Nova Property Group vs Personal Finance

Complainant: Nova Property Group

Lodged by:  Dominique Haese

Article: Sharemax ruling tests ombud’s powers

Author of article:  Laura Du Preez

Date: 5 June 2015

Respondent: Laura Du Preez, on behalf of Personal Finance

Complaint

Nova Property Group (NPG) is complaining about an article in Personal Finance (PF) of 18 April 2015, headlined Sharemax ruling tests ombud’s powers.

NPG complains that the following sentences were incorrect and defamatory:

·         “Judge Harms says his judgement does not concern itself with the findings of fact about Sharemax being a Ponzi scheme and its roleplayers deceiving the public, but…”;

·         “This contradicts a letter by a former director of Sharemax, Dominique Haese, sent to Sharemax investors informing them that the scheme of arrangement meant they no longer had a right to complain about their investments and that they would forfeit their rights in these should they pursue complaints to the ombud”;

·         “The judge also notes that the scheme of Arrangement on Zambezi Holdings can be set aside”;

·         “In September last year, [SARS] applied for Zambezi Holdings’ business rescue proceedings to be set aside because of non-compliance with the Companies Act”; and

·         “It is also filed for the liquidation of Sharemax Investments on the grounds that the company owes SARS R17 million in taxes. The case has yet to be heard.”

Standing

There is a dispute, though, over the question of whether NPG has the standing to lodge a complaint over the specific article – an issue with which I need to deal first. I quote the salient parts of both sides’ arguments in full:

Personal Finance says:

NPG does not appear to have been affected by the article complained of “and I submit that it does not have locus standi to lodge the complaint”.

Locus Standi

The group in this matter defines itself as the Nova Property Group. It is not a legal person as such, but a group of two companies. The companies that made up the Sharemax group of companies in the syndication scheme, are now 100% subsidiaries of NPG.

NPG is mentioned only once in the article:

“Haese sent the letter in her capacity as managing director of Frontier Asset Management, which is providing secretarial services to the debenture holders in the restructured scheme now in the Nova Group.”

The persons (natural and legal) who are subjects of the article, where it is complained of, are Sharemax Investments Proprietary Limited (in business rescue), Zambezi Retail Park Holdings Limited (“Zambezi Holdings”) and Haese.

Sharemax Investments Proprietary Limited is under business rescue and the person in control of the company is the business rescue practitioner, Liebenberg David Ryk van der Merwe.

As regards Zambezi Holdings, it is a separate public company, albeit a 100% subsidiary of Nova Property Group Holdings Limited.

Haese is mentioned in the article in her personal capacity and as former director of Sharemax Investments.

The Press Code provides for third party complainants, but only to the extent of persons who (a) act on behalf of other persons who cannot act in their own name, (b) act as a member of, or in the interest of, a group or class of persons, or (c) act on behalf of an association acting in the interest of its members. “None of the aforementioned applies to NPG.”

According to the recommendations of the Langa Commission’s Report on Press Regulation in South Africa (April 2012: Print Media South Africa and SANEF) it will be necessary for the question whether a complainant has standing on the basis of (b) above to be determined on a case-by-case basis. If a complainant seeks to bring a complaint under (b), he or she will need to demonstrate that it is in the public interest.

NPG has no locus standi in respect of the affairs of Sharemax Investments Proprietary Limited (in business rescue), Haese in her personal capacity or Zambezi Holdings. NPG has not made out a case [showing]why it should be allowed as a third party complainant to complain on behalf of the three parties mentioned above and has not indicated what public interest will be served by allowing the third party complaint.

