The board of Afristrat Investment Holdings, a suspended JSE-listed company whose investors invested R2.3 billion in preference shares, has taken the decision to liquidate the company as it has become commercially insolvent.
Afristrat's Board of Directors has announced that on 20 February 2024, Judge Gregory Alley of the Pretoria High Court dismissed with costs an urgent application by single minority shareholder Jeannie Michelle Dreyer for the provisional liquidation of Afristrat. This decision was made on March 1, 2024.
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Also, Moneyweb confirmed last week that former Afristrat client Change The Conversation Digital plans to re-register its application for winding up Afristrat, claiming it is owed R433,000. It continues.
read:
Afristrat's application for provisional liquidation is rejected
Afristrat faces second liquidation application
Afristrat, formerly known as Ecsponent, issued a Sens statement on Wednesday informing its stockholders that on March 1, 2024, its board of directors decided that the company:
- Unable to repay debt.
- It is fair and just to wind up the company because it does not meet the solvency and liquidity tests set out in section 4 of the Companies Act 2008 (Act No. 71 of 2008), as amended.and
- The company is commercially insolvent and must proceed with a winding-up application under section 344(f) and/or section 344(h) of the Companies Act 1973.
Afristrat advised shareholders in a previous Sens announcement published on February 27, 2024:
- The company was unable to proceed further with its restructuring plan due to the suspension of operations and Mr Dreyer's application for liquidation.
- A going concern assessment conducted by the Board of Directors indicated that the Group is unable to continue as a going concern.and
- Groups cannot be placed in Business Rescue.
Afristrat added on Wednesday that the conclusion reached by the board regarding its going concern assessment will not be affected by the ruling and rejection of Mr Dreyer's liquidation application.
Read: Afristrat admits it is unable to continue as a going concern [Jan 2024]
The restructuring planning process referred to by Mr Afristrat includes an offer to holders of securities and is expected to resume once the JSE suspension is lifted and a judgment is rendered on Mr Dreyer's liquidation application. was.
Moneyweb's attempts on Thursday to obtain further comment from Afristrat CEO George Manier were unsuccessful.
Questions remain about the board of directors’ decisions
Dryer on Thursday questioned how Afristrat's board of directors decided to liquidate the company, even though its accounts have not been audited in the past two to three years.
Afristrat last published its audited financial results for the financial year ended March 2021.
Read: Huh? Afristrat suspended by JSE issues cryptic trading update
The JSE will suspend all trading in Afristrat's shares from August 5, 2022, due to the company's failure to publish audited financial statements for the financial year ending March 31, 2022 within four months of the end of the year. I have decided that. JSE listing requirements.
There are no external auditors
Afristrat has announced the resignation of its external auditor, Nexia SAB&T, with immediate effect from August 12, 2022, but to date has not been able to appoint a new external auditor.
read:
JSE suspends trading in AfriStrat shares [Aug 2022]
Afristrat violates corporate law [Jun 2023]
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In terms of corporate law, companies have 40 days to appoint new auditors, which means Afristrat must appoint a new auditor by September 21, 2022.
Manier told Moneyweb in June 2023 that it would be impossible for Afristrat to appoint a new auditor while the minority shareholders are liquidating the company, and that the appointment of a new auditor would only be possible once that process was completed. He said he would have to wait until then.
Investor moves forward with appeal plan
Mr Dreyer confirmed on Thursday that he would definitely apply for leave to appeal the rejection of the AfriStrat liquidation application.
“The documents are ready and I plan to submit them tomorrow.” [Friday] Or something,” she said.
Dryer was unsure whether she and Afristrat's 119 other investors who supported the company's liquidation application would seek to intervene in Afristrat's own liquidation application.
“We will consider whether to intervene in this matter after Afristrat submits its liquidation application,” she said.
Moneyweb sought comment from Change The Conversation Digital on Thursday on whether it would continue to proceed with Afristrat's liquidation application following the announcement that Afristrat would be launching its own application and possible intervention into this application. But it failed.
My Bucks
In May 2022, Afristrat revealed that it had lost almost the entirety of its R1.5 billion investment in Myvax SA, a multi-South African microlender that was then listed in Frankfurt.
MyBucks went bankrupt and subsequently went into liquidation, with Afristrat filing an R800-million claim against the company.
It is unclear what happened to this claim.
read:
Afristrat 'loses' R1.5bn investment in Myvax
High Court bid to liquidate Afristrat [Oct 2022]
Afristrat faces music liquidation [Jun 2023]
