FRED ARIJS15.03.2017

Joint Venture with RMB

in Plettenberg Bay

Projects

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DURING MY PRESENTATION PLEASE THINK ABOUT THE THOUSANDS AND THOUSANDS

FELLOW SOUTH AFRICANS ,WHO HAVE LOST THEIR HOUSES, ASSETS AND FUTURE

BECAUSE THEY DIDN’T HAVE:

• THE CAPACITY

• THE KNOWLEGDE

• THE MONEY

• COULDN’T AFFORT COMPETENT AND INDEPENDENT ATTORNEYS AND

ADVOCATS TO:

1. PROTECT THEIR RIGHTS

2. FIGHT THE BANKS TO PROTECT THEIR

ASSETS,FAMILY AND FUTURE

THIS CASE IS A FRAUDULENT CASE BASED ON THE COMPANY ACT (SEC163) WHICH STATES THAT:

RAND MERCHANT BANK (RMB) CASE

“ THE SHAREHOLDERS MAY NOT ACT OPPRESISIVELY AND UNFAIR TOWARDS

OTHER SHAREHOLDERS AND DIRECTORS”

“OPPRESIVE AND UNFAIR” BEING DISCRIBED BY COURT AS FOLLOWS:

– AN UNJUST OR HARSH OR TYRANNICAL OR BURDENSOME, OR

– INVOLVES AT LEAST AN ELEMENT OF LACK OF PROBITY OR FAIR DEALING, WITHHOLDING

INFORMATION, OR– A VISIBLE DEPARTURE FROM THE STANDARDS OF FAIR DEALING AND A VIOLATION OF THE

CONDITIONS OF FAIR PLAY ON WHICH EVERY SHAREHOLDER WHO ENTRUSTS HIS MONEY

TO A COMPANY IS ENTITLED TO RELY

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THIS CASE IS ABOUT

• LACK OF TRANSPARENCY

• LACK OF GOOD FAITH

• LACK OF PROBITY

• LACK OF FAIRNESS

• WITHOLDING OF CRUCIAL INFORMATION

• FINANCIAL GREED

INTRODUCTION

FRED ARIJS

• Up to 1995

INVESTMENT BANKER IN BELGIUM (KREDIETBANK – CENECA)

PROPERTY MANAGER

• SINCE 1997

PROPERTY DEVELOPMENT IN RSA

• 1998

EMIGRATED TO SOUTH AFRICA TO START UP A DEVELOPMENT

COMPANY.

LOOKING WITH WESGRO FOR INVESTMENT OPPORTUNITIES

IN THE WESTERN CAPE.

• 2004

PERMANENT RESIDENT

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WHALE ROCK (PLETTENBERG

BAY)

SANDERLINGS (PLETTENBERG

BAY)

CIRCULAR DRIVE (PE)

ASCOTT ESTATE (PE)

MOQUINI (MOSSELBAY)

• FROM 1999: INVESTMENTWITH BELGIAN INVESTORS IN DEVELOPMENTS

BINNENPLEIN (STELLENBOSCH)

• FROM 2010: MBO (MANAGEMENT BUY-OUT) AND STARTED AS INDEPENDENT DEVELOPER

• FROM 2008 – 2012: HONORARY BELGIUM CONSUL FOR THE EASTERN CAPE

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2007 – 2008 BUSINESS PROPOSAL FROM RMB IN PLETTENBERG BAY BY THE CHAIRMAN OF