Moreover, contrary to its own conduct in seemingly associating itself with Sharemax, Haese, on 6 August 2013, made the following public statement seemingly on behalf of Frontier Asset Management and Investments Proprietary Limited, in which, on behalf of NPG, NPG disassociates itself from Sharemax Investments and which formed the substance of the first complaints against Bruce Cameron, who was the editor of Personal Finance at the time:

“Of further importance is the fact that Sharemax Investments ceased its activities relating to the erstwhile “Sharemax Group” during or about July 2010 and never had, does not have and never will have anything to do with the Nova Group. This has been communicated extensively over a period in excess of the past 2 years, in the process that followed the high court sanctioned restructuring of the erstwhile “Sharemax Group”. In particular, the shareholding in Sharemax Investments is not owned by the Nova Group or any individual associated with the Nova Group and never will be. Similarly, Sharemax Investments have no shareholding in and does not own any assets of the erstwhile “Sharemax Group” and Sharemax Investments has no shareholding in and does not own any assets of the Nova Group, and never will.

 

In a communication by NPG to shareholders and debenture holders in October 2015, NPG said the following:

“the Nova Group is not involved in the various matters emanating from the FAIS Ombud, regarding “complaints” lodged by “clients” of Financial Advisors, against their Financial Advisors” and;“We re-iterate that none of the matters emanating from the Ombud and/or the FSB (for that matter), have any impact on the Nova Group and its Schemes” and “the Nova Group Board wishes to advise that any Sharemax Investments business or the liquidation thereof or not, can NOT and does NOT, in any way, affect you, the historical investor, in the historical “Sharemax Group”, now either a Shareholder or Debenture Holder of the Nova Group”. [The emphasis is that of NPG.]

 

NPG is therefore complaining about matters which it repeatedly and over more than two years have publically proclaimed to have nothing to do with it.  It should not be allowed to submit complaints about matters that it has either publically disassociated itself from or that clearly relates to companies that it currently does not control.

Abuse of office

The complaint amounts to an abuse of the processes of this office.

NPG disagrees:

NPG was directly referred to in the article and associated to the historical “facts”, again, incorrectly reported, whilst such historical matters have nothing to do with the complaint, and was most certainly affected by the article.

Both pensioners Mrs G Siegrist and Mrs J Bekker are Debenture Holders with Debentures in Nova Investments, who are to be repaid by Nova Investments in accordance with the terms of the Debentures. These Debentures were newly created, by High Court Orders, and have nothing to do with the history of “Sharemax” or any affairs of “Sharemax”.

Zambezi Retail Park Holdings Limited, formed part of the Nova Scheme of Arrangement and the Zambezi property is owned by the Nova Property Group. Therefore any reference made to “Zambezi” is directly linked to the Nova Group.

The Section 311 Scheme of Arrangement is directly linked to the Nova Property Group. Therefore any mention of the 311 Scheme is directly linking the Nova Property Group.

The reference to “the letter sent by D Haese” is directly involving the Nova Property Group, as, had the Responded taken the time to read the letter and its attachment, she would have realised, that the content of the letter was based on the attached memorandum sent by Nova by its Debenture Trustee and the 2 Court appointed Receivers of the Schemes, merely under cover of a Frontier letter, signed by Ms D Haese, as Frontier is the Nova appointed Communication Service Provider to some 35 000 Debenture Holders within Nova [on behalf of]Nova.

My considerations

Nova is the group that took over when Sharemax could not continue. Investors who entrusted their money to Sharemax (in whatever of the Sharemax entities) now find themselves the holders of debentures or shares in a Nova company.

The closeness of the relationship is furthermore evident from the presence of the same individuals at the helm of Sharemax, Nova and Frontier Asset Management & Investments (Frontier), a company providing services to Nova.

Frontier’s website states:

“The current board of directors of Frontier is Dominique Haese, Dirk Koekemoer, Matthew Osterlöh, Corrie van Rooyen, and Nel van Zyl. The above-mentioned individuals were key personnel in the Sharemax set up, responsible for the administrative- and property management functions which Sharemax carried out on behalf of the property companies, and they have brought a wealth of insight and continuity along with them to Frontier.”

