SOUTH AFRICA – In a legal showdown more riveting than a telenovela cliffhanger, former Delta Property Fund bigwigs Johannes Magwaza and Sandile Nomvete find themselves in the hot seat as a private equity firm, Vantage Capital Fund Management, aims to declare them “delinquent directors.” The drama unfolds in a Johannesburg courtroom, where the script reveals alleged governance breaches at Delta that make soap opera plots look like kindergarten finger-painting.
Vantage Capital Fund Management, not content with popcorn-worthy legal proceedings, is also suing the duo, along with another ex-exec, for a jaw-dropping R371 million over a property deal that went from Rags to Riches to Legal Mayhem. The private equity maestros claim they granted a R200 million credit facility to a company named Somnipoint nearly a decade ago. The deal included a mortgage bond over a building charmingly called Absa Towers and the “cession of rentals” – because nothing says financial wizardry like ceding rentals.
Vantage argues that Somnipoint’s default on the debt wasn’t your run-of-the-mill financial fumble. No, they’re accusing the directors of Somnipoint of using Delta to throw a financial tantrum and prevent Vantage from flexing its creditor muscles. Nomvete, Delta’s ex-CEO, stayed tight-lipped about the court showdown, probably saving his words for the courtroom script. Magwaza attempted a failed plot twist to have the court reject Vantage’s application, claiming they had no right to play director-police.
Vantage countered with a dramatic assertion that they were acting in the “public interest” because, you know, these guys were directors of more companies than there are episodes of soap operas on a streaming service. Judge Norman Manoim, perhaps realizing the entertainment value, gave Vantage a green light to tweak its application, ensuring the courtroom theatrics continue.
Magwaza, a seasoned board veteran, stayed silent in response to questions, perhaps waiting for the season finale to drop some truth bombs. His departure from Delta in 2020, alongside Nomvete and other executives under a metaphorical dark cloud, hinted at an impending plot twist. Delta’s own revelation of past governance failings and wrongdoing added another layer of intrigue. Unfortunately, the forensic investigation report has remained as elusive as a cat burglar in the night.
The Absa Towers, a property deal at the heart of the legal spectacle, resembles a soap opera love triangle. Delta, in 2015, wooed Somnipoint with a R45 million deposit, only to suffer heartbreak when the investment committee swiped left on the deal. Nomvete, channeling his inner romantic, insisted the deposit wasn’t refunded because, well, love hurts.
Nomvete’s version of the script clashed with Delta’s recent annual report, which claimed the money wasn’t paid back. Ah, the joys of creative accounting! Nomvete, who took Delta public in 2012, dismissed whispers of the deal being less-than-arm’s-length and suggested it was all disclosed in the company’s pre-listing statement. Business Day’s sleuthing, however, found a plot hole – the statement mentioned Mesidox but forgot to invite Somnipoint to the pre-listing party.
Nomvete’s narrative spun a tale of caution, portraying Somnipoint as the Avengers assembled solely to buy the mighty Absa Towers. A building, he emphasized, that Delta dared not acquire, as it would’ve been like using dynamite to catch a butterfly.
A Delta spokesperson, probably sipping tea in the shadows, declined to spill the beans on the merits of the case. Instead, they tantalizingly hinted that the matter is “still proceeding,” leaving us all eagerly awaiting the next episode in this courtroom drama extravaganza.
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