Former Delta Property Fund chair Johannes Magwaza and CEO Sandile Nomvete are facing a delinquent directors application brought against them by a creditor of their liquidated entity, Somnipoint. Private equity firm Vantage Capital Fund Management has asked the high court in Johannesburg to declare the men delinquent directors.
- Vantage Capital is also suing the two former executives, along with another former Delta executive, for a combined amount of R371 million over a property deal that went sour. The firm claims it granted Somnipoint a R200 million credit facility nearly a decade ago to purchase a building in Pretoria. However, Somnipoint defaulted on its debt, and Vantage alleges that Delta’s directors hindered the firm from exercising its rights as a creditor.
- Sandile Nomvete, the former CEO of Delta Property Fund, declined to comment on the application brought by Vantage, stating that the matter is still pending before the court. Johannes Magwaza, the former chair of Delta, did not respond to questions sent to him.
- Vantage Capital argues that it is acting in the public interest by bringing the delinquency application, considering that both Magwaza and Nomvete were directors of multiple companies, and Delta was a public company.
- In December 2020, Delta Property Fund disclosed that a forensic investigation had uncovered evidence of past governance failings and wrongdoing at the company. This included unsubstantiated payments, procurement irregularities, and unethical business dealings.
- The property deal in question involved Delta’s attempt to acquire the Absa Towers building from Somnipoint. Delta paid a refundable deposit of R45 million, but the deal did not materialize. Delta claims that the deposit was not refunded, while Nomvete denies this.
- The case highlights alleged governance breaches at Delta Property Fund during the tenure of Magwaza and Nomvete, shedding light on the challenges they now face as they defend against the delinquency application and the lawsuit brought by Vantage Capital.