Nova’s auditors accused of failing to flag Companies Act breaches

The trustee of the Nova Debenture Trust, Jean-Pierre Tromp, has filed an official complaint with the Independent Regulatory Board for Auditors (Irba) against the auditors of the Nova Property Group, alleging that they failed to report several potential irregularities concerning Nova’s unreleased 2025 financial statements.

The most notable issue is that Nova, the rescue vehicle for the failed Sharemax investment scheme, has not released audited annual financial statements (AFS) for the year ended February 2025 within six months of its year-end, as required by Section 30 of the Companies Act.

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In fact, Nova has not released the audited AFS to date, making it nearly nine months overdue. ARC Inc, Nova’s auditors, did not file a reportable irregularity with Irba.

Tromp also complained that ARC failed to file reportable irregularities with Irba regarding the company’s disclosed liabilities to the South African Revenue Service (Sars), allegations that it may not have paid value-added tax (Vat) for several years, and concerns about its ability to continue as a going concern.

He also continues to state that Nova may be trying to circumvent a 2022 Companies and Intellectual Property Commission (CIPC) directive forbidding it from selling any more assets, by failing to oppose a liquidation application against one of its most valuable properties, the Flora Centre.

Tromp states that the property may be sold at liquidation, but that after payment to Capitec, the creditor’s surplus funds would flow back to Nova.

This could be used to fund the salaries of the Nova board, which includes chair Connie Myburgh and CEO Dominique Haese. The pair have been paid around R50 million each between 2012 and February 2024.

Their subsequent remuneration has not been disclosed due to the late release of the 2025 AFS and the as-yet unavailable 2026 AFS, which would reflect their earnings for the year to end-February 2026.

Moneyweb sent questions to Myburgh and Haese regarding the Irba complaint and related allegations, but they did not respond. Their response will be added once received.

Tromp’s complaint to Irba follows an earlier complaint he sent to the CIPC, in which he expressed concerns about the late publication of the AFS and the directors’ reckless trading under Section 22 of the Companies Act – another contravention of the act.

The complaint alleges that the directors continue to run the company despite concerns about its solvency and going concern status.

Section 30 and audited financial statements

Section 30 of the Companies Act requires public companies to prepare audited AFS within six months of year-end. This principle is confirmed by statements released by the South African Institute of Chartered Accountants (Saica) and the CIPC.

A CIPC statement, released in 2024, could not be clearer, as it states: “In terms of Section 30 (1) of the Act, a company must prepare annual financial statements (AFS) each year within six months after the end of its financial year.

“Within the same six-month period, the annual financial statements must be audited in the case of a public company, state-owned company or any profit or non-profit company.”

This position is set out even more clearly by the CIPC in a letter to Tromp as part of his ongoing interaction with the regulator.

“The CIPC hereby unequivocally confirms that the Nova Group of Companies, consolidated as Nova PropGrow Group Holdings Ltd, is in contravention of Section 30 of the Act by not causing the preparation and approval of annual financial statements within six months of its financial year-end.”

Based on the CIPC’s interpretation of Section 30 and the publication dates of Nova’s financial statements, Moneyweb’s analysis indicates that this is the tenth consecutive year that Nova has been in contravention of the act.

Year	Auditors	Audit opinion	Date	Period late
2012	BDO	Unqualified	31 January 2013	5 months
2013	BDO	Unqualified	01 October 2013	1 month, 1 day
2014	BDO	Unqualified	01 October 2014	1 month, 1 day
2015	BDO	Unqualified	31 August 2015	On time
2016	BDO	Unqualified	14 September 2016	14 days
2017	BDO	Qualified	08 September 2017	8 days
2018	Nexia SAB&T	Qualified	04 December 2018	3 months, 4 days
2019	Nexia SAB&T	Qualified	06 March 2020	6 months, 3 days
2020	MKIVA	Qualified	26 February 2021	5 months, 26 days
2021	MKIVA	Adverse	05 November 2021	2 months, 5 days
2022	Geyser Du Plessis	Adverse	30 November 2022	3 months
2023	ARC	Unqualified	10 October 2023	1 month, 10 days
2024	ARC	Unqualified	31 January 2025	5 months
2025	ARC	?	?	Almost 9 months

Myburgh denies contravention of the act

However, in response to questions, Myburgh denied contravening Section 30 of the Companies Act.

“You continuously make statements as if [they are] correct facts, whilst being incorrect. As addressed exhaustively with you, in the past, the Nova Group has never been ‘late’ in publishing its Financial Statements and has never breached the provisions of Section 30 of the Companies Act.

“It is your incorrect interpretation of the Companies Act which leads you to come to your injudicious conclusions. The Nova Group has taken legal advice regarding Section 30 of the Companies Act, [from] Senior Council. We suggest you obtain your own advice.

“We will not comment publicly on anything regarding Mr Tromp.