FIRST RAND CREDIT COMMITTEE

1. LIGHTHOUSE SQUARE (SHOPPING CENTER – HOTEL – RESIDENTIAL DEVELOPMENT

PRIVATE INVESTORS

50%

2 DIRECTORS

RMB

50% + CASTING VOTE

2 DIRECTORS

LIGHTHOUSE SQUARE

2. SHOCKPROOF (HOTEL – RESIDENTIAL )

PRIVATE INVESTORS

50%

2 DIRECTORS

RMB

50% + CASTING VOTE

2 DIRECTORS

RMB

50% + CASTING VOTE

2 DIRECTORS

SHOCKPROOF INVESTMENT

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FINAL STRUCTURE FOR LIGHTHOUSE SQUARE AND SHOCKPROOF DEVELOPMENT

PRIVATE INVESTORS

50%

2 DIRECTORS

RMB HOLDCO 1

SHAREHOLDER

50%

LIGHTHOUSE SQUARE

IDENTICAL STRUCTURE FOR SHOCKPROOF

RMB BANK

FUNDING

2 DIRECTORS

+ CASTING VOTE

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INPUT RMB

1. LIGHTHOUSE SQUARE

2. SHOCKPROOF DEV

• FEASABILITY

• FUNDING 100%

• KNOW-HOW

• NETWORK

• EXPERIENCE AND REFERENCES

• EXIT STRATEGY

• KNOW- HOW IN HOSPITALITY INDUSTRY

• FUNDING 100%

• NETWORK

• EXPERIENCE AND REFERENCES

• EXIT STRATEGY

INPUT PRIVATE PARTNERS

LIGHTHOUSE SQUARE AND SHOCKPROOF DEV

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RMB GUARANTEED THE SUCCESS OF BOTH PROJECTS

PILLAR OF THE JOINT VENTURE (JV)

THE SHAREHOLDERS AGREEMENT

1. THE INTENTION TO DEVELOP THE PROJECTS

2. FIRST RAND VIA A FIRST REFUSAL TO FUND THE PROJECT AT THEIR BEST T&C’S

3. BOTH PARTIES WILL ACT IN GOOD FAITH

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THE RMB INPUT – EXPERIENCE AND GUARANTEED SUCCESS OFFERED BY RMB

WHAT WENT WRONG?

• Q4 2011 DIRECTOR’S MEETING : RMB DISCLOSED THAT THEY HAD ALREADY DECIDED TO PULL OUT OF

PROPERTY PROJECTS IN 2010.

• THE APPOINTED DIRECTORS REPRESENTING RMB-HOLDCO1 WERE RMB BANK

EMPLOYEES WHO STATED THAT RMB BANK WAS THE MANIFESTING

AGENT AND PARTNER IN THE PROJECTS - WHICH RMB DENIED UNDER OATH.

• IF THE RMB PULL OUT WOULD HAVE BEEN DISCLOSED IN 2010, MILIONS OF ABORTIVE COSTS AND

INTERESTS WOULD HAVE BEEN AVOIDED AND SAVED.

• CONFLICT OF INTEREST BY THE RMB DIRECTORS DURING THE PROJECT AND DURING THE EXIT

NEGOTIATIONS

• THE RMB DIRECTORS CHANGED THE CONSULTANT TEAM AND APPOINTED THE ARCHITECT (TWICE)

(= CASTING VOTE)

• THE RMB DIRECTOR MADE IT IMPOSSIBLE TO FIND ANOTHER PARTNER OR BANK TO TAKE OVER THE

LOANS DURING THE EXIT NEGOTIATIONS

• THE PRIVATE PARTNERS WERE LEFT BEHIND WITHOUT ANY DEVELOPMENT EXPERIENCE IN SHOPPING

CENTERS AND THE HOSPITALITY INDUSTRY.11

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AT NO TIME WERE THE PRIVATE PARTNERS IN ARREARS ON THE INTERESTS PAYMENTS IN LHS AND SP,

BUT RMB CALLED UP THE LOANS AND SURETIES

AS PER COMMUNICATION FROM RMB, THE LOANS WERE CALLED UP DUE TO:

• NO REPLACEMENT EQUITY PARTNER COULD BE ATTAINED WITH THE APPRPRIATE

EXPERIENCE

• THE POOR LIGHT IN WHICH RMB HAD PUT THE PROJECT DUE TO THEIR EXIT. THE RMB

DIRECTOR HAD NO POA TO NEGOCIATE WITH OTHER BANKS.

