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Sharemax Investments’ attorneys Weavind & Weavind has registered a new corporate entity. |||

Sharemax Investments’ attorneys Weavind & Weavind, a 105-year-old firm that faces possible liquidation over its alleged illegal release of funds deposited into its trust account by investors in two Sharemax syndications, has registered a new corporate entity.

Companies and Intellectual Property Registration Office records show that W and W Associates was registered by Doreza van Wyk, an associate attorney at Weavind & Weavind, on November 10.

The new firm lists the same physical address and auditors as Weavind & Weavind but the physical address differs from that on Weavind & Weavind’s website. The business start-up date was November 10.

Jaco Spies, a senior legal official for the disciplinary department of the Law Society for the Northern Provinces, said last week that the society did not have any knowledge of the new registration.

Spies said all new law firms were required to register with the law society, complete certain forms and obtain a fidelity fund certificate.

Raiford Johnson, a senior partner at Weavind & Weavind, confirmed the firm had registered a company by the name of W and W Associates “to meet any future needs in terms of our expansion and/or diversification strategy”.

He said: “At present neither our directors nor any of the lawyers employed by us, including Ms Van Wyk, have any intention of practising in any other capacity than as directors and employees of Weavind & Weavind.”

Kobus Schabort of Schabort Incorporated, an attorney representing 11 investors in two Sharemax syndications, who submitted a letter of demand in October to Weavind & Weavind for the repayment of R1.55m his clients had deposited into its trust account for The Villa and Zambezi Retail Park syndications, declined to comment on the reason for Weavind & Weavind registering a new firm.

“I don’t know why they did it but can make my own inferences,” he said.

The demand submitted to Weavind & Weavind was in terms of section 345 of the Companies Act, which is a precursor to a possible liquidation application.

A government notice on property syndications, issued in 2006, prohibits the withdrawal of funds from a trust account before properties for a proposed syndication have been transferred to the syndication vehicle. Neither Zambezi Retail Park nor The Villa have been transferred to the syndication vehicles. Weavind & Weavind maintains the government prohibition is not applicable to the firm.

Schabort said a decision had not yet been taken on whether an application would be launched for the liquidation of Weavind & Weavind. He said consultations were still taking place with his clients and that a decision would definitely be taken this week.

A R200 000 claim was lodged by a single investor in October with both the law society’s fidelity fund and Attorneys Insurance Indemnity Fund related to the release of funds deposited into Weavind & Weavind’s trust account.

The same investor also opened a fraud case at the Brooklyn police station in Pretoria. The case was subsequently transferred to the commercial crimes unit.

Sharemax defaulted on monthly payments to investors in early September and construction on both Zambezi Retail Park and The Villa ground to a halt at the same time.

The registrar of banks in mid-September appointed statutory managers to manage the repayment of funds after an investigation found that Sharemax’s funding model contravened the Banks Act.

About 40 000 shareholders have invested about R4.5 billion in property syndications promoted and marketed by Sharemax. – Business Report

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