Independent auditors IAPA Johannesburg have reported that "procedures in the issuing of loans to directors" by property loan stock company Alpina Investments were in contravention of the Companies Act.

But Niki Vontas, consultant to Alpina Investments, formerly Gold Edge Holdings, said yesterday there was nothing "sinister" about the transaction, explaining the loan was of a technical nature.

"Without qualifying our opinion above, we draw attention to the fact that the procedures in the issue of loans to directors as required by section 226 of the Companies Act in SA were not complied with," said the auditors.

The auditors' comments appeared in the abridged reported on Alpina's audited group financial results.

Explaining how the "loan" occurred, Vontas said the company had bought a property belonging to a company controlled by a former director.

He said it was bought in May last year. Although bond repayments of R50000 were being made by Gold Edge, as Alpina was then known, the property had not yet been transferred.

"Because the property was not transferred, paying the bond basically constituted a loan to a director. It was a loan of a technical nature," said Vontas.

Business Day 24 December 2003