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.
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.
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”.
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.
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.
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.”
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.
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