High-flying developer takes a dive

Posted On Friday, 15 January 2010 02:00 Published by
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A part of high-flying developer Zunaid Moti’s once powerful property group, which reportedly owes Investec Private Bank over R1 billion, was provisionally liquidated.

By Adrienne Carlisle

A part of high-flying developer Zunaid Moti’s once powerful property group, which reportedly owes Investec Private Bank over R1 billion, was on Thursday provisionally liquidated by the Grahamstown High Court.

But the provisional liquidation of property development company 85 Grayston Drive Developments Pty Ltd, which forms part of Moti’s Abalengani Group of Companies, was not at the behest of Investec Bank, but of Johannesburg businessman Vivien Natasen.

And if Natasen has his way, the provisional liquidation is likely to seriously affect Investec Bank’s ability to recoup over R53 million the company owes it.

Natasen invested a deposit of R8.8m in one of Moti’s luxury Sandton property schemes and now wants his money back.

He says in court papers the company owned a 2 954m² property in Sandton encumbered by two mortgages registered in favour of Investec to the tune of R13.6m and R40m.

The company had intended erecting a “very exclusive” commercial office complex on the property.

Natasen had wanted to buy the entire third floor of the building for over R40m and invested a deposit of R8.8 million in 2006.

The building was never constructed and in 2008 Natasen obtained a court order declaring the sale agreement void and ordering that Moti’s company reimburse him the R8.8m.

But, in October last year, the Sunday Times published a report that Abalengani was unable to service a more than R1bn debt to Investec Bank and, in a settlement agreement, the bank reportedly took the bulk of the Moti family property business.

The Sandton property in which Natasen had invested was one of the properties handed over to Investec.

Investec then proposed to Natasen that if the property was sold by it for more than the value of the R53.6m mortgage bonds, Investec would use the surplus to pay him the R8.8m.

But Natasen said the undeveloped property was worth “no more than R12m” and there was therefore no prospect of him recovering any money in terms of the proposal.

Natasen points out in court papers that registration of the first and second bonds in favour of Investec Bank constituted a “disposition”.

He said in terms of the law, if a disposition of property was not made for the value of the property it could be set aside.

In this case, the mortgage bonds of over R53m by far outweighed the value of the undeveloped R12m property.

Natasen said if 85 Grayston Drive Developments was liquidated, the registration of the mortgage bonds stood to be set aside.

Investec would then have to wait in line with all the other creditors.

Judge Frank Kroon, who yesterday provisionally liquidated the company, ordered that it or any other “interested persons” should show cause why a final liquidation order should not be issued on February 18.

The application for the provisional liquidation was brought in the Eastern Cape because the Johannesburg- based businessman’s company is, for unknown reasons, registered in Cradock.

The application was unopposed. Advocate Dave De La Harpe, instructed by Nolte Smit attorneys, appeared for Natasen.

Source: Daily Dispatch

Publisher: I-Net Bridge
Source: I-Net Bridge

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