of interest and corporate governance have been raised as a result of R2m drawn last June from the bank account of property loan stock company Alpina. 

The payment seems to have been initiated by property promoter Niki Vontas, whom Alpina describes as its consultant.

Alpina CEO Bryan Smith told the FM this payment was to Fairvest to buy properties for Alpina and the paperwork was "regularised" in October.

Vontas says the R2m payment was completely above board. "We sold the property portfolio of Fairvest [of which Vontas is CEO] to Alpina, to be paid by issuing linked units [the loan stock equivalent of shares]. But the subsequent due diligence of Alpina showed it had fewer assets than were used to calculate the deal. So we repaid R2m to Fairvest in June."

This implies the paperwork was done then.

In a letter to the FM, Smith says: "A preliminary assessment suggested the value of assets in Gold Edge [the former name of Alpina] would reflect a shortfall of R2m. Pending determination of the value of the assets, the payment was structured in the form of a loan which was capable of being converted through an adjustment account as a reduction of the purchase consideration."

Besides the question of why a valuation takes so long, it is difficult to understand why the R2m payment could not have waited until the actual shortfall had been finalised.

Also, it is a mystery why a cash payment should have been made at all.

Why was the number of linked units issued to Fairvest not simply adjusted? Why have shareholders in Alpina and Fairvest not been told of such a material change in the deal?

Both Fairvest and Alpina are under cautionary and, says Smith, "we are not in a position to comment . . . Full disclosure on the transactions has been made in the past and will be made in further notices in late February."

The R2m was shown in the latest annual figures on Sens, he says. Vontas has a possible conflict of interest between his role as a consultant to Alpina (at R50 000/month) and his management of Fairvest.

Disillusioned Alpina associates claim Vontas has in effect been running Alpina and that Vontas drew the R2m from Alpina in June that was needed to cover the company's overheads and acquisitions.

Cape developer Charlie Banks of Gervest Projects, which had a joint venture with Alpina, says that at meetings with Alpina in July, it was clear Vontas "was in charge of the place". Vontas refused to sign documents, which killed a deal on three shops for the Score retail chain.

Vontas and Smith deny this.

Vontas says he is not a director and has no shares in Alpina. "I am concentrating on finalising the transfer of the Fairvest and Bonatla [another of his funds] portfolios to Alpina, then I am leaving for Europe in May to put together an offshore fund," says Vontas.

Alpina's cash needs are met by the income from its current property investments, adds Smith, who was appointed CEO in October 2003. He says Alpina believes at least one of the FM's sources to be a "begrudged vendor".

It's not the first time Vontas' s deal-making methods have come under the spotlight .

Why is Vontas able to act as a consultant to Alpina and remain CEO of Fairvest when there are transactions between the two businesses ?

The use of an intermediary company, Daisy Street, to buy the properties from Fairvest for Alpina adds another facet to the potential conflict.

Vontas has used other companies named Daisy Street to purchase properties for Fairvest and Bonatla.

He usually discloses an interest, but this time he has not.

Listed fund managers say it is not necessary to use such an intermediary, and few do. What was the commission Vontas gained from these transactions, or is his fee from Alpina his only payment?

Shareholders should be insisting on answers.

But that raises the question of who actually controls Alpina.