Official records also name Dominique Haese and Dirk Koekemoer, Rudi Badenhorst and Connie Myburgh as directors of Nova. Haese, a former managing director of Sharemax, is currently in a similar position at both Nova and Frontier.

Despite attempts from both sides to create distance between the various entities, it is evident that NPG does indeed have locus standi. This is not a third party complainant, as argued by Du Preez, but a complainant in its own right due to its direct and manifold links to the other affected parties.

The text

The article, written by Laura Du Preez, quotes a statement by the financial advice ombudsman to the effect that a ruling by the Appeal Board of the Financial Services Board (FSB) in favour of property syndication promoter Sharemax Investments and its former directors will have far-reaching implications for her office.

The Appeal Board reportedly upheld an appeal by Sharemax Investments and four of its former directors against a ruling that held them and two financial advisers jointly and severally liable for the losses incurred by two elderly investors.

“In upholding the appeal, Judge Louis Harms, the chairman of the appeal board and former Supreme Court of Appeal judge, ruled that [Noluntu Bam] the Ombud for Financial Services (also known as the Financial Advisory and Intermediary Services, or Fais Ombud) does not have the authority to make rulings against any party other than those against whom consumers of financial products have laid complaints.”

The complaint in more detail

  1. “Judge Harms says his judgement does not concern itself with the findings of fact about Sharemax being a Ponzi scheme and its roleplayers deceiving the public…”

Haese says the impression created is that the judge agreed with and even reiterated “findings of fact” to the effect that Sharemax was and is a Ponzi scheme and that its role-players have deceived the public. “The Judge did not say this and indeed made a finding which nullifies the existence of any such “findings of fact” and/or “deceiving of the public” – instead, she attests that the judge set aside the subject matter determinations of the FAIS ombudsman in their totality, and also dismissed Bam’s views regarding Sharemax Investments (Pty) Ltd and its directors.

Du Preez responds (I summarise the salient arguments):

The main article substantially contains a report by her on the ruling of the Appeal Board of the Financial Services Board in the consolidated cases of FAIS 00039/11-12/GP1 and FAIS 06661/10-11/WC1.

Out of the 1267 words of the main article NPG takes issue only with her interpretation of a statement by Judge Harms, summarised by the journalist to the effect that his ruling did not concern itself with the findings of fact about Sharemax being a Ponzi scheme and its role-players deceiving the public, but with the legal issues at the heart of the functioning and jurisdiction of the ombud’s office.

Paragraph 6 of the judge’s ruling states:

This judgment is not concerned with the correctness or otherwise of the findings of fact contained in the Ombud’s determinations such as that the appellants had deceived the public or that the investment scheme was a Ponzi scheme. It is limited to legal issues that go to the heart of the functions and jurisdiction of the Ombud. The personal circumstances of the two respondents, as unfortunate as they are, can accordingly not play a role in the outcome of this appeal.

In paragraph 38 of the ruling, the judge summarizes the initial ruling of the FAIS Ombud as follows:

The financial advisers provided financial services. In doing so they committed breaches of the Act and Code. In particular, the investment in Sharemax (meaning Zambezi Holdings) was inappropriate for the profile and needs of NPGs. The advisers acted as representatives of USSA. USSA was an authorised financial services provider. USSA in particular was in breach of sec 13(2)(b) of the FAIS Act in having failed to take the steps that were reasonable in the circumstances to ensure that the representatives complied with any applicable code of conduct as well as with other applicable laws on conduct of business. USSA and Sharemax (meaning the first appellant) were “joined at the hip”. Zambezi Holdings issued a false and misleading prospectus and the investment scheme set out therein was a Ponzi scheme. Zambezi Holdings in turn was controlled by the first appellant, which was also an authorised financial services provider, in cahoots with Zambezi Holdings, misled the public. Individuals cannot hide behind the corporate veil. As a result of the breaches of the Act and Code, and as a result of the fraud by Sharemax, NPGs lost their capital and anticipated income invested in Zambezi Holdings.

