Investor Communication

Orthotouchhas noted recent media reportsaboutthe court proceedingsin the Supreme Court of Appeal(“the SCA”)in Bloemfontein on 8 May2018andbelievethat certain matters need to be clarifiedso that certaintyisgiven to the scheme participants that the implementation of the scheme of arrangement will proceed unabated in the interest of the participants.The scheme relates to the compromise of certain claims of those participants.

Two appeals were heard by the SCA. The one related to the withdrawal of an application by a minority of investors in 2015 which sought to set aside the scheme of arrangement and the other related to thewithdrawal of theapplication to certify a proposed class action by four investorswho purport to represent a wider body of investors in 2014.

There is a misperception in the media that the Highveld Syndication Action Group (“HSAG”)isundertakinga class action to proceed with claims against Mr.Nic Georgiou and Orthotouch. This is incorrect. The HSAG has no claims in its own name and there are no claims againstOrthotouch in the class action. HSAG has never been an applicant in any court proceedings and cannot have any findings made in its favour,as was incorrectly reported.

The outcome of this week's court proceedingis that the certification of the class,which is a preliminary step to be allowed to proceed with any class action can now proceed. No class action can begin before a class is certified by the courts.Likewise,the applicationto set aside the scheme of arrangement maynow proceed in the normal course.

Orthotouch is disappointedthat the SCA did not allow itsfull legal argument to be heard this weekand believesthat had the Orthotouch’scounselbeen given the opportunity to argue the appeals, the court would have been in a position togive clarity on the rights and obligations of the representative plaintiffs in applications to certify class actions.

The appeals wereconsequently withdrawn by the appellants’ legal teamsto avoid any inference of impropriety being drawn,and costs were tendered. There was furthermore no concession that Mr. Georgiou acted unethically and abused the legal system, as was reported.

Furtherallegations were made in the media that Mr. Georgiouand his property companies collected R 4.6 billionfrom investors. This is not true. Mr. Georgiou has never been involved in Picvest, Bosman & Visser or any of the Highveld Syndication companies(“the HS Companies”).

ZephanProperties (Pty) Ltd (“Zephan”)sold certain propertiesto Bosman & Visser, at market related prices. Bosman & Visser then on-soldthese properties tothe HS Companies. The HS Companies,in turn,syndicated the propertiesto the public contrary to what has beenreported, Mr. Georgiou hasnever received,nor been entitled toreceive,any payment from the HSCompanies. This is a factthat certain detractors to the scheme of arrangement would like to ignore, as the scheme does not suit their self-serving interests, which are opposed to the interest of the general body of investors.

The HS Companieswere placed undervoluntary business rescue in 2011after theyran into financial difficulties and were unable to pay investors their interest on their investments.

Only aftertheHS Companies wereplacedinto business rescue,did Orthotouch make an offerto purchase the properties and rights in properties held by theHS Companiesat market related prices.

The offerwas published inthe Business Rescue Plan,which wasaccepted by an overwhelming majority of the investors. A realalternative for the HS Companies would have been liquidation where the investors would have lost everything thatthey had invested. To date,more than R1,3 billion has been paidfrom Orthotouch, as interest, to the investors.

As stated in the HS Companies’ Business Rescue Plan and in the interest of the investors, Zephan does not receive any payment until all the investors have been paid in full.

The scheme of arrangement proposed by Orthotouch to buy the properties from the HS Companies was advertised and public meetings were held in 2014.The scheme of arrangement provided expressly that it would be sanctioned by the court after its acceptance. Investors were advised in the documentation circulated beforehand to seek independent legal advice before casting their votes.It was furthermore incorrectly reported that Mr. Georgiou’s companies were placed in business rescue. The HS Companies were never his companies.

Mr.Theron, the attorney for the HSAG, is quoted as saying that the class action will claim back the monies of investors from Orthotouch and Mr. Georgiou. This is incorrect as no claims are being made against Orthotouch in the proposed class action. The class action,if certified will not affect Orthotouchnor the implementation of the scheme of arrangement.

All that the legal actions taken by Mr. Theron and the detractors from the scheme of arrangement serves to achieve,is to delay the implementation of the scheme of arrangement and to erode the monies which would otherwise have been available to pay the investors.

We still believe that thescheme of arrangement offers the greatest potential for investors to realise value from their investment in the HS Companies.

Orthotouch het kennis geneem van sekere media berigte m.b.t. die onlangse verrigtinge in die Hoogste Hof van Appèl (“die HHA”) te Bloemfontein op 8 Mei 2018 en is van mening dat sekere beriggewing voortspruitend uit die sake aangehoor reggestel moet word ten einde ongehinderd reg te laat geskied aan die artikel 155 reëlingskema in belang van beleggers betrokke se eise in die skema.

Die HHA het twee sake aangehoor. Eerstens die onttrekking van ’n aansoek in 2015 om die artikel 155 reëlingskema tersyde te stel, deur ’n minderheid groep beleggers en tweedens die onttrekking van vier applikante wie in 2014 aangevoer het om ’n groter groep beleggers te verteenwoordig wat die aansoek om sertifisering van ’n beoogde klas aksie ondersteun het.

