Liquidator allsorts

The first skirmish between new liquidators and the purported buyer of a Lenasia mall has begun to play out in court as the ‘buyer’ tries to maintain his hold, despite having not yet paid a cent for it in 12 years.

A new set of liquidators appointed to wind up the business of a Gauteng shopping centre that went under 12 years ago, promptly cancelled the sale of the property so that they could take over management of the mall themselves. This prompted the prospective owner to rush to court to try to interdict them and block any management takeover while he is engaged in opposing the cancellation of the sale.

Yamani Properties 1015 (Pty) Ltd,  owner of the mall, was put into liquidation in 2008. But when, by the middle of last year – 11 years after being appointed – the initial two liquidators had still not filed a report of their administration with the Master of the High Court, a Yamani shareholder took them to court and got them dismissed.

The pair had also failed to file a liquidation and distribution account (nose242). By regulation this should have been done within six months of their appointment. They also missed numerous deadlines to file a liquidation and distribution account. However the Master’s Office had neither asked for reasons for this omission, nor reprimanded them for their non-compliance.

In the meantime, a prospective buyer, Pannicos Protopapas (better known as Panico Protopapa) has been left in possession of the shopping centre for almost ten years without having paid anything for it. Nor has he paid any rent for more than eight years. And, despite having collected rent, monthly, from all the tenants, none of it has been accounted for to the liquidators.

Pannicos Protopapas

Also implicated in this extraordinary legal fiasco is the state’s Asset Forfeiture Unit as well as Business Partners, an entity founded decades ago by the Rupert family to fund small-to-medium businesses.

The new liquidators are Alexander Starbuck of Lex Star Trustees and Jacolien Barnard of Barn Trust. They replaced Stephen Anticevich and Rina Stroh – who are challenging their removal. (A further court hearing is set for the end of May this year.)

The current shake-up is in sharp contrast to the liquidators’ predecessors, who were accused of “reckless neglect”.

The liquidating trustees’ key target has been Panico Protopapa and his companies PLJ Investments Property and Renovations – the prospective buyer of the mall – and Tupa Real Estate, which is Sheffield Plaza’s managing agent.

One of the first moves of the new liquidators was to write to PLJ’s attorneys in July last year, ro halt the sale agreed in 2009, which was never finalised due to Protopapa’s failure to meet the sale conditions.

Werner van Rensburg, the attorney who represents the new liquidators, wrote to Marco Martini, the attorney representing PLJ: “Our clients have concluded their investigations, from which it is evident that no sale agreement exists between the insolvent estate and your client.”

Martini replied denying the claim.  

Protopapa tells Noseweek: “I will fight to the end so that I get transfer of the property. I’ve told them emphatically that I’m not walking away from this transaction.”

However, he has a fight on his hands, as emails from 2015, 2016 and 2019 show that Business Partners, the original funder of the mall, tried to cancel the purchase agreement with PLJ and find a new buyer.

Starbuck and Barnard’s next move, on July 25 last year, was to ask all the Sheffield Plaza tenants to pay their rent into the liquidators’ bank account, rather than that of Tupa.

PLJ then applied to the South Gauteng High Court on 13 August to halt Starbuck and Barnard from interfering with both PLJ’s affairs at Sheffield Plaza and that of the tenants.

In an order dated August 15, Judge Windell interdicted Yamani, Starbuck and Barnard from con-
tacting tenants and occupants of Tupa’s properties as well as Tupa. In September the new liquidators gave notice of their intention to challenge the court interdict.

However, Noseweek has since learned that the two Yamani liquidators and PLJ have been in negotiations over a settlement that would see PLJ pay an agreed amount to acquire the company and be given terms to pay off outstanding occupational rent.

The Yamani liquidators have indicated to PLJ’s lawyers that they will accept a settlement purchase price of about R7m. PLJ has rejected that amount and is planning to propose an alternative price, according to sources close to the matter.