 

 

In paragraphs 52 and 53 of the Ruling, the judge concludes as follows:

There is simply no scope within the Rules for the Ombud to determine without reference to the complaint as filed as to who should be a respondent. In the light of this conclusion it becomes unnecessary to deal with the content of the notices save to say that they did not forewarn the appellants of the factual findings the Ombud intended to make, especially those relating to the prospectus, fraud and the Ponzi scheme. This was a serious breach of the requirements of fair administrative action and any court would on review have set aside the determinations on this ground alone.

 

 

In light of the above paragraphs in the judgment and the judgment as a whole, the sentence in dispute was a fair summary of the judge’s ruling in regard to the non-finding of fact.

The sidebar

The sidebar article relates to the second part of the Ruling of the Appeal Board.

Before dealing with the specific complaints, the following background is relevant: On 6 August 2013, Haese, in her capacity as CEO of Frontier Asset Management Proprietary Limited, wrote a letter to debenture holders in Nova Investments. Bruce Cameron describes the content of this letter as seeming to make the following points, namely that:

·         because of the scheme of arrangement of all the Sharemax entities, the investments in Sharemax no longer exists;

·         media reports about FAIS Ombud complaints and communication from the Office of the FAIS Ombud about these complaints to Sharemax investors have been giving false information about the complaints (to the FAIS Ombud) in respect of the so-called former Sharemax Investments;

·         Sharemax Investors, whose investments have been converted to debentures and shares in Nova, may be deemed to have abandoned and repudiated their rights in the new debentures and shares in Nova.

During the course of the arguments before the Appeal Board, it was suggested to the Appeal Board that acceptance of a compromise/novation of a debt, and if so, if a complainant compromises a debt, the Ombud become functus officio in relation to the complaint about the original debt. This argument is clearly the point Haese was trying to make to the debenture holders she addressed in her correspondence of 6 August 2013, although her point was that the debenture claim would fall away.

In the Appeal Board’s ruling, it is stated that the point is moot, in light of the narrow scope of the ruling, but the judge says that, because it was fully argued and for future guidance, the Board decided to give directions thereon.

The sidebar was written to deal with this development, in light of previous articles on the point and the judge’s rejection of the Sharemax/Haese/Frontier argument. The sidebar is also important to the Personal Finance readers, as many of them were worried that they compromised their rights to hold shares and debentures in the Nova Group, after instituting claims against their respective financial advisors with the FAIS Ombud.

NPG disagrees, and states that PF had no right to “twist” the meaning of what was in the judgments by making such a selective comment, creating the impression that there was ever a Ponzi scheme or that certain role-players deceived the public.

“It is clear from the Judgement (when not quoted out of context) that such a statement was merely the opinion by the Ombud in her duly appealed on and now set aside Determination. The merit of this Ombud opinion was not argued in the FSB Appeal board hearing. The Judge set aside both the subject matter Determinations of the FAIS Ombud, in their totality, and dismissed the views of the FAIS Ombud regarding Sharemax Investments (Pty) Ltd and its directors, contained in such Determination. It is thus incorrect and biased for the Media to raise anything the Ombud wrote in her set aside Determination.”

My considerations

Firstly, Du Preez quoted Judge Harms correctly. The only other possible breach of the Press Code could be that she quoted him out of context.

After I have studied the judge’s finding meticulously, I cannot agree with NPG that the story twisted the meaning of the quote from Judge Harms, that the quote was selective, and that it created the impression that there ever was a Ponzi scheme or that certain role-players had deceived the public.

On the contrary, I believe that the sentence in dispute was rather important within the context of the story.

The finding by Judge Harms was not about the merits of the case, but rather about the Ombudsman’s jurisdiction and about Bam having asked Sharemax to respond while the latter was not part of the complaint.

