Another slap in the face for Nova investors

Property group breaches Companies Act by again failing to publish its annual financial statements within six months.
It seems the only beneficiaries of Nova staying in business are its chair Connie Myburgh and CEO Dominique Haese, who continue to earn millions. Image (The Villa mall in Pretoria): Moneyweb

After the publication of the article, Connie Myburgh, Nova’s chairperson, sent an email to Moneyweb disputing the statement that the Companies Act prescribes that companies must “publish” their annual financial statements within six months and that auditors are required to file a Reportable Irregularity with Irba. Mr Myburgh also alleges Nova, despite losing the Beneficio court case and being denied leave to appeal, does not have to write back an amount of R19.3 million already accounted as income in a previous financial year, as the company applied to the SCA for leave to appeal.

Moneyweb stands by the story. Read Myburgh’s complete response below the article.

Also, after the publication of the article, Theo Rautenbach of ARC Inc responded to questions. His response appears at the end of the article.


The Nova Property Group has, for the seventh consecutive year, failed to publish its financial statements within the six months prescribed by the Companies Act.

It is a breach of the act and a slap in the face for the 18 600 former Sharemax investors who remain in the dark as to whether Nova is in a financial position to repay them anytime soon.

Read: Two offers for 70% of ‘tombstone’ mall

This follows Nova’s board in December 2021 unilaterally postponing the repayment of investors beyond the 10-year period specified in the Section 311 Schemes of Arrangement (SoA), claiming it had the authority to do so.

The SoA specified that Nova had to repay investors by January 2022, a view supported by the Companies and Intellectual Property Commission (CIPC) and Nova’s auditors at the time.

Today, 20 months later, the board has not communicated any information to debenture holders about when and if they will ever be repaid.

In response to Moneyweb questions, Nova chair Connie Myburgh said two weeks after the missed deadline that “the financials will be published as soon as the audit has been completed”.

“We expect this to happen soon.”

Myburgh also said, in response to a question regarding the lack of communication, that Nova “will communicate with interested parties when we deem fit”.

No reportable irregularity filed

Moneyweb can also confirm that as at 14 September, Nova’s auditors – ARC Chartered Accountants Incorporated – had not filed a Reportable Irregularity (RI) with the Independent Regulatory Board for Auditors (Irba) regarding the breach and contravention of the act.

This is notable, especially in the context of Nova’s purpose to repay investors and this being the seventh year running that Nova has breached the act.

It is ARC’s first year as auditor and Nova’s fifth auditor in seven years.

ARC did not respond to questions as to why it has not filed an RI. (Subsequent to the publication of the article, Theo Rautenbach of ARC Inc. responded. The full response appears at the end of the article.)

Lack of corrective action of ‘serious concern’

In response to questions related to the late publication of the 2023 annual financial statements (AFS), Jean Pierre Tromp, the trustee of the Nova Debenture Trust, said: “Seeing that for the last five years there is a pattern of AFS being signed off late, some almost 12 months late, it is therefore a serious concern that management is seemingly not attempting to implement corrective measures and proper internal procedures to ensure the Group prepare AFS within six months as required by section 30 of the Companies Act.”

Iva Kautsky’s father invested almost R1m in the syndication schemes and committed suicide in front of the Sharemax offices in July 2013. Image: Moneyweb

Nova’s financial position?

The 2023 AFS will give debenture holders the first glimpse of Nova’s financial position and ability to repay them.

The latest financial information available to the public is for Nova’s 2022 financial year, which ended on 28 February 2022 – more than 18 months ago.

Geyser & Du Plessis, the auditors at the time, slapped an adverse audit opinion on the 2022 AFS, which means the auditors believed the statements contained misstatements and did not accurately reflect the company’s financial position.

It was the second consecutive adverse opinion, which, in essence, means the 2022 AFS is not worth the paper it is written on.

One of the reasons for the adverse audit opinion was Geyser & Du Plessis’s view that Nova’s valuation of its property portfolio of R2.17 billion could be overstated by as much as R1.48 billion.

The 2022 AFS showed Nova faced significant cash flow problems and only remained in business by using the proceeds of the sale of properties to pay operating expenses.

Geyser & Du Plessis also warned that “significant doubt” exists as to whether Nova could continue to operate as a going concern, the fifth consecutive such warning from Nova’s auditors.