FURTHERMORE, RMB CALLED-UP THE LOANS AND SURETIES OF UNRELATED COMPANIES

BELONGING TO THE PRIVATE SHAREHOLDERS AFTER LITTIGATION FOR THE LHS PROJECT

COMMENCED IN AN ATTEMPT TO INTIMIDATE THE PRIVATE SHAREHOLDERS.

RMB CONFIRMED THAT THE LOANS AND SURETIES HAD BEEN CALLED UP

DUE TO THE LITTIGATION.

CONCEQUENCES IN LIGHTHOUSE SQUARE

• LITIGATION LHS AGAINST RMB BASED ON :

– BEING MISLEAD BY RMB ON THE JV STRUCTURE

– WITHOLDING INFORMATION AND LACK OF FAIRNESS

– IN CONFLICT WITH THE GOOD FAITH CLAUSE IN THE SHAREHOLDERS AGREEMENT

– LACK OF PROBITY AND TRANSPARENCY

– IN CONFLICT WITH THE COMPANY ACT

• SETTLEMENT FOR LIGHTHOUSE WAS NEGOTIATED IN 2014:

THE INVESTORS LOST THE FOLLOWING:

RMB - R 19 000 000 LOAN

- R 6 000 000 EQUITY

- LEGAL FEES

THE PRIVATE INVESTORS - LOST OF THE PROPOSED PROFITS

- LOSS OF EQUITY – INPUT R 6 000 000

- LEGAL COSTS13

RMB CALLED UP THE LOANS AND SURETIES OF OTHTER COMPANIES OF THE SHAREHOLDERS BECAUSE OF THE

LITIGATION.

LITTIGATION SP:

COMPAIRING THE DISCOVERY DOCUMENTS WE RECEIVED FROM THE LHS CASE

WITH THE STATEMENTS UNDER OATH DONE BY RMB FOR THE SP CASE WE

DISCOVERED CONTRADICTIONS WHICH POINT INTO THE DIRECTION OF

FRAUDE.

1. PARTNERSHIPS:

UNDER OATH RMB STATED THAT RMB WAS NOT THE PARTNER OR THE MANIFESTING AGENT, BUT THAT RMB HOLDCO1 WAS OUR PARTNER.

OUT OF THE DISCOVERY DOCUMENTS: THE MINUTES FROM THE CREDIT COMMITTEE, ATTENDED BY THE

RMB CEO, STATES THAT THE PROPERTY OF THE PROJECT MUST BE

TRANSFERED TO AN SPV (SPECIAL PURPOSE VERHICLE) IN WHICH

THE BANK WILL TAKE A 50% STAKE. THIS STATEMENT WAS

REPEATED IN OTHER CORRESPONDENCE. NO RESOLUTIONS CAN

BE FOUND IN THE RMB HOLDCO1 BOOKS THAT THEY WERE OUR

OPERATING PARTNER.

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• THE DIRECTORS WERE RMB EMPLOYEES

• UNDER OATH : RMB STATES THAT THEY

I. DON’T HAVE A RESOLUTION WHICH APPOINTS THEIR DIRECTORS

II. DON’T HAVE A RESOLUTION WHICH GAVE POA OR INSTRUCTIONS TO THEIR

DIRECTORS TO OPERATE AS DIRECTOR IN SP

III. DON’T HAVE ANY REPORTS OR FEEDBACK FROM THE RMB DIRECTORS TO

THE BANK OR RMB HOLDCO1

• FROM THE DISCOVERY DOCUMENTS

1. THE DIRECTORS WERE RMB EMPLOYEES AND WERE REMUNERATED AS DEALMAKERS.

2. THE RMB DIRECTORS ATTENDED THE MEETINGS OF THE RMB CREDIT COMMITTEE AND ADVISED THIS COMMITTEE ON THE LOANS – SPECIFICALLY THE EXTENSION AND CALL-UP OF THE LOANS.