  1. “This contradicts a letter by a former director of Sharemax, Dominique Haese, sent to Sharemax investors informing them that the scheme of arrangement meant they no longer had a right to complain about their investments and that they would forfeit their rights in these should they pursue complaints to the ombud”

Haese denies that this is correct. She says her letter of 6 August 2013 nowhere stated that an investor “no longer has a right to complain”, or “that they would forfeit their rights”.

Du Preez responds (again, I only mention the salient issues):

As fully argued by Cameron and (Pretoria News financial editor) Roy Cokayne, as well as in other media, the public perceived the letter of 6 August 2013 as a caution, warning or threat to Nova share and debenture holders not to pursue claims before the FAIS Ombud – pursuing the claims could lead to it being deemed in law that the claimant before Bam had abandoned his or her rights as debenture holder.

Moreover, on the converse, Haese argued in her letter as well as before the Appeal Board that Bam had no authority to investigate complaints relating to the investments in Sharemax, as those investments no longer exist.

Referring to the Appeal Board finding, the reporter says:

“It is therefore the reporter’s duty to take relatively complex matters and write them in language that is understood by the average reader. The statement in the paragraph complained must be judged in this context.

“I accordingly submit that my statement, in light of the above paragraphs in the judgment and as read with the full context and meaning of Haese’s letter, is a fair summary of the Judge’s ruling in this regard and that my comment relating to Haese’s letter is fair and correct and based on the facts as I understood and still understand them.”

 

My considerations

In this instance, both parties resort to numerous technical arguments that are not pertinent to the issue at hand. All I need to do is to establish whether or not the sentence in question accurately and fairly reflects the content of the letter it refers to.

The relevant part of Haese’s letter reads as follows: “Should you persist in seeking satisfaction through the Offices of the Ombud for repayment of your restructured historical investment/s referred to above, please note that you may have chosen to abandon and repudiate your interests, rights and/or claims as provided for in and regulated by the aforesaid Schemes of Arrangement and as reflected in and governed by the Debentures or Shares having been issued to historical investors, including you (now Debenture Holders or Shareholders), following the sanctioning of the Schemes.” (My emphasis.)

I accept that Haese’s words could have been interpreted as a caution, warning or even a threat to Nova share and debenture holders not to pursue claims before the FAIS Ombud, as argued by Du Preez. I also take into consideration that Haese did indeed challenge Bam’s authority to investigate complaints relating to the investments in Sharemax, arguing that those investments no longer existed.

Even so, though, Haese was careful in the phrasing of her statement – she did not state as fact that shareholders “would” forfeit their rights, but rather that they “may have chosen” to do so.

Likewise, Du Preez should also have been more careful in the phrasing of her sentence. Her reporting, in fact, turned a possibility into fact.

  1. “The judge also notes that the scheme of Arrangement on Zambezi Holdings can be set aside…

Haese says the judge expressed a technical legal view as to the general principles of law, namely that a Scheme of Arrangement may be set aside on the basis of fraud. “There was no indication that any fraud existed or was contemplated be it by the Judge or the Ombud, which could form the basis of the Zambesi Holdings Scheme being set aside.”

She complains that the story’s intention and innuendoes were to convey the opposite, namely that the judge and the Ombud expressed the view or indeed gave a judgment to the effect that the Zambezi Holdings Scheme (ZHS) stood to be set aside due to fraud.

Haese submits the judgment made it clear that there had been no complaint lodged with the Ombud relating to any Ponzi scheme or to fraud – in addition the judge specifically noted that ZHS was not mentioned and did not form any part of any matter complained of in the Siegrist and Bekker cases.

