Kings in the spotlight again
2009-06-04
INVESTORS of the Wellington based investment group, King Financial Holdings, were frantic after the Sunday newspaper, Rapport, indirectly predicted the fall of this company. According to Rapport, A&S/King Investments, a subsidiary of King Financial Holdings (Kingfin), has been in the radar of the Financial Services Board who have been investigating them to determine whether they have been conducting business according to regulatory standards. This family-owned company is involved in investments in the property sector and development, as well as health care and all risk cover. Warning signs started to flicker already last year, said Rapport, when the company was selling off unlisted shares to private investors. It was estimated that R400 million had been invested in King Property Finance alone and investors were lured by promises of a 2,5% monthly return, or 30% a year. According to Rapport, investors were also encouraged to lend money against their homeloans to gain finances to invest with the Kings. Investors were allegedly attracted to this with promises of good returns on their investments and lucrative rent incomes from property developments of King Financial Services. Many of these developments, however, are standing still in the current economic climate. To top this, writes Rapport, King Financial Holdings, as a business entity, has not been able to produce audited financial reports. It was reported that R200 million of the invested R400 million were converted from loan accounts into shares in Kings. Furthermore, it was alleged that King Financial Services owe R90 million to their creditors, as well as R1,5 billion to banks. Reaction to article came from the Kings via SMS and internet communication to shareholders and investors, in which they stated that they only owe banks R480 million. Gabby Steyn, attorney to the Kings, stressed this week that legal action might be taken against Rapport for “irresponsible reporting and the publishing of untruths”. He said: “Clients can go to King Financial Holdings Limited website and read the truth for themselves,” .
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