3. THE RMB DIRECTORS SIGNED DOCUMENTS AS ADDENDUMS RELEVANT FOR CREDIT COMMITTEE.

4. THE RMB DIRECTORS ATTENDED THE CONSULTANT MEETINGS AND THE BOARD MEETINGS OF LHS AND SP.

2. DIRECTORS :

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• FROM THE DISCOVERY DOCUMENTS

THE RMB DIRECTORS USED THEIR CASTING VOTE TO:

- CONTROL THE PROJECT

- REFUSE TO PAY OUTSTANDING INVOICES DESPITE THE OTHER PARTNERS HAVING

ALREADY PAID

OTHER UNAUTHORISED EMPLOYEES OF RMB ATTENDED CONSULTANT MEETINGS AND

DIRECTORS MEETINGS

THE CHAIRMAN OF RMB CREDIT ATTENDED MEETINGS AND ADVISED ON THE

CONCEPT OF THE PROJECTS

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5. THE RMB DIRECTORS COMMUNICATED AND ADVISED DIRECTLY WITH THE CONSULTANTS WITHOUT HAVING INSTRUCTIONS

6. THE RMB DIRECTORS INSTRUCTED MAZARS DIRECTLY ON THE FINANCIAL STATEMENTS OF LHS AND SP

3. CONSULTANTS:

FROM THE DISCOVERY DOCUMENTS AND UNDER OATH IT IS CLEAR THAT:

• RMB WAS THE MANIFESTING AGENT & PARTNER.

• RMB HOLDCO1 IS AN SPV IN WHICH RMB ONLY PARKS ASSETS AND INVESTMENTS- NO

DEVELOPMENT ACTIVITY.• NO RESOLUTIONS, INSTRUCTIONS OR POA’S WERE FOUND OR GIVEN TO THE RMB DIRECTORS TO

OPERATE AS DIRECTORS IN LIGHTHOUSE AND SHOCKPROOF.

BUT THE CONSULTANT TEAM , THE SO CALLED A-TEAM OF RMB , WAS APPOINTED BY RMB DIRECTORS

BECAUSE OF THEIR CASTING VOTE.

4. SHAREHOLDERS AND LOAN AGREEMENTS

• BOTH AGREEMENTS ARE NOT VALID DUE TO THE LACK OF INSTRUCTIONS OR POA GIVEN TO THE RMB DIRECTOR BY RMB.

• FIRST RAND WAS BOUND BY THE SHAREHOLDERS AGREEMENT TO FINANCE LHS AND SP AT THEIR BEST T&C’S AND HAD A FIRST REFUSAL IF ANOTHER BANK COULD FINANCE AT BETTER T&C’S.

• FIRST RAND GAVE AN INTEREST FREE LOAN TO RMB HOLDCO1 WITHOUT SURETIES AND GUARANTEES ORAN INSTALMENT PLAN.

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5. TRANSPARENCY

FINANCIAL STATEMENT RMB HOLDCO1

• REFLECT THE ISSUING OF PREFERENCE SHARES TO FINANCE LHS AND SP INVESTMENTS.

• THE PREFERENCE SHARES WERE SUBSCRIBED BY RMB INVESTMENT AND ADVISORY , ANOTHER SPV

OF FIRST RAND.

• RMB HOLDCO1 CEDED THE RIGHTS ON HIS ASSETS TO WIND-UP THESE ASSETS IF THE DIVIDENDS

COULD’T BE PAID (= WHICH IS ILLEGAL).

• RMB HOLDCO1 GOT AN INTEREST FREE LOAN FROM FIRST RAND.

• RMB HOLDCO1 BOOKED A R 10 000 000 PROFIT ON THIS PREFERENCE SHARE TRANSACTION.

• SHAREHOLDERS NEEDED TO SIGN TEMPORARY SURETIES FOT THE START-UP OF THE PROJECTS,

WHICH WERE NEVER RELEASED.

