In the News

17
Oct

Klopper, Orthotouch appeal to SCA a delaying tactic

Photo: Mr Nic Georgiou

South Africa

Claim that Klopper’s application is aimed to keep investor information private questioned.

Ryk van Niekerk  /  17 October 2016 00:01

The application for leave to appeal to the Supreme Court of Appeal (SCA) by the business rescue practitioner of the failed Highveld Syndication (HS) companies, Hans Klopper, is not in the interest of historic HS investors. The application, as well as a similar application by Orthotouch itself, is only aimed to delay and frustrate investors who are bringing a class action against property tycoon Nic Georgiou.

Klopper is also less than truthful in his answers to several Moneyweb questions regarding his application to the SCA, as they do not mirror the arguments he set out under oath in his affidavit in support of the application.

These are the views of attorney Jacques Theron, head of the legal team acting for the management committee of the Highveld Syndication Action Group (HSAG), the group that wants to have the scheme of arrangement approved in 2014 set aside and to institute the class action to recover their investments from Orthotouch and Georgiou.

The HSAG is in the process of challenging the legality of the controversial scheme of arrangement and instituting a class action suit against Georgiou and Orthotouch. They will also be defending the applications of Orthotouch and Klopper.

Klopper said over the weekend that there seems to be “a misconception” that his role as the business rescue practitioner is to protect only the interests of investors in the various companies and more particularly those who support the so-called class action. “I am of the view that this perception is incorrect as a business rescue practitioner’s duty is to balance the interests of all relevant stakeholders, which include the company itself, employees, organised labour, creditors and shareholders.”

Klopper added that “whilst we have been told that there are many investors who support the class action and who identify themselves with the Highveld Syndication Action Group, there are also thousands of investors who do not support the class action and whose interests I need to acknowledge as equally important. I therefore repeat that as my duty remains to balance all of these groups of interests it need not be specifically spelled out in an affidavit. l was in (any) event advised at the time that the issue of the protection of investors’ information was already contained in Mr Kleovoulou’s affidavit.”

Klopper refers to an affidavit of Panagiotis Kleovoulou, a director of Orthotouch, which forms part of Orhtotouch’s SCA application for leave to appeal.

Read Klopper’s affidavit in support of the application to the SCA.

Read the affidavit of Panagiotis Kleovoulou, a director of Ortotouch.

Theron was also unhappy with Klopper’s answer to a previous Moneyweb question as to why he brought the application. Klopper said to Moneyweb he launched the application to, in essence, protect the private information of investors.

Theron said this is “absolute nonsense”. “Protection of private information was never an issue, and still is not an issue – even in his current (16-page) affidavit to the SCA.”

In reaction , Klopper said he did not deal with this issue in his affidavit, as Kleovoulou referred to this in his affidavit. “There was therefore no need for me to also deal in my affidavit with my obvious duty to balance the interest of affected persons as opposed to only act in the interest of one group”.

Theron also said that Klopper only offers technical or procedural reasons as to why the order should not have been granted. “Nowhere does he deal with the merits of the granting of the order. He does not even try to give one reason why this order is not in the interest of the investors, or even not in his own interest. Klopper is clearly out to delay matters and to frustrate the investors who are bringing the class action.”

Publisher: Moneyweb | Ryk van Niekerk | 17 October 2016