September 2022 Status Report

Business Rescue Status Report 

ORTHOTOUCH (PTY) LIMITED (“the Company”) REGISTRATION NUMBER 2010/004096/07

ZEPHAN PROPERTIES (PTY) LIMITED (“the Company”) REGISTRATION NUMBER 2003/020174/07 

To Whom It May Concern,

The Companies Act 71 of 2008, as amended, and more specifically section 132(3) thereof, provides that where a company’s business rescue proceedings have not ended within three months after the start of those proceedings, the practitioner must prepare a report on the progress of the business rescue proceedings and update it at the end of every subsequent month until the end of those proceedings. The report must be delivered to all affected persons.

BUSINESS PROGRESS

1. General

a. I refer to a newsletter which was circulated by Helgard Hanke. I wish to confirm that I will assist as far as reasonably possible in any investigation launched with the facts to my knowledge.

b. I refer to the circular of Michael K, whereby it was stated that certain information was provided to me for investigation purposes, and he confirms that I, as BRP, have not taken any steps in regard to the investigation of the information provided to me. I can confirm that this is NOT correct as my attorneys are reasonably far advanced with the investigation and I expect to receive a report from them during the course of next week whereafter I will commence with an action plan, if proven to be correct.

2. Continuance of the Business

a. I can confirm that I am constantly engaging with the officers of Orthotouch and Zephan in ensuring the continuance of the business in the absence of Nic Georgiou.

b. The shareholder trust has identified the replacement director and the appointment is in process.

3. Properties

a. We continue to have full control over the properties.

b. We have restructured the admin duties and functions. DTB has appointed an independent management company to oversee the remaining properties which has already shown an increase in monthly income. We continue to engage with them in regard to the running of the properties and the collection of rental income.

c. We have received various offers to purchase on 3 properties in the value of R11 200 000.00 (excl. VAT) and our further advise will follow in this regard.

d. We are looking at selling the properties due to the income and expense on such properties not being viable, especially on the Weltevreden Park Property seeing as the 2 portions currently being sold are vacant.

e. We have received an offer to purchase on the Goldwill Property with the  purchaser looking to occupy a portion of the property.

4. The appointment of an Executor for the Estate Late of Nic Georgiou was appointed and I am engaging with the Executor representative to the extent that may be necessary. The original executor has passed away, but the new appointment has taken place.

5. Proposer Involvement

a. In terms of the proposed business rescue plan regarding the issuing of shares as an option in the Business Rescue Plan, I wish to confirm that I have engaged with the representative of the proposer who gave me their commitment that they are committed in making the shares available as a payment method to purchase claims as proposed in the BR Plan.

b. Such commitment has been confirmed in writing in February 2022.  The Proposer will be FICA’d by an independent law firm as well as auditing firm to ensure its independency, this will include ensuring that the Proposer has sufficient means to offer said shares.

d. The Proposer will buy shares and deposit them into a vault on the Compushare system, from where they will be released to creditors should a creditor chose to sell their claim. This option will only be available upon the approval of the BR Plan and the subsequent court sanctioning.

e. Negotiations regarding the online portal which will be used for the verification of creditors and will allow them to sell their claim in exchange for shares if they wish to, has been completed and a draft portal has been constructed. The legal team is currently verifying the process and the documentation surrounding same. This same online portal will be used for the voting process regarding the Business Rescue Plan.

f. Once this system is in place, notifications will be issued to all creditors with instructions on how to proceed.

g. A demo version of the online portal nears completion and information regarding the investors to be used in the portal is being consolidated. Currently engaging with a JSE expert to determine the Max amount of APF shares that can be issued in a specific time period without negatively impacting the share price; once this is determined the agreement can be finalized by the appointed attorneys/ advocates and can be presented to the proposer.

i. Once the agreement has been concluded; communications will start regarding the online process.

6. Auditing

a. As previously stated, we are permanently engaging with the auditor in finalising the financial statements.

b. The auditor is constantly in the process of updating the AFS to get same up to date. My advices in this regard will follow in due course.

c. It is our intention to finalise the AFS to date as soon as possible.

d. We are currently engaging with SARS on this matter however we need to finalise all financials to date before we can file the AFS for Orthotouch and

e. For both Orthotouch and Zephan to be updated, the shareholders and the connection to the shareholders also need to be updated as a group to finalise the intercompany loans and group entities in conjunction with the Companies.

7. I continue, as always, to exercise my duties as Business Rescue Practitioner and remain in control of the businesses and assets of the Business Rescue Companies.

LITIGATION

1. As advised in previous reports, certain attorneys persist with litigation in blatant disregard of the provisions of Chapter 6 of the Companies Act, and the moratorium against legal action as regulated by Section 133 of the Companies Act. I will continue to vigorously oppose and defend this legal action duly represented by the Companies’ legal team.

2. Please see the below link to the various litigation matters which we are busy with:

https://1drv.ms/b/s!Aq7VguEjA8oSg4RZ_jnAvfHWar5oFA?e=BILJgD
https://1drv.ms/b/s!Aq7VguEjA8oSg4RV47GmOtzsPTv9_w?e=CTfni5

3. The “Black Application”

a. This application is in regard to a group of creditors looking to attach funds held by the receiver in the previous Scheme of Arrangement.

b. Such funds are currently under my control in an investment trust account which is held by attorneys in the amount of R 1.2 million.

c. We are opposing such application as I am of the opinion that the funds belong to ALL creditors and not only a small portion of the creditors.

CLASS ACTION LITIGATION

4. Litigation continues with the Applicants and Respondents having to file papers according to set timelines whereafter a court date shall be applied for the application to be heard. Theron filed a notice to postpone to a date to be set and the court afforded such extension.

5. Declarator Application

The application continues to be opposed, the opposing parties have filed and served their papers. The replying affidavit was finalised, signed and I have received confirmation that it has been filed at court and served on the other parties. I wish to confirm that we were requested to apply for the respondents to be combined as a group. This application was done based on a cost saving initiative. It is not as Theron’s reports which state that he and other parties were removed from the declarator list. All parties are included and no party has been excluded or removed from same.

My further advise will follow in this regard. As a reminder, this application is for the purposes of obtaining clarity in regard to the applicability of the Scheme of Arrangement and the rights of the creditors going forward.

6. Condonation Application to the Declarator

It was demanded that we submit a condonation application due to the late filing of the replying affidavit. The information received was excessive and we therefore required more time to work through such information in finalising the replying affidavit. We are in the process of finalising the replying affidavit to the condonation application. The declarator was heard on the 5th & 6th of October 2022 and we are awaiting the judgement for us to continue with the BR process.

7. The Litigation status report, in terms of the Companies Act, pertaining to all litigation matters has been published in terms of the Companies Act and is available inter alia via the Orthotouch *website.

For all enquiries relating to investments, the following contact details are available:
Administrative Manager: Sanja Elzerman
admin@orthotouch.co.za

Yours faithfully
Jacques Du ToitDirector & Senior Business Rescue Practitioner

DTB Business RescueB.Proc, Dip. Tax, Attorney, Notary, Conveyance