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Holiday blues for thousands
23/12/2001 22:10 - (SA)
Helen Coetzee, Die Burger
Cape Town - More than 8 000 timeshare owners may lose their investment if the company on which they rely for holiday accommodation collapses.
This has come to light in an urgent court application in the Cape Supreme Court against Holland Moorehouse (HM) by its chief executive, Brett Jolly. The application is being opposed by the company's board of directors.
The application failed on Friday since Jolly could not prove the urgency of the application. His attorney Schalk Marais said he had instructions to immediately file another application for HM's liquidation.
Marais described the case as "a second Masterbond", with Jolly and the board of directors accusing each other in court documents of lies, fraud and recklessness.
Both parties claimed they had the interests of HM subscribers at heart, but nobody seemed to have informed subscribers of the application.
'A trip to Las Vegas'
HM has more than 8 000 subscribers countrywide with membership in two holiday timeshare schemes, Travel Plus Plan and Premier Portfolio. The average price was valued at about R17 600. Subscribers paid a 30% deposit and the balance over 60 months. This money provided HM with a consistent income of R1.3 million per month which, according to Jolly, had to be used to ensure members of accommodation.
Jolly alleged the board of directors wasted money to such an extent that the company had become insolvent and
subscribers' investments endangered. He claimed the directors had taken a trip to Las Vegas while the company was in dire financial straits.
According to Jolly, HM's attorney, Davout Wolhuter, was appointed as chairperson of the board of directors to improve the company's administration and address its chaotic financial situation. The previous board had resigned.
Jolly said Wolhuter insisted that his father and secretary, Kathy Martufi, also serve on the board. Between the three of them they owned 70% of HM shares.
It soon became clear that Wolhuter and Martufi exercised no financial restraint, Jolly testified. Money intended for the company's daily running was used for the personal gain Wolhuter's family, he added.
'Sales commission not paid'
Jolly said R400 000 in sales commission was never paid out and sales staff consequently stopped working early in December. He also alleged that a telephone account and rent amounting to R440 000 had not been paid and that legal steps had been taken against HM for R2 million in outstanding debts. Jolly claimed HM owed R5.2 million to him and almost R6 million to Unibank.
Martufi denied all allegations of irresponsible financial management. According to her, HM was in financial trouble because of Jolly's poor administration and the current directors were trying to address it. She denied HM owed Jolly anything.
She said HM had an agreement with Club Leisure Group (CLG) which would enable HM to honour its commitments to its subscribers.
Martufi said the debtor's ledger showed R115 million was owed to HM and that the company could pay its own debts.
According to her, liquidation would bring an end to the agreement with CLG, the debtor's ledger would disintegrate and timeshare owners' investments would be in jeopardy.
'To get back his own investment'
According to Jolly, the agreement with CLG did not protect subscribers because it could not prevent Wolhuter from wasting the company's money. He said Wolhuter had invested in HM and was trying to put his interests above that of other creditors. The take-over of the board was a "strategy of Wolhuter's to get back his own investment" after realising that HM would not recover from its current predicament.
Jolly alleged that R450 000 of the group's money was under Wolhuter's direct control every month, and that Wolhuter was not using it to pay off debts. He added that Wolhuter was in the process of transferring HM assets to another company.
According to Jolly, Wolhuter received R41 000 every month as HM's attorney, R50 000 director's salary and R12 000 for a BMW and a luxury boat.
Jolly predicted that the debtor's ledger would rapidly fall behind as disgruntled subscribers failed to pay their monthly instalments. He called Martufi's claim that he owed HM R115 million a blatant lie.
Unibank opposed the liquidation application, but Jolly alleged it was because they had vested interest as current creditors.
Send e-mail to reporter Helen Coetzee.
- Die Burger
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