Consumer Industries Editor
CAPE TOWN Fishing and healthcare empowerment company Sekunjalo Investments has received support from institutions and individual investors in its intention to sue the auditors of the liquidated Leisurenet group, CEO Dr Iqbal Surve said yesterday.
Sekunjalo's legal team is expected to meet in the next two days to take a decision on whether to pursue a class action against auditors Deloitte & Touche.
An announcement on that decision is expected next week.
The group announced last week it intended to sue Deloitte & Touche, who were the auditors of Leisurenet from the time of its listing until its provisional liquidation three years ago. It said it was going to claim R200m in damages.
It alleges that Deloitte & Touche prepared financial statements which might not have been in accordance with generally accepted accounting practice and might have created a false impression of Leisurenet's financial position.
Sekunjalo was the single largest shareholder in Leisurenet with a stake of about 18%.
It wrote off about R155m after Leisurenet collapsed. In the past two years, Sekunjalo has struggled to recover from the blow but was recently voted top black economic empowerment market performer for this year by BusinessMap.
Leisurenet, the gym group that owned the Health & Racquet Clubs, which have since been sold to Virgin Active, is currently the subject of a two-year commission of inquiry in terms of section 417 of the Companies Act into the reasons for its being placed in liquidation. It had about R1bn of liabilities.
The inquiry is due to resume on June 23, when former Leisurenet joint CEO Rod Mitchell will face the liquidators. He will be followed by joint CEO Peter Gardener in the first week of July.
The conclusion of the inquiry has been delayed by legal issues surrounding Mitchell and Gardener's obligation to answer questions because they are also facing criminal charges, which are still under investigation by the Scorpions.
Jun 05 2003 07:31:21:000AM Charlotte Mathews Business Day 1st Edition
Thursday
05 June 2003
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
