JOHANNESBURG - Golf & Leisure, the company that partnered Seeff Properties in a disastrous fractional title scheme, is being liquidated but former director Samuel Seeff has a rescue plan.
Samuel Seeff told Moneyweb on Wednesday: "If the liquidators accept it, villa owners will lose only one week of occupation. Most purchased four weeks, so we hope to restrict their losses to 25% of the original investment." Seeff said his rescue proposal incorporated an offer of several million rands from his company. The major creditors are the banks, led by RMB. Under the scheme launched by Seeff and Golf & Leisure, some 400 investors bought shares in 40 companies, each of which owned upmarket villas in some of SA's best-known golf estates. Investors understood that once the shares had been paid for, the companies in which they invested would own the villas debt free. To their horror, after shareholders had paid for two years and more, they discovered the villas were encumbered by mortgage bonds amounting to some R30m. The liquidators, Christopher van Zyl, Chavonnes St Claire Cooper and Bongani Raziya of Cape Town, wrote to shareholders on April 11: "it appears that the funds, which were paid for by the subscribers for shares, were not utilised exclusively for the purposes of that entity...but that the monies were used to fund the purchase of properties and development costs in other entities.." Seeff's partner in Golf & Leisure was Henry Greyling. Seeff sold out of the company, he says, because he disagreed with its direction. Whereas he wanted to sell only completed properties, Greyling wanted to develop and sell off plan. When problems blew up, Seeff cancelled Golf & Leisure's right to market the fractional title units under the Seeff umbrella. Greyling has suggested certain remedies but Seeff refuses to have anything to do with him. Shareholders have been incensed at both parties. They say most of the marketing of the fractional title units played up the Seeff name and they want one of SA's biggest estate agencies to recompense them. Greyling recently wrote to shareholders: "It is with great regret that I have to inform you that I have had to sign off on the liquidation of Golf & Leisure Joint Ownership (Pty) Ltd. I have done my utmost to try and save a situation that now seems impossible to contain and it would be irresponsible NOT to liquidate, as I have not received the assistance I have been hoping and asking for. I have also spent between R15m - R20m of my personal funds to cover the excess building costs of your villas and to keep the servicing of the bonds in place until December 2010. As you know, I called for a meeting with Seeff and yourselves nearly three weeks ago (Wednesday evening) and I sincerely hoped the solutions would be forthcoming out of this meeting, but due to the fact that Seeff refuses to address the situation with you in my presence, it may have been another waste of your time. Since early December I have been working on possible solutions to get the bonds to zero and have been extremely close to having the solutions, but these would involve ?time' from yourselves, as well as Seeff's assistance. Both felt impossible to me after the meeting, but even so, I DO know the figures and do feel that with my assistance this could be solved, but I have run out of time, money and I believe, your patience. I believe I can retract the liquidation process at any time, but cannot do so until I/G&L is placed in a liquid position. I am open to suggestions though, but this will have to include approval from 100% of the shareholders, as well as me becoming liquid again, in order to get to the banks and yourselves. It was interesting listening to Jaftah (an auditor trying to put together accounts, which were non-existent before November) and Samuel's address to you on that Wednesday night and I just noticed again that they don't WANT to incriminate me, they HAVE to find something to try and incriminate me and that is their ONLY focus, hence paying for the audit. They have absolutely zero interest in actually sorting the problem. Secondly, after ALL the shareholders agreed that they will give me time to sort this, Mrs. Joanne Herr AGAIN threatened me that she/they are going to take me ?out' anyway??" This is how Greyling describes what went wrong: "My License was taken away late November 2010 by Seeff for reasons I disagree with, as... the same model was in place during their directorship and management period (until 2008), which were the mismanagement issues they left me with in a model they created and used me as the pawn, after selling their shares for R6.3m to me. "My Pretoria residential license was also taken away. This branch was not in breach and they have kept MY income (by forcing banks and attorneys to pay MY money to THEM) for themselves... they say they can keep the money, as they have lost future potential license fees..... Should they pay me what is rightfully mine, I would have some cash flow again and will be in a position to go and assist in solving the bond issues." Greyling explains what happened to the money: "Fact: R58m in bonds of which around R20m is unsold stock, which can be sold outright to the open market and leaves the real problem at R38m. This R20m is what Seeff's dream & focus is on, so that their surety in this facility will not be called up. This R20m however does NOT affect you the shareholders...it is G&L's unsold stock; "Fact: Outstanding debtors @ R10m(conservatively) plus excesses spent on your villa's @ R10m(conservative) plus the R10m which Seeff "took" out of the company, proves that R30m is accounted for and only R8m remaining to be sorted out. Where is the R8m though? "Fact: It has cost G&L & me between R21m - R28m to service all the bonds over the last 4 - 5 years and as can be seen above, there WAS only R8m left in the bonds, hence the fact that I had to fund the balance out of my personal funds. This proves that every cent is accounted for! "So, should Seeff put their R10m back and the outstanding debtors (R10m) come in from the shareholders and the shareholders pay the R10m (which they have received the share-value for in their asset), the worst case scenario would be to solve R8m and I believe with associates I have (maybe had, thanks to seeff? [sic]) in place and the fact that I believe the banks have been negligent as well, I have no doubt that EVERYONE would like to sit and find some solutions. "Absolute worst case, should shareholders agree to pay back/accept the overruns of R10m (R617.00/m over 3 years), which they have received the benefit of; the balance would be easily negotiated with the banks. I do believe that a liquidator will set the "Sale of Shares agreement" between Seeff and myself aside, which will alleviate some of the above, but as you know, this will come at a cost, but I have been left with zero alternatives. "Should the shareholders decide NOT to pay for the excesses in building costs, the problem will remain R18m.....even with this figure, I believe there are many solutions! "I want to place on record that I will be fully committed to assist in workable solutions to get this problem solved, but cannot do it without being placed in a liquid position, but it was never my intention to leave the shareholders in such an untenable situation. But, I seem to be the only one that sincerely would like to solve this. Others are screaming words like theft and fraud, but I hope you can see above that it is impossible that anything got stolen or defrauded. It was largely a product of the recession and a ridiculous "move" by SPS, as well as mismanagement (a model created and managed by SPS and then left to me) of the business, but I do pride myself on 2 things and I WILL hold onto this; "I do not know of anyone in this world that would spend his own money to service others' bonds and excess building costs to the tune of at least R15m; "Anyone who ran into the face of a R58m problem would have run away. I did not run away and am still sitting here hoping for the time to try and resolve it!! Like others I have NEVER tried to distance myself from it! "I also give you my undertaking that every statement I have made can be qualified through about 200 e-mails in my possession proving the absolute malice I have had to endure... "I further want to place on record that legal action is being considered against Samuel Seeff, Stuart Manning (the "custodian of the brand), Tracy French and SPS... "I am highly embarrassed about the situation and that I was ever associated with the Seeff brand, which did NOT perform diligently according to their license agreement in protecting, you our shareholders', investments. Seeff told Moneyweb that full details of his proposals will be published after he has had a response from the liquidators.