Daar word verwarring in die media geskep deur foutiewelik te berig dat die Hoëveld Sindikasie Aksie Groep (“HSAG”) besig is met ’n beoogde klas aksie wat eise teen Mnr. Nic Georgiou en Orthotouch insluit. Die HSAG het geen geregistreerde eise as ’n groep nie en daar is ook geen eise namens die klas aksie teen Orthotouch nie. Die HSAG is ook nie ’n applikant in enige regs geding nie en is ’n uitspraak ten gunste van die HSAG dus nie moontlik nie, soos ook foutiewelik in die pers berig.

’n Klas aksie moet eers deur die hof gesertifiseer word voordat daarmee voortgegaan kan word en die werklikheid van die afgelope week se hofverrigtinge is slegs ’n eerste stap om voor te gaan met die aansoek om sertifisering van ’n klas aksie en daarna kan litigasie volg. Dit geld ook vir die aansoek om met die tersydestelling van die reëlingskema voort te gaan en kan litigasie ook nou langs die normale kanale voortgesit word.

Orthotouch is in ’n mate teleurgesteld dat die Appèlhof nie hul regspan se volledige argumente aangehoor het nie aangesien hul van mening is dat die Hof se bevinding beslis rigtinggewend sou wees tot regs geskiedenis m.b.t. die regte en verpligtinge en die sertifisering van klas aksies in die algemeen. Die onderskeie aansoeke vir appèl is gevolglik terug getrek deur die applikante se regspan bloot om enige onjuiste gevolgtrekking te voorkom en het dan koste aangebied. Daar was ook geen toegewing of bevinding dat Mnr. Georgiou oneties opgetree of die regstelsel misbruik het soos in die pers berig nie.

Die pers het verder ook bewerings gepubliseer dat Mnr. Georgiou en/of van sy maatskappye sowat R4,6 miljard van beleggers ontvang het. Dit is van alle waarheid ontbloot en volslae leuens aangesien Mnr. Georgiou nooit betrokke was by Pickvest, Bosman & Visser of enige van die Hoëveld Sindikasie Maatskappye (“die H’S Maatskappye”) nie.

Zephan Properties (Pty) Ltd (“Zephan”) het sekere eiendomme aan Bosman & Visser verkoop teen markverwante pryse welke eiendomme deur Bosman & Visser aan die H’S Maatskappye verkoop is. Die H’S Maatskappye het op hul beurt die eiendomme aan die publiek ge-sindikeer in teenstelling met wat in die pers berig word. Mnr. Georgiou het nooit enige betaling of aanspraak gemaak op enige betaling van die H’S Maatskappye nie. Dit is feite wat sekere teenstanders en ondermyners van die reëlingskema graag ignoreer aangesien die skema nie hul eie self verrykende agendas pas nie wat nie die belange van die beleggers respekteer en bevorder nie.

Die H’S Maatskappye het in 2011 finansiële probleme ondervind tot so ’n mate dat hul nie in staat was om rente betalings aan beleggers op hul beleggings na te kom nie en is vrywillige in besigheid redding geplaas. Slegs nadat die H’S Maatskappye in besigheid redding geplaas is, het Orthotouch ’n aanbod aan die H’S Maatskappye gemaak om die eiendomme en regte in eiendomme teen mark verwante pryse te koop.

Die aanbod is gepubliseer in die Besigheid Reddings Plan wat deur ’n meerderheid stem aanvaar is. Die alternatief vir die H’S Maatskappye was likwidasie waarin die beleggers al hul beleggings sou verloor. Sedertdien tot datum het Orthotouch meer as R1,3 miljard se rente aan beleggers betaal.

Wat van belang is om op te let soos vervat in die Reëlingskema Plan en in belang van beleggers is dat Zephan geen betaling ontvang voordat beleggers ten volle betaal is nie.

Die reëlingskema deur Orthotouch voorgestel om die eiendomme van die H’S Maatskappye te koop was behoorlik geadverteer en die nodige openbare vergaderings gehou in 2014. Dit was duidelik gestel aan alle belanghebbendes dat die artikel 155 reëlingskema deur die hof gesanksioneer moet word na aanvaarding en beleggers was vooraf geadviseer om onafhanklike regs advies in te win voor hul ’n stem uit bring.

Daar word ook verder valslik berig dat Mnr. Georgiou se maatskappye in besigheid redding geplaas is en word dit benadruk dat die H’S Maatskappye nooit Mnr. Georgiou se maatskappye was nie.

Mnr. Theron wat as prokureur vir die HSAG optree word aangehaal dat hy sou gesê het dat die klas aksie die geld van beleggers van Orthotouch en Mnr. Georgiou sal verhaal. Dit is nie korrek nie en misleidend aangesien daar geen eis teen Orthotouch in die voorgestelde klas aksie is nie. Die klas aksie, as dit gesertifiseer word, sal nie Orthotouch raak nie of die uitvoering van die reëlingskema nie.

Al die regsaksies deur Mnr. Theron en die teenstanders van die reëlingskema is slegs daarop gemik om die implementering van die reëlingskema te vertraag en die fondse met aanhoudende litigasie uit te put wat andersins aan beleggers betaal kon word. Ons is steeds van mening dat die reëlingskema onder omstandighede die enigste uitweg is vir beleggers om die meeste waarde uit hul beleggings in die H’S Maatskappye te kry.

Orthotouch.