| Mon 20 Jun 2005, 11:29 | | Corpcapital may yet have future in a new guise |
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Corpcapital may yet have future in a new guise
Rob Rose
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Chief Reporter
IN A new twist to the long-running Corpcapital saga, the investment company may yet have a future in a new guise.
FridayÆs suggestion that the group may continue its activities came as a surprise to observers who expected the company to be delisted.
Corpcapital has been selling its assets with the intention of winding up following a bruising battle with former director Nic Frangos.
That battle is far from over, and a trade and industry department report on an investigation into whether Corpcapital acted illegally, disregarding corporate governance, is yet to be released.
At a vote on CorpcapitalÆs final winding up, shareholder John Theo asked whether the company had any plans to continue doing business.
Chairman Tom Wixley said the company would consider any proposal that came its way. But nonexecutive director Neil Lazarus said ôas matters stand, there is nothing on the table right nowö and the company was selling assets in the expectation that it would wind up.
After the meeting, Lazarus said that ôif something came our way that we believed shareholders might like, weÆd be duty bound to put it to themö.
He said this could mean Corpcapital would be open to offers from another company to reverse-list assets into the Corpcapital shell, allowing it to remain listed on the JSE Securities Exchange SA with an immediate shareholder base.
But when asked if the companyÆs directors had any plans to remain with it under any new structure, Lazarus said ôno, and many of us have moved on alreadyö. More than 96% of shareholders voted on Friday to finally wind up Corp-capital through a complex process that will see a ômirror Corpcapitalö created, from which shareholders will be paid out the proceeds of the sale of assets.
Although Corpcapital claimed the sole purpose of creating the mirror company was to allow for a tax benefit under the rules relating to secondary tax on companies, certain shareholders appeared unconvinced.
One of FrangosÆ representatives said that while Corpcapital may have to pay less in secondary tax on companies, investors who hold their shares through a trust or a company will now have to pay more capital gains tax.
However, CorpcapitalÆs adviser, Java Capital, disputed this, saying that those investors would always have had to pay capital gains tax on their proceeds, and the mirror-structure did not affect that duty.
The company was also asked whether it expected this structure to come under the scrutiny of the South African Revenue Service (SARS) for possible tax avoidance.
Java CapitalÆs Andrew Brooking said Corpcapital had ôinvestigated and taken adviceö on the tax aspect, and believed it was merely accessing a provision of the tax act that specifically allowed for this structure. Brooking said that because of this, it expected no comeback from SARS.
Corpcapital has already paid shareholders from the sale of assets, and it said on Friday it still expected to pay a further 36c to each shareholder ù 7c more than initially expected.
But when shareholders will actually get final payment remains in the air, as the company still faces a number of outstanding legal claims from the Independent NewspapersÆ Clear Channel, the Brian Puttergill family trust and Frangos.
