SHARES in property group King Financial Holdings are being marketed by brokers, despite the company not providing prospective investors with audited financial statements.
This is according to a recent report on the website Fin24, a report which rocked Wellington investors.
With King Financial Holdings and its three Wellington directors, the brothers Adrian, Paul and Stephen King being held in high regard, residents would not believe the allegations.
Only last year King Financial Services was awarded gold by the Wellington Sakekamer for the sensitive restoration of their premises on the corner of Malherbe and East Streets, in the historic centre of town.
Other local developments include the residential properties in Paarl South, King’s Place and Queen’s Terrace.
The Fin24 article stated that King Financial Holdings aimed to raise R100 million by placing ten tranches of 10 million new shares at R1 each with private investors.
Investors also get two wine farms, Kilcairn and Timmerman Plaasje between Wellington and Hermon, selling King family branded wine.
According to the Fin24 article the assets that made up King Financial Holdings were a variety of different King- related financial services businesses for property development (commercial and residential), insurance and bond origination.
The company has a 40% holding in healthcare provider Intercare and 26% in Marina Landscaping.
Said Fin24: “The property portfolio included the R180m King’s Mall in East London and the R310m King’s Court shopping mall in Port Elizabeth.
“King Financial Holdings claims to have an investor base of in excess of 10 000 investors and a 14-year history of creating sustainable wealth through property based investment vehicles.
“The share offer being circulated does not include complete directors’ particulars, accurate details or timeframe of the share offering nor complete financial information. A profit forecast of R250m by 2011 for King Financial Holdings, is included.
“Tough questions need to be asked. Why is a business with an apparently solid asset underpin approaching the market for a relatively small sum of money?
“Market commentators point out that the prospects for residential and commercial property are linked to interest rates and general economic activity - interest rates are up and the economy is slowing - is now the time to be playing “bank” to a property company looking to expand and apparently short of cash?” asked the Fin24 report.
Dr Paul King (snr) was approached by Paarl Post to set the record straight when the Kings pointed out inaccuracies in the Fin24 report.
“Currently 100% of the shareholding in King Financial Holdings is held by the three business trusts of the three King brothers. The audited financials of these trusts are available and the financials for the current year are in final preparation for audit.
“King Financial Holdings is a specifically designed holding company, holding the shares of all the subsidiaries. Therefore no routine financial transactions take place therein.
“Financial statemens for King Financial Holdings for the financial period ended 28 February 2007 for all the subsidiaries of King Financial Holdings are available.”
The nett asset value of the business, with its 50-plus subsidiaries one of the biggest property developers in South Africa, is R180 million.
“As a result of an opportunity to exponentially grow our business and profit margins, as well as persistent demand by clients, we decided to make available a limited number of new issue shares to a select group of loyal existing clients. All transactions and advice are on a one- to-one basis. This is not an offering to the broader public and the information pack prepared by ourselves was never presented as a formal prospectus.”
According to the Companies Act, when such an offer does not extend beyond current clients, a prospectus is not required.