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6. LIQUIDATION OF THE COMPANIES LIGHTHOUSE SQUARE AND SHOCKPROOF

BOTH COMPANIES WERE PUT ON LIQUIDATION BY RMB.

LIGHTHOUSE :

• A SETTLEMENT WAS FOUND AND AGREED BETWEEN THE TWO SHAREHOLDERS WHO SIGNED SURETY AND RMB.

• BASED ON THE STATEMENTS UNDER OATH IN THE SHOCKPROOF CASE, WE FOUND OUT THAT THERE WAS FRAUD

AND MISLEADING INVOLVED IN LIGHTHOUSE, BASED ON WHICH WE ARE REOPENING THIS CASE.

SHOCKPROOF :

THE BANK SOLD THE PROPERTIES BEHIND THE PRIVATE SHAREHOLDERS BACK AT A LOWER PRICE THAN WHAT

THE PRIVATE SHAREHOLDERS OFFERED TO SETTLE.

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CONCLUSION

• IT IS UNBELIEVEBLE AND UNACCEPTABLE THAT A STOCK LISTED COMPANY BREACHES SUCH

IMPORTANT RULES OF THE COMPANY ACT IN RELATION TO THE APPOINTMENT OF THEIR DIRECTORS,

THEIR P.O.A. AND THEIR FIDUCIAIRE DUTIES.

• IMPORTANT INFORMATION WAS WITHELD FROM THE PRIVATE SHAREHOLERS WITH REGARD TO

PULLING OUT OF PROJECTS BY THE RMB DIRECTOR.

• THE COMPANIES WERE NOT INFORMED THAT RMB WOULD NO LONGER FUND PROJECTS 100%.

• ALL ACTS AND REPRESENTATIONS OF THE COMPANIES BY THE RMB DIRECTOR WERE ILLEGAL AND

FRAUDULENT BECAUSE OF THE LACK OF WRITTEN INSTRUCTIONS AND POA’S.

• IT WAS ONLY BY GOING INTO LITIGATION THAT THE PRIVATE INVESTORS FOUND OUT THAT RMB

REPRESENTATION IN THE PROJECTS WAS NON-EXISTING AND MISLEADING FOR THIRD PARTIES

BECAUSE THERE WERE NOT RESOLUTIONS.

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SUGGESTIONS AND SOLUTIONS FOR THE FUTURE

• THE RIGHT FOR THE CLIENTS TO MAKE USE OF A PAYABLE AND PROFESSIONAL LEGAL TEAM IN

THEIR LITTIGATION AGAINST THE FINANCIAL INSTITUTIONS AND BANKS.

• THE CREATION OF A FUND WHICH CAN BE FUNDED BY THE BANKS BASED ON THEIR

COLLECTIONS OF BANK FEES FROM THEIR CLIENTS.

• A FUND SIMILAR TO NHRBC IN THE BUILDING SECTOR WHICH WARRANTS THE LEGAL RIGHTS OF

THE CLIENTS AGAINST THE BUILDERS.

• FULL TRANSPARENCY FROM THE BANK WITH REGARD TO THEIR PRODUCTS. THE CLIENT MUST

HAVE THE OPORTUNITY TO TRACE ALL DOCUMENTS AND COMMUNICATION. T&C’S WITH

REGARD TO HIS FILE/PRODUCTS.

• THE CREATION OF SUPPORT BASE/BUFFER TO ASSIST THE CLIENT WHEN THEY INCUR TEMPORARY

FINANCIAL DIFFICULTIES.

• THE COMPLETE RE-ORGANISATION OF FORE-CLOSSURES , RE-POSESSIONS AND FORCED PUBLIC

AUCTIONS IN FAVOUR OF THE CLIENTS.

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INFORMATION FROM THE RMB

DISCOVERY DOCUMENTS

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DOCUMENTS

RULE 35

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