JOHANNESBURG - A dispute is raging over the ownership of two of Pretoria’s largest shopping malls. The malls in question are Zambezi and The Villa, which were promoted by Sharemax. Public investors poured a total of R2.3bn into the two projects – R756m into Zambezi and R1,590m into The Villa.
These investors now hold debentures and shares issued by Nova Property Group.
Last year, Nova subsidiary, Villa Retail, took ownership of 30% of The Villa. The remaining 70% is held by Capicol 1, the mall’s developer.
But the 30% apportioned to investors could be in danger, if Capicol director Paul Kyriacou is to be believed.
Kyriacou explains that when he originally negotiated the sale of The Villa, he was granted an option to buy the mall after it had been transferred to Villa Retail. The price would be determined by the mall’s income.
Kyriacou told Moneyweb last week that this option remains valid. Furthermore, because the selling price is based on income, and the mall is not earning any, Kyriacou claims he is entitled to buy Villa Retail’s 30% share for nothing. He has notified the company’s directors of his intention to exercise the option.
However, Nova director Dominique Haese has hit back at Kyriacou’s claims. Haese says that Kyriacou’s statements regarding any option are “incorrect, sensationalist and devoid of any basis, be it in law or in fact”.
Haese claims that Villa Retail is entitled to receive transfer of an additional 50% of The Villa, and that no money is owed to Capicol 1.
The Zambezi Mall is subject to a similar dispute. Last year, half of the mall was transferred to its designated owner, Zambezi Retail, with Capicol retaining the other half.
Haese says that Zambezi Retail does not owe any money to Capicol, and that it is entitled to the remaining 50% of Zambezi.
But this version differs strongly with Kyriacou’s.
Kyriacou claims Capicol was owed tens of millions of rand for the remaining half, which has not been paid. Kyriacou says he has now “cancelled” the sale agreement.
Kyriacou expects both The Villa and Zambezi disputes to go to arbitration.
Words fly over Zambezi vacancies
Today there are virtually no tenants at the Zambezi Mall. Departing tenants include: Checkers, Standard Bank, Maxi’s, Pep Stores, Vodacom, Chicken Licken, Cubana, Rhapsodys, Land Rover and King Pie.
Both Capicol, and the mall’s manager, Frontier Asset Management, which Haese and her co-directors own, blame the other for this sorry state of affairs.
Kyriacou claims that when Capicol handed over management of Zambezi to Frontier, it was 80% occupied.
“How can you chase away a tenant like Checkers?” asks Kyriacou.
But Haese responds that at the relevant takeover date, “vast areas (in excess of 60%) of the Zambezi Mall had been ‘let’ to Capicol Group/Kyricaou related/controlled lessees at, to say the least, questionable and economically unviable rentals, as historically arranged by Mr Kyriacou for his own benefit”.
Haese continues: “Shortly after takeover, Mr Kyriacou abandoned all of these businesses as part of a clear strategy to diminish the value of the Zambezi Mall, under circumstances where he was effectively, historically, both lessor and lessee.”
Haese says that Capicol failed to keep promises made to Checkers, which included the completion of the access roads, and the building of an access ramp.