“Please print out response verbatim in any article you still which to publish.” (Sic)

Nova’s previous auditors have reported reportable irregularities (RIs) to Irba. A summary includes:

Entity	Date of first report	Nature of RI	Outcome	Further actions by Irba
Nova Property Group Holdings Limited	04 Aug 17	Audit committee not properly constituted.	Issue not continuing to occur	None
Nova Propgrow Group Holdings Limited and Subsidiaries	05 Dec 19	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue continuing to occur	Onwards-sent to the CIPC and Sars
Nova Property Group Investments (Proprietary) Limited	19 Feb 21	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue not continuing to occur	None
Nova Propgrow Group Holdings Limited	19 Feb 21	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue not continuing to occur	None
Geo Sphere Developments (Proprietary) Limited	19 Feb 21	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue not continuing to occur	None
Nova Property Group Investments (Proprietary) Limited	07 Oct 21	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue not continuing to occur	None
Nova Propgrow Group Holdings Limited	07 Oct 21	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue not continuing to occur	None
Geo Sphere Developments (Proprietary) Limited	07 Oct 21	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue not continuing to occur	None
Nova Property Group Investments (Proprietary) Limited	07 Sep 22	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue continuing to occur	Onwards-sent to the CIPC and Sars
Nova Propgrow Group Holdings Limited	07 Sep 22	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue continuing to occur	Onwards-sent to the CIPC and Sars
Geo Sphere Developments (Proprietary) Limited	07 Sep 22	AFS not approved within six months of its financial year-end and the required notice of the AGM was not provided.	Issue continuing to occur	Onwards-sent to the CIPC and Sars

Sars liabilities

The complaint also refers to liabilities disclosed in Nova’s audited AFS for the year ended 29 February 2024, most notably allegations that the group has failed to pay Vat for several years.

It further states that the auditors should have considered whether these matters constituted RIs under the Auditing Profession Act.

Flora liquidation proceedings

The memorandum also refers to the imminent liquidation of the Flora Centre, one of the few remaining assets in Nova’s investment property portfolio. Capitec has applied for the property’s liquidation due to non-repayment of a loan.

Flora is one of the most important properties in Nova’s portfolio, generating 25% of Nova’s revenue in its 2024 financial year.

Tromp says Flora is in provisional liquidation and that Nova did not oppose Capitec’s application.

“I remain perplexed, particularly when considering the urgent and extensive steps the Nova Group took in 2023 to prevent the Quatro Group from instituting 12 liquidation applications. But the Nova Group has not similarly opposed the provisional liquidation of Flora.”

Tromp alleges that Flora’s provisional liquidation may allow Nova to bypass the CIPC compliance notice that forbids Nova from selling any properties, as a liquidation order would supersede the CIPC directive.

Read:
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He further suggests that, after Capitec Bank is repaid, any surplus proceeds from the sale could be redirected within the Nova Group to improve its liquidity position.

He states that the delay in releasing Nova’s 2025 AFS may be linked to concerns about the group’s ability to continue as a going concern, as well as the possible use of proceeds from the Flora Centre sale to strengthen its financial position before the audit is finalised.

CIPC response

The CIPC acknowledged receipt of Tromp’s complaint and confirmed that it has engaged Nova.

“The engagement between CIPC and Nova includes the initial complaint form and the submission related only to Section 22, not Section 30, of the Companies Act. The commission has not referred cases to other regulators from Corporate Governance, Surveillance and Enforcement (CGSE) regarding speci?c contraventions of the Companies Act.”

Regarding the liquidation application for the Flora Centre, the CIPC said it “attempted to intervene, but counsel advised that there was, at the time of the consultation, no urgency in the absence of any papers having been ?led. According to emails from the debenture trustee, the matter was deemed to be not substantive.

“However, the commission has further appraised the State Attorney and engaged the Office of the [National Director of Public Prosecutions] in an attempt to expedite the inter-departmental coordination efforts in pursuit of the objectives outlined in the referenced internal memo.”

The CIPC also confirmed it has received complaints from various debenture holders regarding non-payment of their investments and a lack of response from the Nova Board when enquiries are made about payment timelines.

CIPC enforcement

The CIPC challenged Nova in 2022 after it failed to repay debenture holders under the Schemes of Arrangements and issued two directives against Nova, one of which forbade it from selling any more properties. This was nearly four years ago. The CIPC has not announced any subsequent enforcement action.

Separate from the Irba complaint, Tromp also published a memorandum relating to approximately R415 million in debentures.

According to the memorandum, debentures of R415 million remained outstanding despite their associated properties being sold for R370 million. Tromp states that the proceeds of the sale were not returned to the debenture holders, but rather “utilised within the group” to ostensibly cover operational expenses, including directors’ remuneration.

“The only conceivable avenue for repayment would be through an external funding source, such as a ‘fairy funding godmother’, highlighting the extreme improbability of such a scenario,” he states.

Myburgh has responded to the memorandum and rejected Tromp’s claims.

ARC Inc response

Theo Rautenbach of ARC Inc said in response to questions that the firm would “provide our full cooperation to [Irba] in dealing with the pending complaint, referred by Mr Jean-Pierre Tromp under oath, which is now in the public domain.”

He added that the firm is not in a position to respond to the various questions Moneyweb put to it as the complaint will be dealt with in accordance with Irba’s procedures.

“The allegations of Mr Tromp are not supposed to be in the public domain and in this regard our rights are strictly reserved.”

In another correspondence, Rautenbach indicated that ARC Inc may institute legal action against Tromp.

“In light of the serious, untrue, and potential damaging allegations made by trustee in his complaint, and the placement thereof on his website, ARC initiated a legal process with regards thereof though.” (Sic)