Du Preez replies:

The comment the journalist made to her readers was to say that all is not necessarily lost because of the judgment – if fraud can be proven. As background facts for this comment, she relied on Bam’s original decision, which is summarised by judge Harms in his ruling as follows:

The financial advisers provided financial services. In doing so they committed breaches of the Act and Code. In particular, the investment in Sharemax (meaning Zambezi Holdings) was inappropriate for the profile and needs of NPGs. The advisers acted as representatives of USSA. USSA was an authorised financial services provider. USSA in particular was in breach of sec 13(2)(b) of the FAIS Act in having failed to take the steps that were reasonable in the circumstances to ensure that the representatives complied with any applicable code of conduct as well as with other applicable laws on conduct of business. USSA and Sharemax (meaning the first appellant) were “joined at the hip”. Zambezi Holdings issued a false and misleading prospectus and the investment scheme set out therein was a Ponzi scheme. Zambezi Holdings in turn was controlled by the first appellant, which was also an authorised financial services provider, in cahoots with Zambezi Holdings, misled the public. Individuals cannot hide behind the corporate veil. As a result of the breaches of the Act and Code, and as a result of the fraud by Sharemax, NPGs lost their capital and anticipated income invested in Zambezi Holdings.

The Appeal Board did not make a factual finding in respect of the above findings by the FAIS Ombud, as it did not have to.

In paragraph 68 of the Ruling, judge Harms states the following:

“As mentioned, as long as a compromise is not set aside – fraud could be a ground – it stands.”

“The FAIS Ombud found that there was fraud. [Bam’s] factual finding was not considered by the Appeal Board and they expressed no opinion either way. Only time will tell whether another court one day finds that the FAIS Ombud was correct in her factual finding.”

She argues that, whilst Personal Finance does not give advice to people, it has a duty to tell them that all may not be lost. “That is the gist of my comment. Others may not agree with it, but it is based on fact and my opinion expressed on that fact.”

NPG denies that there was any fraud. It says the Ombud erred in her determination. “This is merely a defamatory attempt by [PF] to create an incorrect impression with the public, as if a fraud existed.”

Haese says that PF clearly is confused. “What the Judgement states, is that a compromise…stands. Therefore the Nova Group’s compromise stands! The Judge merely pointed out in his Judgement that it could be possible for any…compromise to be set aside on the grounds of fraud. This is the Law. Nothing complicated or new about that fact.”

She argues that PF created the false impression that there was fraud with regard to Zambezi Holdings, based on the Ombud’s “erred content of her Determination”.

“Please note that the Judgement sets aside the entire Determination. For [PF] to raise matters out of context and out of the Determination, is simply malicious… [T]he incorrect opinion drawn by [PF] is exactly why we laid this complaint. With the correct facts, one would certainly expect [PF] to form a different opinion.”

Haese also disagrees with the journalist’s statement that PF has a duty to tell the public that all may not be lost. “This is exactly what [PF] is doing, when telling thousands of people out there, on the [publication’s] formed opinion…that the compromise could be set aside!

My considerations

Even if Bam has erred (I am not saying she has), and fraud or no fraud, Du Preez merely quoted the judge. She did so correctly, and not out of context. She has done nothing wrong, and I have no grounds to find against her on this issue.

I appreciate the fact that Du Preez wanted to inform the public that all may not be lost.

  1. “In September last year, [SARS] applied for Zambezi Holdings’ business rescue proceedings to be set aside because of non-compliance with the Companies Act”

Haese complains this sentence is factually incorrect, as:

·         SARS never applied for Zambezi Holdings’ business rescue proceedings to be set aside;

·         Zambezi Holdings has never been and is not in business rescue or in any such type of proceedings;

·         Zambezi Holdings has always complied with the Companies Act;

·         there has never been any need for a business rescue plan to be published in respect of ZH; and

·         no business rescue practitioner has ever been appointed for Zambezi Holdings, and no “deadlines have ever been missed by anyone regarding that company.

Du Preez replies:

The journalist erroneously conflated Zambezi Holdings and Sharemax Investments. As soon as she realised the error she published, in Personal Finance, on 9 May 2015, the following:

In a report entitled “Sharemax ruling tests ombud’s powers” which was published in Personal Finance on April 18 this year, we erroneously stated that in September last year, the South African Revenue Service (SARS) applied for Zambezi Holdings’ business rescue proceedings to be set aside because of non-compliance with the Companies Act.

