Most women do the magazine-buying and not all of us want to read about food, décor and fashion. You’ve never been afraid of being sued, so what about spicing up your magazine with some social satire and scandals?

Joan Schrauwen

It's been unfunny times for a while, so who doesn't long for a laugh or a bit of skinner for light relief? Point taken. Trouble is, we get as many demands for the opposite.Ed.

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