{"id":891,"date":"2017-05-17T08:57:51","date_gmt":"2017-05-17T06:57:51","guid":{"rendered":"http:\/\/hsaction.co.za\/?p=891"},"modified":"2018-07-02T22:08:43","modified_gmt":"2018-07-02T20:08:43","slug":"georgiou-to-appeal-judgements-on-sabotage-of-class-action","status":"publish","type":"post","link":"https:\/\/hsaction.co.za\/?p=891","title":{"rendered":"Georgiou to appeal judgements on \u2018sabotage\u2019 of class action"},"content":{"rendered":"

Orthotouch continues to selectively settle \u2018vocal\u2019 investors\u2019 claims.<\/p>\n

Property magnate Nic Georgiou has asked for leave to appeal against two High Court judgements that found he not only acted unethically, but also tried to abuse the court process to scuttle the class action application by members of the Highveld Syndication Action Group (HSAG).<\/p>\n

The judgements were scathing of Georgiou\u2019s conduct, which saw him secretly settle the claims of the six applicants who represented 7 000 HSAG members in an application for certification of the class action.<\/p>\n

Several conditions were evidently attached to the secretive settlements, including that the six applicants must appoint new attorneys and withdraw their original application for a class action certification \u2013 a step that would in effect bring an end to the class action application.<\/p>\n

All of this was done without notifying the HSAG legal team.<\/p>\n

In the application for leave to appeal, Georgiou sets out several technical arguments as to why these judgements were erroneous and that another court could come to another conclusion. These technical arguments include that Theron & Partners did not have a mandate to represent HSAG investors and that the law firm did not comply with discovery notices to expose the identity and financial contributions of HSAG members to Georgiou and Orthotouch. Read the full application here<\/a>.<\/p>\n

In the two judgements, which can be read here<\/a> and here<\/a>, Judge Mohamed Ismail of the South Gauteng High Court said Georgiou\u2019s conduct was nothing more than \u201can act to sabotage the claim of the other investors\u201d while Judge Murphy of the North Gauteng High Court said Georgiou abused the court process to leave the other members of the class action \u201chigh and dry\u201d.<\/p>\n

Jacques Theron, legal representative of the HSAG, described the application as a further delaying tactic to \u201cto frustrate the class action which increases the costs of the matters.\u201d He added that Georgiou and Orthotouch did \u201ceverything in their power to delay matters to appeal, in one year filing six interlocutory applications of which two were already dismissed by the Supreme Court of Appeal.\u201d<\/p>\n

Offers on the table<\/strong><\/p>\n

Georgiou also failed to settle the claims of around 800 of the 7 000 HSAG investors who accepted his 50% settlement offer. He offered to repay 50% of the investors\u2019 original investments in ten instalments over three-and-a-half years.<\/p>\n

Georgiou has not provided reasons for not doing so and did not respond to a Moneyweb request that he explain his decision.<\/p>\n

HSAG steering committee member Johan Stander recently wrote a letter<\/a> to Georgiou regarding this development and stated that not only did Georgiou not sign the agreements, he also reneged on a commitment to table an improved offer by the end of April. Stander confirmed that the HSAG had suspended further negotiations.<\/p>\n

The offer was made to non-HSAG members too, but it is uncertain how many investors were actually settled.\u00a0In a statement issued on March 31<\/a>,\u00a0Orthotouch markets the offer but does not state what the uptake is.<\/p>\n

Individual settlements<\/strong><\/p>\n

Moneyweb has confirmed that Georgiou continues to target and selectively settle the claims of individuals \u2013 especially those that publicly criticise him and Orthotouch. For example: Elna Visagie, a former HSAG Steering Committee member, who actively promoted the class action to investors, supports Georgiou after Orthotouch had offered her employment.<\/p>\n

Georgiou and Visagie visited an investor in her home in Cape Town to settle her claim. This investor, who wanted to stay anonymous, is a stern supporter of the HSAG and actively criticises Georgiou and Orthotouch on social media platforms.<\/p>\n

During this meeting, both Georgiou and Visagie offered to settle her claim if she undertook to discontinue her public criticism of Georgiou and Orthotouch. The investor also said that Georgiou and Visagie were extremely disparaging about the HSAG and Theron and accused Theron of financially exploiting HSAG members.<\/p>\n

The investor alleges that Georgiou said he did not sign the 800 HSAG settlement agreements due to Theron & Partners \u201cmoving the goalposts\u201d by demanding that he pay exorbitant legal fees.<\/p>\n

Jacques Theron\u00a0rejected these allegations as false and misleading. In a statement, the HSAG states: \u201cThe contribution for costs requested so far is nominal and merely a fraction of the R4.8 billion case against Mr Nic Georgiou and others. Thanks to the size of the HSAG, and since August 2014, the HSAG has requested less than R1 per syndication, per day from its members as contribution towards legal costs.<\/p>\n

Unfortunately, because most members are elderly people (with an average age of 75) who invested all their life savings in the HS Companies, a large number of them were unable to make such a nominal contribution.\u201d<\/p>\n

Theron also referred to Visagie and other former supporters of the HSAG \u201cwho were either bought by Mr Nic Georgiou or employed by him\/Orthotouch. These people operate actively on social media to create unnecessary suspicion and confusion among the HSAG members, of which the majority is frail and vulnerable.\u201d<\/p>\n

Settlement offers<\/strong><\/p>\n

From discussions with investors, the HSAG and Visagie it seems as if investors have the following options:<\/p>\n