By Rob Rose

Bonatla, the beleaguered property firm founded by the enigmatic Niki Vontas, would do well to consider Albert Einstein's maxim that whoever is careless with the truth in small matters cannot be trusted with the important matters.

The company is struggling to re-establish itself after being forced to its knees in 2003.

But this is tricky: there is no little scepticism about Bonatla, not least because Vontas was sequestrated in 2004 over R75m in debt he owed to people who had sold properties to Bonatla.

For this reason, Vontas is barred from being a director, but he remains a "consultant" to CDA Property Consultants, which manages Bonatla's assets and is run by his wife, Carolyn Douglas.

But it seems if Bonatla was looking to glean anything from Einstein, it stopped as soon as it heard about relativity.

Now, it seems a scandal may be brewing over how Bonatla announced a slew of eight deals on January 25, yet, unbeknown to shareholders, some of these deals have simply slid off the table.

This is important because when Bonatla announced the eight deals, its shares vaulted 23%, as cock-a-hoop investors responded to the picture that was painted of a dynamic company set for dynamite earnings.

Among those deals, Bonatla said it was buying "Motseng House" on Rivonia Boulevard for R6m from Gemini Moon Trading 177, and "Bay Terrace Views" in Durban from VLC Commercial and Industrial for R17,5m.

On February 23 , Bonatla said it was also buying Dalefern Properties for R131m.

A few weeks later, Bonatla told shareholders it had rejigged the deal, and would now buy Gemini Moon entirely (giving it Motseng House).

But not to worry, it said, the Gemini Moon deal was in the bag from the "effective date of 12 February". (Bonatla's shares rose 5,9% that day).

Bonatla reiterated in its annual report in March that the deal was "concluded".

So you can imagine the Groundhog Day experience that hit Bonatla investors when they happened to stumble across a notice in early May from auctioneers Aucor, saying that Motseng House was to be auctioned.

But the seller wasn't Bonatla - it was Gemini Moon. And a deed search shows that, more correctly, the seller was Gemini's subsidiary, New Adventure 72.

On Thursday, Motseng House sold on auction for R7m at the Killarney Country Club. One eagle-eye investor named Nathan Hittler saw Aucor's notice and wasn't impressed. Hadn't Bonatla already bought Motseng House, he asked Bonatla's directors? Why was Gemini Moon now the seller?

But Bonatla's response to these questions was sneaky.

On May 17, Bonatla announced it was doing another deal, to buy 51% of the South African Property Growth Fund for R14m. Its stock climbed 20% to 48c after the announcement. But buried in that announcement was a sheepish paragraph on "lapsed transactions", which said simply that "the transactions ... regarding the acquisitions of Gemini Moon Trading 177, and Dalefern Property ... have lapsed as the respective conditions precedent ... were not met".

So, the deal that shareholders were told was in the bag never took place, it seems.

Now if the JSE ever asks Bonatla about this, they might want to also inquire why Bonatla never issued a "detailed circular" about the eight deals, as they were supposed to do under JSE rules.

So what exactly is going on?

In a meeting I had over the weekend with Vontas and CEO Robin Rainer, they point to a disclaimer in the annual report, which said all deals were subject to "appropriate funding". They say the Gemini Moon deal didn't happen because the banks wouldn't bond the properties. Maybe so, but why then announce the Gemini Moon property deal as signed and sealed?

And things get more mysterious. Bonatla's asset manager is CDA Property Consultants, which is run by Carolyn Douglas. Until March 28, Douglas was a nonexecutive director of Bonatla. But Douglas, it has emerged, now owns Gemini Moon 177 - the seller of Motseng House.

On closer inspection, it turns out that Bonatla has a long-standing relationship with Gemini Moon, which wasn't explained in the January announcement.

Trawling the notes in Bonatla's annual report shows that last year, Gemini Moon bought 19 dormant companies from Bonatla for a total of R4719.

Notably, the companies that Gemini Moon bought from Bonatla included New Adventures 72 (which owned Motseng House until last week) and VLC Commercial and Industrial Properties.

But Vontas is adamant that all those subsidiaries were empty "shell companies" when Gemini Moon bought them from Bonatla.

"They had no assets or value when Bonatla sold them, and the properties they now have (like Motseng House) were injected into them after the sale," he said.

Now VLC, you might remember, was meant to sell Bay Terrace Views to Bonatla for R17,5m.

But according to Vontas, the VLC deal has also fallen off the table because Bonatla didn't like what it saw in the due diligence.

When asked why the Gemini Moon relationship wasn't disclosed, Douglas said she only took over the shareholding of Gemini Moon in May (after she quit as a Bonatla director), and had no interest in it before that.

However, Companies Registrar records shows she was a director of Gemini Moon until 2005, when she quit.

According to Douglas, when Bonatla couldn't get a bond to buy Gemini Moon, she decided to auction Motseng House and "loan" the proceeds to Bonatla to prop up its stuttering cash flows.

But this all looks very shaky.

A deed search on Motseng House shows the property changed hands various times in recent years, from New Adventure in 1997, to Ixia Trading in 2004, then to Gemini Moon in 2006, and then to New Adventures again in October.

Given that Bonatla owned New Adventures 72 during the time it held Motseng House between 1997 and 2004, this suggests an interesting helix.

And shareholders who saw the January announcement wouldn't have known about the links.

The JSE ought to ask for some answers about the disclosure of this web, and query why Bonatla feels it can say deals are done, which haven't been finalised.

If the dimly-lit Gemini Moon sparks so many queries, what else lies beneath Bonatla's shadow?

Business Day