Investors allege that Amaanat Investment Holdings (AIH), which was created to ensure financial security for members of the Muslim community, refused to buy back their shares after they wanted to severe ties. Investors want out of a property investment company because it allegedly short-changed them on their investment returns. Picture: Karen Sandison/Independent Newspapers
BONGANI HANS
SCORES of investors, including widows and pensioners, have accused a Durban-based public property investment company of allegedly short-changing them.
Investors allege that Amaanat Investment Holdings (AIH), which was created to ensure financial security for members of the Muslim community, refused to buy back their shares after they wanted to severe ties.
They want out of the company because it allegedly short-changed them on their investment returns, allegedly breached Sharia Law and invested their funds in companies they claim to be sloppy behind their backs and without their consent.
They claimed to have been promised 17% monthly returns when they joined as minority shareholders but that dropped to six percent and now they are only getting two percent.
Their appeal to withdraw their investments has fallen on deaf ears, they claim.
AIH's acting chief executive officer Junaid Limalia said the aggrieved investors were forcing the company to breach legally binding agreements or contracts they signed when they invested their funds.
“They signed the contract knowing full well that it is a property company that is subject to economic conditions of the property sector,” said Limalia.
He added that in the previous years, the company lost money through corruption by members of its previous board.
“There was a whole lot of maladministration that took place in the past by the previous board of directors and the current board is trying to stabilise the company,” he said.
Limalia said returning the money to the investors was not simple because it was an investment on property through an equity-linked share, which depended on the performance of the investment.
Investors said that after receiving media queries, the company’s board chairperson Hassim Randeree sent correspondence to the shareholders, stating that the company’s policy is ‘not to ventilate company and shareholder matters in a public forum’.
“Most recently, they contacted the media to report an adverse narrative, which included inaccuracies against the company which could only tarnish the company’s reputation.
“These media companies approached certain representatives of Amaanat for the company’s view on information provided to them by this grouping.
“Amaanat’s policy is not to ventilate company and shareholder matters in a public forum, and we have therefore declined to comment,” reads the statement.
Randeree said the actions of this grouping, “whilst disruptive and counterproductive to the company’s efforts, only strengthens the board’s resolve to uphold its fiduciary duties and to act in the best interest of the company and chareholders, as required by the Companies Act”.
“The Board is considering legal action in terms of the Cyber Crimes Act as well as provisions under the Protection of Personal Information Act to pursue individuals, and administrators of social media groups, who cast aspersions, spread false information, and tarnish the reputation of the directors and officers of the company by disseminating falsehoods and disclosing private and personal information on social media platforms.”
Limalia did not respond to a request for further comment after the letter was sent to shareholders.
The investors have since formed a group called Amaanat Minorities NPO (Non Profit Organisation), which is fighting for the return of their investments.
The NPO has secured the service of the law firm, Norton Rose Fulbright South Africa Inc.
While some investors wanted to completely end their relationship with the company, others wanted the company to return a portion of their investment, which they said was a loan to the company, and to continue with their investment.
The minority shareholders claimed that AIH had without their knowledge invested their money with several other companies, which they do not trust.
One of them was Durban-based Glen Rose Investments (Pty) Ltd, which was placed under business rescue in 2023.
According to documented records, Amaanat invested over R270 million in 2019 and about R282 million in 2020 with Glen Rose.
Amaanat invested more than R377 million and R417 million with 15 companies in 2019 and 2020 respectively.
Two business rescuers DT van Jaarsveld and KR Knoop were appointed to jointly oversee the affairs of Glen Rose, which has subsidiaries in America and the United Kingdom.
Their mandate was to terminate the services of the current UK property manager and oversee the taking over of UK-based ILM Capital this month.
They are also doing the same in America.
Knoop did not respond to a request to comment on behalf of Glen Rose.
The minority shareholders said that they bought shares out of a belief that it was conducting its business through Sharia Law, which forbids generating interest. They claimed that they discovered that overseas, the company was generating interest in its shares which is a breach of the religion’s fundamental law.
The minority shareholders’ lawyer Sandile Khoza from Norton Rose Fulbright South Africa Inc, said they began to represent the shareholders in March and described AIH’s investment with Glen Rose as a conflict of interest since some of the AIH’s former board members had business interests with Glen Rose.
AIH said in official documents that in 2022, the board told shareholders that there was a moratorium on the company buying back shares from those who wanted to get out of the investment deal.
It said the shareholders were emphatically told through investment application forms that they could only get out of the deal by selling their shares to their fellow shareholders or incoming investors.
“Share ‘buy-backs’ have never meant the acquisition by Amaanat of shares issued to you, despite some investors having that misconception,” reads a document.
As the investors do not believe that the company cannot afford to buy them out, Khoza said they were demanding to see the company’s financial records, which they have been denied access to.
Khoza said he established that Amaanat owns properties worth more than R3 billion.
He said investors were now left with the option of a Promotion of Access to Information Act (Paia) application to access the company’s financial records.
“They have been calling for the financial statements for over two years now if not longer, but the board is refusing to release them.
“Even this week they were still asking ‘Guys, can we see bank records so that we can interrogate what is happening with this’, and these guys (Amaanat) are playing it down,” Khoza said last week.
“Even now in terms of the Paia request, we want access to that information and they (Amaanat) know that if investors have access to those records, we are going to discover that things were not done accordingly,” said Khoza.
Aggrieved shareholders, who requested anonymity, expressed anger at the company.
“If you were getting R1,000 after every three months, you are now getting R200 (over the same period),” said an investor.
One of the investors said he was desperate for his money so he could provide medical care for his frail mother and cancer-suffering wife.
“Unfortunately, the company says the money is stuck.
“They are saying there is no provision for the people to get out of the company unless you find someone to buy the shares,” the shareholder said.
The shareholder said it was impossible to find someone to buy his shares.
Another investor said he joined the company “many years ago” because of its Muslim principles.
“The company did not accept things like making interest, pornography, alcohol and gambling and strictly catered for the Muslim community,” he said.
Another investor said his parents lost hard-earned cash.
“They put their money in the company every month for up to 10 months and they invested about half a million,” he said.
bongani.hans@inl.co.za