Nova’s board disagreed with the auditor’s opinions and claimed the company was “in a sound financial position”.

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Liquidation application

Another development earlier this year indicates that Nova may have severe cash flow challenges.

The Quatro Group, which provides various services to Nova’s shopping centres, applied for the winding up of 12 of Nova’s subsidiary companies as Nova failed to pay the R13.84 million it claimed was due. However, the parties concluded a settlement agreement, which terminated the winding-up proceedings.

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Developments that will influence the 2023 AFS

Several other developments transpired over the past 18 months, which should affect its 2023 AFS.

The most notable is a Pretoria High Court judgment, which ordered Nova to pay a bridging finance provider, Beneficio, R31.4 million. Nova must, from May, also pay interest on this amount at 1% or R314 000 per week.

The case stems back to 2017 and 2018, when Nova borrowed R55.2 million from Beneficio at an interest rate of 1% per week, as commercial banks refused to extend loans to the company.

Beneficio sued Nova in June 2020 for R31.4 million after Nova failed to keep up with payments. In turn, Nova countersued Beneficio for R19.3 million for alleged overpayments, arguing that the 1% interest rate was unlawful and usurious.

Almost bizarrely, Nova stated in its 2021 AFS that there was “virtual certainty” that it would win the case and accounted for its R19.3 million counterclaim as income.

No provision was made regarding the possible loss of the case.

Nova lost the case (with a punitive cost order against it), which means it will have to write back the R19.3 million and provide for the payment of the R31.4 million and interest to Beneficio.

This may therefore result in a R51 million negative swing in Nova’s financial position.

The case may also see Nova lose two properties (Tarentaal Centre and Village Mall ) in Nelspruit. Beneficio registered bonds over the properties as security for their loans, and the judgment allowed for the immediate sale of the properties.

The sheriff of the court has already seized the properties, but an auction has been halted as Nova approached the Supreme Court of Appeal for leave to appeal, as its earlier application for leave to appeal to the high court was dismissed.

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Nova chair Connie Myburgh (left) and CEO Dominique Haese. Image: Moneyweb


It seems the only beneficiaries of Nova staying in business are Myburgh and Nova CEO Dominique Haese.

They each earned nearly R4.5 million in the 2022 financial year.

Since the inception of the SoA in 2012, Myburgh has earned R40.5 million and Haese R41.5 million.

These amounts are now higher, as they exclude the remuneration they have received over the past 18 months – the extent of which will only be revealed in the 2023 AFS.

Nova has previously stated that its executive remuneration is market-related.

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After the publication of the article, Connie Myburgh, Nova’s chairperson, sent the following email to Moneyweb:

Mr van Niekerk.

In your article published this morning, you state that the Nova Group “failed to publish” (my emphasis) its financial statements within six months as prescribed by the Companies Act and that this is “a breach of the act” (my emphasis). You also state that this has happened for “the seventh consecutive year” (my emphasis).

Please advise where, with reference to specific sections or regulations, in the Companies Act, it is prescribed that a company must “publish” its financial statements within six months.

You also state that ARC had not filed a RI with IRBA “regarding the breach and contravention  of the act” (my emphasis). This “breach and contravention” clearly relates to your statement that the Nova Group had to “publish” its financial statements within six months and failed to do so.

Please advise where, and with reference to applicable rules, regulations, or legislation, ARC was obliged to file a RI regarding your alleged failure by the Nova Group to “publish” its financial statements within six months

You are incorrect in your interpretation of the provisions of the Companies Act and any other applicable rules or regulations.

You also create the impression that the Nova Group now has to write back the R19.3 Million and is indebted to Beneficio in the amount of R31.4 Million, without you taking into account the fact that the Judgement and these purported effects of the Judgement, are pended due to the lodging of the application to the SCA for leave to appeal, which application you are well aware of as appears from your article and as advised to you by me on 13 September 2023.

We require you to publish immediate retractions, rectifications, and apologies.

Connie Myburgh.

Nova Property Group.


