Business Day : 7 September 1999 : (Refcorp staggers under cash
"Controversial venture capital company REF Finance and Investment
Corporation (Refcorp) is staggering under major cash flow problems that
could lead to its liquidation.
Former employees who did not wish to be named have said they have not
been paid for more than two months and that this was just the tip of the
iceberg. The company is apparently also about R4m behind on
pay-as-you earn(PAYE) tax remittances to the Receiver of
Five directors have left the company over the past couple of months for a
variety of reasons which included the nonpayment of salaries.
One employee said the problem with Refcorp was not so much the listed
entity but the underlying, non-listed companies that were draining the
parent’s accounts, balance sheet.
The Johannesburg Stock Exchange (JSE) is believed to be investigating
Refcorp and has already interrogated some former directors.
Refcorp was warned by the JSE last week for failing to submit annual financial
statements within six months of the financial year-end. Refcorp deputy
chairman Ivan Penny pleads that the group’s financial director had to go on
maternity leave three weeks sooner than expected and that results would be
David Romero, who headed Refcorp,
a key investor in the laughably named Noble Minerals, is probably one
of the worst managers of expectations. Minority shareholders lost their money within days of Noble's listing as the price sank to 1c from a R2/share maiden listing.
Financial adviser says he is not a crook
By Eddie Botha Business Editor
EAST LONDON - Hannes Brink, the financial adviser who is blamed by more than 50 investors for their R10 million losses, says he is not a crook.
Instead Nimrod Financial & Tax Consultants CC's Brink has fingered as the culprits his former partner, David Romero, head of finance company REF Equity Finance, into which the funds were invested, and Ivan Penny, an REF director.
this week the Daily Dispatch reported that the National Prosecuting
Authority in Pretoria had confirmed that an investigation into the
financial scheme was almost complete.
Many investors, among them
pensioners, have lost their life savings in the scheme, and subsequent
to this week's report many more called the newspaper to say that they
too had lost large amounts of money.
Daily Dispatch first reported about the failed scheme in 2001 when
Amalinda pensioners Carl and Rosemary Hill, who invested and lost
R100000 - their life savings - approached the paper.
Brink, who now lives in Nelspruit with his common-law wife and business
partner Linden Kelly, denied any responsibility.
contacted in Pretoria he first said that the target of the
investigation was REF Equity Finance, the unlisted company in which he
invested the funds.
Later, in a second telephone call to him, Brink said that he was not aware of a current police investigation into the failed investments.
said, though, he had given investigators copies of all the documents -
"but that was three years ago. I have not heard any word from them since
Brink said he had merely acted as an agent for the investment company.
"They (the investors) bought the shares (in REF) through me."
Brink said he would be willing to give evidence if required to do so, adding: "I have also lost between R600000 and R700000 with REF.
"The problem lies with the people who handled the portfolio, Romero and Penny," he said."I have done nothing wrong."
Brink added that he did not understand what the sudden fuss was about - over events that took place six years ago.
said he had sold the Ntoni Game reserve, which he had owned in the
Cradock district, to King William's Town businessman Eddie Goetsch, the
owner of the Buildrite hardware group.
REF also bought a 50 percent stake in Ntoni.
one stage when Romero wrote to Eddie Leach - a retired contractor who
lost over R210000 in Brink's scheme- to explain the delays in dividend
payouts, he used stationery with the stamps of Nimrod and Ntoni.
REF was suspended from the JSE Securities Exchange in 2003 for failing to produce financial statements.
to a Business Day report in the final quarter of last year shareholders
had been trying to contact the company since its suspension - but
telephone calls and e-mails went answered.
The report also said that United States-based businessman Albert de Lint
had written to Trade and Industry Minister Alec Erwin asking him to
warn South African investors to steer clear of Romero, saying: "We must
conclude that investors will soon face the reality that there won't be
funds to pay them back."
Gullan and Gullan allege that Noble's previous corporate adviser, REF
Finance and Investment Corporation as represented by David Romero and
Ivan Penny, was "unable to pay over approximately R6.25-million of shareholders' funds which they collected on behalf of the company".
report says Romero and Penny, a director of Noble until February,
signed an acknowledgement of debt to Noble in their personal capacities
and as directors of Refcorp and other related companies.