Investors who bought a fractional title shares in properties in Zimbali are considering a class action against Seeff Properties Golf & Leisure Joint Ownership because the properties are still heavily in debt.

The owners bought shares under fractional title in the belief that once they had paid for their shares, the properties would be bond- and debt-free. The owners have now discovered that the developments are a shambles with debts amounting to R31-million.

Shareholders say the money paid to Seeff Golf & Leisure was not used to pay-off debts held over the property and say that Standard Bank is believed to be considering foreclosure.

Mark Jaftha, an auditor appointed by the shareholders says that there are no management accounts relating to the properties and that he will attempt to put trial balances together from the records that are available over the past three years. He will then analyse the financial status of the 40 companies.

A group of about 400 investors bought 35 villas in Zimbali, each one owned by a different company. Investors who wanted fractional title ownership bought shares in one of the companies. The price of most villas was between R5-million and R6-million and the ownership fractions meant that some villas had about 12 shareholders.

According to Heinrich Pretorius, an accountant and shareholder at Zimbali,  Samuel Seeff, one of the family partners in the business sold his 51% shareholding in Seeff Golf & Leisure about six months after the company was formed.

Pretorius says that Deloitte & Touche were appointed as auditors for the Golf & Leisure business but due to significant differences of opinion, the two parted ways.

He says that at this stage shareholders are being asked to allow Seeff and KPMG to complete an investigation into the company (probably by May this year) and then decide on a course of action.

Pretorius says that Seeff is assisting shareholders with the investigations but suggests that any shareholders who are paying money into the fractional share scheme should pay that money into a trust account first and, once the investigation is finalised, use it to pay outstanding amounts.

He says that shareholders have suggested that an investors’ meeting be held immediately after the auditors have completed their investigations.

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It is very sad to hear that this is happening once again.
I also lost all my savings (for my children) which i put into a similar scheme, of buying shares in holiday villas in Plettenberg Bay, in the Keurbooms development. 
We were guaranteed our shares would be bought back by the company in two years, at double the price if we chose not to use the villas once complete.
After 2 years still they were struggling with planning permission due to ecological factors according to them, and before long the whole thing was auctioned off (2009), and the investors lost EVERY penny they had put in.
What i don't understand, is that i have never received any legal letter from any lawyer even proving that the development went on auction, or what it fetched, or explanation as to why the bond had to be paid first, and it did not have a higher reserve price, etc etc.
All i do know, is that i found out that MDC leisure developments was paying R50,000 a month rental for their offices at the waterfront, and i see GPMMS who marketed it are still happily in business according to their website, in fact selling more fractional ownership developments all over the place!
I for one will never be investing my money with anyone else's scheme again, and there should be more exposure of the schemes that have stolen peoples money, even if because of unforseen property slumps. I would prefer to see this kind of misfortune never befall a hard working person again. - Claire