During an interview with Noseweek in November last year, Protopapa said he feared that once the news about Sheffield Plaza got out then “the repercussions for us is that we aren’t going to have funding”.

“I’m going to have trouble when your [Noseweek] article goes out. All the banks are going to call us.”

Protopapa said that PLJ went to five different financial institutions over the years to secure guarantees and bond finance for the Sheffield Plaza deal: Standard Bank; First National Bank; Chester Finance; Mercantile Bank; and now Nedbank.

“We have a small property investment company. We buy buildings that are generally in distress and in poor areas,” Protopapa said at his offices in Houghton.

Once the old liquidators had been removed, Yamani shareholder Dolly Naidoo applied to the North Gauteng High Court for an inquiry into the affairs of the company, in which she has a 40% stake. In June last year, Judge Mokose set up a commission of inquiry in terms of the Companies Act to probe the affairs of Yamani, with Cullinan magistrate Petro Engelbrecht appointed to run the inquiry.

Dolly Naidoo

“The inquiry looked into the mis-management of Yamani Properties and into what has happened to the rental, in the region of R25m [paid by the tenants throughout liquidation],” Naidoo said.

“It also looked at the role of Business Partners, the liquidators and the mishandling of the estate,” she said.

Danie Frey, who is Business Partners’ senior legal manager, said in reply to questions that the management of the liquidation was, by law, the responsibility of the liquidators appointed by the Master of the High Court. “It follows therefore that Business Partners Limited cannot be held responsible or accountable for the perceived ‘mismanagement’ of the liquidation process,” Frey said.

The inquiry was another cost that the liquidated Yamani estate had to cover, he added.

Naidoo said that the full transcription of the inquiry ran into hundreds of pages. Some of the witnesses at the probe had contradicted what they had said in public, she added.

Business Partners, has a 40% stake in Yamani and a R2.6m claim against the estate.

The magistrate (Engelbrecht) would issue a ruling soon following completion of the inquiry, Naidoo said.

Another battle at Yamani is over the appointment of Starbuck as one of the new liquidators. Naidoo alleges that Starbuck has a bias toward representing Business Partners in handling the Yamani matter.

Van Rensburg said his clients, Starbuck and Barnard, were “somewhat perplexed by the allegation…We can only state that the statement is factually incorrect.”

Naidoo also alleges that Starbuck was trying to cover up Business Partners’ involvement in the Yamani problems.

Frey said: “Such conduct was…firstly not possible and secondly, is pure fiction, which we therefore categorically deny.”

Insolvency lawyer Sybrand Tintinger, who represents Naidoo, claims that Starbuck had concluded that Business Partner’s claim against Yamani was in order, without taking into account the alleged collusive dealings between Anticevich, Frey, and Protopapa.

In response, attorney Van Rensburg says his clients, Starbuck and Barnard, had “no unlawful deals with Business Partners”.

Another big concern for Naidoo and her lawyer is the fact that PLJ did not pay occupational rent for all the years he was left in control of the plaza.

Protopapa claims he had a verbal agreement that PLJ Investments wouldn’t pay occupational rent. He claims that this agreement was later committed to writing, although it is “the one document we can’t find”.

“Their [the liquidators’] actions speak louder than words. For eight years, they have never sued us [for Sheffield Plaza occupational rent]. We had an agreement,” he said.

The hiatus in paying occupational rent of R35,000 a month saved PLJ between R3m and R4m.

Tintinger said that Naidoo would apply to the high court to demand that Business Partners be held accountable for its “collusive” dealings that saw occupational rent not being collected.

As part of this application, all rent not paid to the liquidators by PLJ would be used to reduce Business Partners’ R2.6m claim against Yamani and so the outstanding rent would clear the claim, he said.

One of the reasons Protopapa put forward to justify failing to pay occupational rent, was the improvements that his company had made to Sheffield Plaza.