SARS in fact applied for the Sharemax Investments business rescue proceedings to be terminated as a result of non-compliance with the Companies Act.

Zambezi Holdings is one of the largest property syndication schemes that were marketed by Sharemax Investments. Personal Finance has also learnt that SARS’s application, including that for the liquidation of Sharemax Investments, was settled in December 2014.

Personal Finance regrets the error.

This matter has been corrected as soon as the error was discovered and it does not require any further adjudication.

My considerations

Du Preez has adequately apologized for her error and corrected the error. There is no point in me asking her to repeat herself.

  1. “It is also filed for the liquidation of Sharemax Investments on the grounds that the company owes SARS R17 million in taxes. The case has yet to be heard.”

Haese says all disputes between SARS and Sharemax Investments (Pty) Ltd were settled in December 2014, and there was no case which was “yet to be heard”.

Du Preez responds:

In the sidebar, the SARS application against Sharemax Investments was given as background information, being the most recent event that the reporter had discussed prior to the last report before the latest.

“I made inquiries as to whether the matter had been heard. It had not. The court file gives no indication that the matter has been settled.

“I accept that the matter has been settled, but to date I have not seen any public statement to the effect that it had been settled or what the terms of the settlement were. I do not believe that the terms of the settlement had ever been made public. I also know that the fact of or the terms of the settlement are not determinable from the court file or any public records. The only reference to a settlement that I could find was a statement on behalf of Sharemax Investments in November 2014 to the effect that settlement negotiations were at an advanced stage, but SARS, at the time, stated that no settlement had been reached.”

She says in order to ensure that fairness prevails, she made mention of the settlement in the publication of Saturday 9 May 2015. “I respectfully submit that this adequately disposes of this aspect of the complaint. “

NPG says it would like to know:

·         with whom PF possibly made enquiries, as both SARS’s and Sharemax’s representatives would have been able to confirm to PF that this matter had been settled. NPG does not believe PF made any effort to speak to anyone in this regard; and

·         why the journalist did not, in her correcting article, mention the other error, namely that the SARS matter had been settled.

My considerations

The full text, as referred to by Du Preez, reads:

In a report titled ‘Sharemax ruling tests ombud’s powers’, published in Personal Finance on April 18 this year, we erroneously stated that, in September last year, the South African Revenue Service (SARS) applied for the business rescue proceedings of Zambezi Holdings, a Sharemax property syndication, to be set aside because of non-compliance with the Companies Act. SARS in fact applied for the business rescue proceedings of Sharemax Investments to be terminated as a result of non-compliance with the Companies Act. Personal Finance regrets the error.

We have also learnt that SARS’s application, including that for the liquidation of Sharemax Investments, was settled in December 2014.

Unlike what NPG wants me to believe, the journalist did refer to the settlement.

Again, I am not going to ask PF to repeat its correction.

Finding

The complaint is dismissed, save for the part reading, “This contradicts a letter by a former director of Sharemax, Dominique Haese, sent to Sharemax investors informing them that the scheme of arrangement meant they no longer had a right to complain about their investments and that they would forfeit their rights in these should they pursue complaints to the ombud..

This sentence took a possibility and turned it into fact, which is in breach of Section 2.1 of the Press Code that states: “The press shall take care to report news truthfully, accurately and fairly.”

Seriousness of breaches

Under the headline Hierarchy of sanctions, Section 8 of our Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).

The breach of the Code as indicated above is a Tier 2 offence.

Sanction

Personal Finance is cautioned and directed to correct this mistake.

The headline should reflect the content of the text. A heading such as “Matter of Fact”, or something similar, is not acceptable.

The text should end with the words, “Visit www.presscouncil.org.za for the full finding.”

Appeal

Our Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.

Johan Retief

Press Ombudsman