Moneyweb response:

Moneyweb stands by the story due to the provisions contained in the Companies Act, Irba guidelines and accounting standards:

  • Section 30 of the Companies Act specifies that companies must publish AFS within six months.
  • Annexure 7 of IRBA’s Revised Guide for Registered Auditors: Reportable irregularities in terms of the Auditing Profession Act list many conditions under which circumstances they must file RIs when AFS is not published within six months. The following two are relevant:
    • Is there a history of late preparation of the annual financial statements, or is this the first year in which these annual financial statements are late? (Nova has published its AFS late for seven consecutive years)
    • Does the company have external debt, and do the external financiers have a right of access to the annual financial statements? (Nova was established to repay the debenture holders.)
  • IAS 10 and IAS 37 provide guidelines for how companies must account for post-balance sheet events.


ARC Inc Response

Also, after the publication of the article, Theo Rautenbach of ARC Inc responded to questions. His response appears at the end of the article.

Good day Mr. Van Niekerk.

In response to the matters referred to in your mail:

  • Our understanding of Section 30 of the Act is that:
    • “Each year, a company must prepare annual financial statements within six months after the end of its financial year, or such shorter period as may be appropriate to provide the required notice of an annual general meeting in terms of section 61 (7).”
    • To this end, we can confirm that the Nova Group prepared financial statements before the 31st August 2023. Same was provided to ARC for audit before 31 August 2023.
  • Reportable irregularity:
    • We did not inform IRBA of a RI as we did not deem it necessary to do so given the aforementioned.
    • In addition, and in accordance with IRBA’s guidelines on the existence of a reportable irregularities, where “A company has failed to prepare annual financial statements within six months of its year end” is not necessarily a reportable irregularity – please see attached extract from IRBA’s guidelines.
    • We are aware of the fact that it states that “This example demonstrates the nature of considerations which should be undertaken before deciding whether a set of facts and circumstances constitute a reportable irregularity” and further that it might “possibly” be a RI, but then the Company had to fail to prepare financial statements within six months of its financial year-end, which was not the case with the Nova Group.

We trust that you will find the above in order.

Yours faithfully

Theo Rautenbach CA(SA)





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The way that investors are fleeced here is incredible and beyond criminal.

This sham is being kept alive purely so that two so-called executives can continue to collect their “market-related” remuneration. I wonder if they would earn such (or any) salary anywhere else. I would not trust them to run a bath, much less a company in a fiduciary a fiduciary capacity.

ARC must bitterly regret the day that they accepted the appointment as auditor. Thanks to this article, I bet they are hastily filing that RI this morning. It not, the partner should bear in mind that he has some personal liability exposure here.

The auditor needs to be very careful here. The CIPC is looking at Nova through a massive magnifying glass. Their accounting must be beyond reproach given what has happened over the past years.

The authorities should also look at the 1% loan as it could be a classic case of reckless trading. If a property company cannot get loans from a commercial bank, it says alot about its commercial viability.
Nova also received two consecutive adverse audit opinions. There are many state-owned enterprises that didn’t get adverse opinions.

ARC is also Nova’s 5th auditor in 7 years. That is a massive red flag as it indicates Nova doesn’t want new auditors every year to potentially hide stuff. Or, the auditors just cannot work with the Nova board.

ARC, be careful.

In the above article the word “earned” does some very heavy lifting.

The obscene director salaries paid are not the only way debenture holders lose money. Consider the mountain of litigation the directors have engaged in on poor Nova’s behalf. Who gets this legal work?

So, Mr Myburgh alleges that the Companies Act does not require Nova to publish its annual financial statements within six months.
Section 30 of the Act states:

“30. (1) Each year, a company must prepare annual financial statements within six months after the end of its financial year, or such shorter period as may be appropriate…”

I don’t think it can be any clearer than it already is.

And for the filing of the RI? ARC should be very careful and very cautious when it considers regulatory issues related to a serial offender like Nova. Seven consecutive late filings?

And the statement that there is no need to reverse the R19.3m and provide for the fine because it applied for leave to appeal to the SCA. On what planet does Mr Myburgh live? Certainly not on Planet Proper Accounting Rules! The amounts are material as Nova does not have the cash to pay it.

ARC, be very careful. If the R19.3 million is not reversed and the R31.4m not provisioned for, the AFS will be a misstatement of Nova’s financial position and deserves an adverse opinion.

“We require you to publish immediate retractions, rectifications, and apologies.”

Or what?

End of comments.



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