In a founding affidavit, PLJ shareholder Andre Birkenstock said the company had spent R2.7m upgrading and repairing Sheffield Plaza.

“Why we believed we shouldn’t be paying occupational rental is that when we took over [Sheffield Plaza], it was making a massive loss,” Protopapa said.

However, Noseweek has copies of financial statements compiled by Business Partners that show Yamani was making a profit before December 2009 when PLJ signed the sale agreement.

The Yamani income statement for the year ended June 2008 showed a net income of R270,528 and for the year ended December 2008, net income was R434,573.

For the year ended March 2009, there was a net loss of R49,226.

A key sticking point for Naidoo is that the agreement to sell the plaza to PLJ back in 2009 was for a price of R3.5m, plus value added tax, but the property was now worth R11.5m, nearly triple the initial price.

“A valuation was done at the beginning of 2017 by Nedbank for PLJ Investments. Nedbank valued the building at R11.5m. This calculation was made based on the rental income, which is in the region of R150,000 a month and the value of the physical building,” Naidoo said.

Protopapa said: “The property was never worth R11.5m – it is not even worth R11.5m now.”

However, he confirmed that Nedbank carried out a valuation of Sheffield Plaza in 2017, but he had not seen the result.

“They think [Sheffield Plaza] is worth R11.5m and they are thinking they are going to be in the money at our expense. All these people are colluding so that we lose the property,” Protopapa said.

There have been several reasons why Yamani is still in liquidation after 11 years and why those involved have yet to resolve them.

Frey sent the following email to Anticevich on 30 August, 2017, which highlights the situation: “I don’t know what to do with this thing anymore. We get guarantees then we don’t get clearance figures [from the city council], by the time we get these figures the guarantees have lapsed and so it goes on and on.

“Sheffield Plaza’s wall encroaches on someone else’s property. The banks say ‘we want building plans’. We go to the council. There are no building plans. Building plans have gone missing.”

Frey told Noseweek that Business Partners paid more than R1.2m to the City of Johannesburg in 2014 to obtain the rates clearance certificates for the transfer of the property. Still the transfer didn’t go through.

Tupa director Louis Birkenstock (brother of PLJ shareholder Andre Birkenstock) wrote to Anticevich on 18 February 2016:

“We have endeavoured over the past year [seven years after a judge placed Yamani in liquidation] to obtain approved building plans for the property.”

Architect Sieg van Rensburg reviewed Sheffield Plaza’s layout and issued a report on 25 August 2015. The City of Johannesburg had no record of approved plans for the centre, he said.

The land surveyor’s layout showed a 1.04m encroachment on the adjacent stand, Van Rensburg said. “We suspect that this was a later addition to [the former] Nando’s premises, erected without approved plans... The most northern structure on Sheffield Street also appears to be over the 5m building line.”

Protopapa alleged that issues stem from Naidoo’s tenure, including the problems with City of Johannesburg utility bills. “When they built the plaza, the previous owner encroached on our neighbour’s site… There were no building plans,” he said.

Tintinger said that what Protopapa did not disclose was the terms of the agreement to purchase Yamani, back in December 2009. “The property was sold voetstoots… [the contract] provided that the seller shall not be answerable for any deficiency in the nature or extent of the property.

“The purchaser was liable for the electrical compliance certificate...The alleged encroachment had no impact on the sale,” Tintinger said.

Noseweek has a copy of the purchase agreement signed by Anticevich and Protopapa. It requires the purchaser to secure an electrical compliance certificate before the transfer, “the property is sold voetstoots”, and “the seller shall not be liable to point out any pegs or beacons in respect of the property”.

Naidoo said she was never involved in the construction of the plaza. “The improvements I had done were aesthetic. The main reason for this was that the franchise companies that took occupation of the centre had specific standards, with which we had to comply. Any breach of building structures, I had no part in. I was aware that there were building plans but there was never a need for me to get plans as there were no structural changes.”

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