SCORES of investors, including widows and pensioners, have accused a Durban-based public property investment company of short-changing them.
Investors alleged that Amaanat Investment Holdings (AIH), which had been created to ensure financial security for members of the Muslim community, but refused to buy back their shares when they decided to sever ties.
They want out of the company because it allegedly short-changed them on their investment returns, allegedly breached Sharia Law and invested their funds in companies they claim to be sloppy, behind their backs and without their consent.
The investors claimed they had been promised monthly returns of 17% when they joined as minority shareholders, but that figure dropped to 6% and now they are only getting 2%.
Their appeal to withdraw their investments has fallen on deaf ears, they claimed.
AIH’s acting chief executive officer Junaid Limalia said the aggrieved investors were forcing the company to breach legally binding agreements or contracts they signed when they invested their funds.
“They signed the contract knowing full well that it is a property company that is subject to economic conditions of the property sector,” Limalia said.
He said that in previous years, the company lost money through corrupt acts of the previous board members and the current board was trying to stabilise the company.
Limalia said returning the money to the investors was not simple because it was an investment on property through an equity-linked share, which depended on the performance of the investment.
Investors said that after receiving media queries, the board’s chairperson, Hassim Randeree, had sent correspondence to the shareholders, stating that it wasn’t their policy “to ventilate company and shareholder matters in a public forum’.
He said an adverse narrative was shared with media outlets, including inaccuracies, which tarnished the company’s reputation, and they were required to provided responses.
“Amaanat’s policy is not to ventilate company and shareholder matters in a public forum, therefore, we declined to comment,” was the company’s response.
Randeree said that the actions of this grouping was, “disruptive and counter-productive to the company’s efforts, and only strengthened the board’s resolve to uphold its fiduciary duties and to act in the best interest of the company and shareholders, as required by the Companies Act”.
“The Board is considering legal action in terms of the Cyber Crimes Act as well as provisions under the Protection of Personal Information Act to pursue individuals, and administrators of social media groups, who cast aspersions, and spread false information.”
Limalia did not respond to a request for further comment after the letter was sent to shareholders.
The investors have since formed a group called Amaanat Minorities NPO (Non Profit Organisation), which is fighting for the return of their investments.
The NPO has secured the service of the well-known law firm, Norton Rose Fulbright South Africa Inc.
While some investors wanted to completely end their relationship with the company, others said they wanted the company to return a portion of their investment, which they said was a loan to the company, and to continue with their investment.
The minority shareholders claimed that AIH had without their knowledge invested their money with several other companies, which they did not trust.
One of those companies was the Durban-based Glen Rose Investments (Pty) Ltd, which was placed under business rescue in 2023.
According to documented records, Amaanat invested over R270 million in 2019 and about R282m in 2020 with Glen Rose.
Amaanat invested more than R377m and R417m with 15 companies in 2019 and 2020 respectively.
Two business rescuers, DT van Jaarsveld and KR Knoop, were appointed to jointly oversee the affairs of Glen Rose, which has subsidiaries in the US and UK.
Their mandate was to terminate the services of the current UK property manager and to oversee the taking over of the UK-based ILM Capital this month.
They are also doing the same in the United States.
Knoop did not respond to a request to comment on behalf of Glen Rose.
The minority shareholders said that they had bought shares out of a belief that it was conducting its business through Sharia Law, which forbids generating interest.
They claimed that they had discovered that in overseas trading, the company was generating interest on its shares, which was a breach of the religion’s fundamental law.
The minority shareholders’ lawyer, Sandile Khoza from Norton Rose Fulbright South Africa Inc, said that they began to represent the shareholders in March. Khoza described AIH’s investment with Glen Rose as a conflict of interest since some of the AIH’s former board members had business interests with Glen Rose.
AIH said in official documents that in 2022, the board informed shareholders that there was a moratorium on the company buying back shares from those who wanted to get out of the investment deal.
It said the shareholders were emphatically told through investment application forms that they could only get out of the deal by selling their shares to their fellow shareholders or to incoming investors.
As the investors do not believe that the company cannot afford to buy them out, Khoza said they were demanding to see the company’s financial records, which they have been denied access to.
Khoza said that he had established that Amaanat owned properties worth more than R3 billion.
He said investors were now left with the option of a Promotion of Access to Information Act (Paia) application to access the company’s financial records.
“They have been calling for the financial statements for over two years, but the board is refusing to release them.
“Even this week they were asked, ‘Guys, can we see bank records so that we can interrogate what is happening with this’, and these guys (Amaanat) are playing it down,”
Khoza said last week: “Even now in terms of the Paia request, we want access to that information and they (Amaanat) know that if investors have access to those records, we are going to discover that things were not done accordingly,” said Khoza.
Aggrieved shareholders, who requested anonymity, expressed anger at the company.
“If you were getting R1000 after every three months, you are now getting R200 (over the same period),” said an investor.
Another investor said he was desperate for his money so he could provide medical care for his frail mother and cancer-suffering wife.
“Unfortunately, the company says the money is stuck.
“They are saying there is no provision for the people to get out of the company unless you find someone to buy the shares,” the shareholder said.
Another investor said he joined the company “many years ago” because of its Muslim principles.
“The company did not accept things making interest, pornography, alcohol and gambling and strictly catered for the Muslim community,“ he said.
DAILY NEWS