Afristrat Investment Holdings, a suspended JSE-listed company whose investors invested R2.3 billion in preference shares when it was still called Exponent, is facing a second liquidation application. .
This follows a similar application by Afristrat's sole investor, Jeannie Michelle Dreyer, which was rejected by the High Court in Pretoria last week.
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read:
High Court bid to liquidate Afristrat [Oct 2022]
Afristrat faces music liquidation [Jun 2023]
Afristrat's application for provisional liquidation is rejected [Feb 2024]
The latest application was filed by Change The Conversation Digital (CTCD), a former client of Afristrat, for R433,000, which it claims Afristrat owes and should pay.
CTCD's primary responsibility is to develop and implement communications strategies.
This application was originally placed on the opposition roll for July 20, 2023, but was removed from the roll pending the outcome of the application filed by Mr. Dreyer.
Following the ruling rejecting Mr Dreyer's application, the CTCD liquidation application is in the process of being re-registered.
court notice
Natalie Lubbe, director of NLA Legal Inc., CTCD's lawyer, said Thursday that the matter was initially placed on the no-objection register because Afristrat did not file a notice of intent to oppose the application. acknowledged.
But Lubbe said he wants to take the matter to trial in the wake of the Dreyer ruling. For High Court practice directions, it is necessary to apply for an unobjectionable hearing date.
She said that once we have that date from the Registrar, we will notify Afristrat of this date and give it an opportunity to object to the matter, but if there are no objections, the application will proceed without objection to an unobjectionable hearing date. .
Lubbe added that if Afristrat opposes the application, it will need to remove the matter from the court's list of no objections and allow Afristrat to file opposition papers.
“If all the requirements set out in the Practice Direction are met, you can apply for a date on the opposite side’s court register,” she said.
Afstrat “cannot repay debt”
Keith Campbell, CTCD's sole director, said the purpose of the application was to obtain a winding-up order in respect of Afristrat on the basis that it was deemed unable to pay its debts.
Mr Campbell said Afristrat owed CTCD R433,000 and therefore CTCD, as a creditor, had the power to apply for the winding-up of Afristrat.
He said that since June 1, 2015, CTCD has provided services to Afristrat in special instances and on request pursuant to the Client/Agency Agreement entered into with Afristrat, then known as Ecsponent Limited. He said he had done so.
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He said CTCD was Afristrat's public relations and social media agency and was responsible for the company's public relations and social media management in South Africa.
Campbell said these services include, but are not limited to, general public relations, crisis communications, web design, website hosting and management, and stakeholder communications.
He said that CTCD provided services to Afristrat until September 2022, but ceased providing these services due to Afristrat's failure to pay the account for these services that CTCD provided to the company.
Mr Campbell said that for the period from April 2020 to September 2022, CTCD submitted a number of invoices to Afristrat for services worth a total of R793,000.
However, Mr Campbell said Afristrat had only made intermittent payments to CTCD totaling R360,000, usually after CTCD had followed up on payments on the account.
multiple follow-ups
Campbell said his wife, Sandy, sent an email on March 31, 2022 to various Afristrat staff, including former CEO Tertius de Kock, stating that CTCD's 2022 I attached my March statement and asked when I would receive payment.
In response, Mr de Kock acknowledged CTCD's work with Afristrat over the past 10 years and said it would work with FirstCred to ensure sufficient cash flow to pay monthly operating costs going forward. He said that this will be implemented from April 2022. .
According to Campbell, de Kock further stated that Afristrat will continue to raise funds to settle all delinquent creditors and support the company's working capital requirements over the next 12 months. He said the company would begin the fundraising process over a two-month period.
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He added that Mr de Kock promised to settle CTCD's account in full from these proceeds and pay CTCD R20,000 the next day.
Mr Campbell said his wife Sandy wrote in an email on August 1, 2022 to Afristrat's group finance manager, Tabena Badianyama, that the CTCD reflected outstanding amounts for work done “over the past two years”. Attached is a statement from.
He said Mr Badianyama advised that Afristrat has been restructuring since 2020 to address the current cash flow situation. Although the restructuring did not immediately resolve the cash flow situation, the Afristrat board was confident that it would be able to resolve the outstanding balances of delinquent creditors in the final stages of the restructuring phase.
Read: Afristrat violates company law
Mr Campbell said Mr Badianyama had stated that he could not give CTCD a specific deadline for when Afristrat would be liquidated.
He said that no settlement plan had been drawn up and that after the R20,000 was paid in accordance with the promise made by Mr de Kock on 31 March 2022, no further payments were made by Afristrat to CTCD. said.
He said that a further email sent to Mr. Badianyama on September 22, 2022 requesting a meeting to discuss the payment plan went unanswered, and that from April 1, 2022, Afristrat would not be able to provide CTCD. He said no payments had been made.
Dryer to appeal
Mr Dreyer filed a liquidation application, which was heard in the High Court in Pretoria from 8 to 9 June 2023, on the grounds that AfriStrat's directors had committed “fraudulent or other illegal conduct or This was based on the fact that the assets of the person had engaged in fraudulent or illegal activities. It has been applied fraudulently or used wastefully to justify abolition orders. ”
Mr Dreyer previously said that Afristrat had received and apparently invested funds of “well in excess of R2.3 billion”, mainly from elderly pensioners, and offered shareholders and security holders 100% of their capital. It alleged that it made various representations about warranties and warranties that involved a rate of return. That has happened in the last few years. ”
Read: Huh? Afristrat suspended by JSE issues cryptic trading update
He will carry out all necessary investigations into Afristrat's assets and liabilities and report to the court as to the best interests of the many vulnerable pensioners whose funds are entrusted to Afristrat. Said the person is the best.
Mr Dreyer confirmed that he plans to appeal the judgment rejecting the liquidation application.
Going concern assessment
Trading in AfriStrat shares was suspended on August 6, 2022, as the company did not submit its annual report for the period up to the end of March 2022 within the stipulated four months from the end of the fiscal year, as stipulated in the listing requirements. It was suspended by the JSE on the day of.
Afristrat acknowledged that it would not be possible to continue as a going concern and that it would be “impossible to place the group under management rescue.”
Despite opposing Mr Dreyer's application six months ago to put the group into provisional liquidation, the company confirmed it was a “going concern” in its quarterly progress report to 31 December 2023.
read:
JSE suspends trading in AfriStrat shares [Aug 2022]
Afristrat has acknowledged that it is unable to continue as a going concern. [Jan 2024]
Afristrat's advisory update, dated February 27, 2024, published in Sense on Tuesday did not mention the rejection of Mr. Dreyer's liquidation application.
The Afristrat board said it would “continue to await the decision on the application before acting on the conclusions reached in the report.” [going concern] evaluation”.
It further stated that the conclusions reached in the going concern assessment are “unaffected by the judgment.”
