Byo 24 News, a local daily publication has refused to be bullied, strongly standing by its story that accused WestPro, a company partly owned by controversial businessman Ken Sharpe, of presenting misleading information in its prospectus for listing on the Victoria Falls Stock Exchange (VFEX).
On Sunday, Byo 24 carried a story titled “West Properties misleads investors in stock exchange listing bid”, in which it accused WestPro of understating the number of active legal cases against them as part of its plans to list on the United States-dominated bourse, in violation of listing rules.
In the stock market prospectus, a mandatory filing prior to listing, a company must indicate if there is any pending litigation that might affect its future. However, WestPro omitted cases with the potential of affecting potential investors if ruled against it.
The story irked WestPro, which responded through its lawyer, Stanford Moyo of Scanlen & Holderness, demanding retraction claiming the story was false and malicious.
Moyo said a detailed litigation report was published as an annexure which showed that most cases under HC 549/2021 were dismissed and there was no challenge to land and land allocation or transfer.
“The constitutional application by George Katsimberis against the Prosecutor General and others under case number HC 5623/2022 does not challenge the land allocation and transfer. It deals with the exercise by the Prosecutor General of his prosecutorial powers,” Moyo said.
“The Katsimberis case is not a case against WestProp Holdings Limited. No order will be made in that case against Westprop Holdings Limited. Nothing referred to in the Prospectus will be adversely affected by any order that may be made in that matter.”
He said Augur Investments is neither a holding company nor a subsidiary of WestPro and actions by anyone against some of the directors of Augur Investment have nothing to do with the proprietary interests of WestProp
He added: “Consequently, in addition to being grossly inaccurate, misleading and defamatory, your article displays an alarming level of ignorance of simple corporate and commercial matters such as the distinction between a corporate and its directors.
“In all the circumstances, and entirely without prejudice to rights emanating from your false and defamatory publication, we call upon you to retract your false and defamatory publication and publish an apology on terms acceptable to WestProp Holdings and its advisors.”
But Byo 24 has stuck to its guns, saying the application on HC5623/22 seeks nullification of the deed of settlement. That deed allowed for the transfer of land to affiliates of augur, including entities that are now affiliates of WestPro limited. As such, a positive outcome will nullify everything done under it.
See below Byo24’s response:
- We dispute your claim that we have engaged in any unlawful or unethical conduct, grossly or otherwise and definitively state that our report was not “a violation of West Properties and its advisors’ rights to respond and calculated to convey biased and inaccurate information.”
- To the contrary, it is both the legal declaration in Appendix 3 to the prospectus as well as your email that seek to first convey and then double down on inaccurate and misleading information in order to facilitate the procurement of a listing on the VFEX though incomplete, misleading and distorted information in violation of the Securities and Exchange Act.
- The deed of settlement achieved a lot of things, the most significant of which were (a) the writing off of all claims by the City of Harare against Augur Investments OU and its affiliates, which affiliates are now affiliates of Alpa Holdings, and (b) crucially, it outlined a process by which Augur Investments OU and its affiliates were to secure transfer to themselves or their nominees’ various immovable landholdings regardless of the fact that those properties were either owned by or bonded by parties not a party to the deed of settlement.
- It is common cause that in keeping with the deed of settlement, and against the protestations of the owners or holders of the said securities over the properties, all were duly transferred on Augur Investments OU’s instructions to nominees of Augur Investments OU. These transfers were in terms of the deed of settlement.
- It is further common cause that some if not all of these properties form the bulk of the land that constitutes a large part of the property portfolio that WestPro is saying belongs to it in the prospectus. In fact, we have tried, but failed, to find any property mentioned in the deed of settlement that is not part of WestPro’s advertised holdings.
- Now, to your claim that the application in HC5623/22 has nothing to do with the prospectus and was rightly omitted by yourselves. This claim is quite simply unsustainable. In that case, the applicant’s draft order asks for a declaration that the deed of settlement is declared null and void. As lawyers, you would know that the effect of that declaration would be to invalidate not just the deed of settlement, but anything done in terms of that deed of settlement, which principally includes the transfer of the landholdings that now form part of WestPro’s portfolio.
- Our report accurately stated that you failed to disclose this case despite this potential significance. Now, we accept that you would have your views about the merits of the application in HC5623/22, but with respect, Appendix 3 to the prospectus is not so much about your views as it is about a legal obligation, which in our opinion you failed to live up to, to place information that is in your knowledge and which information might be relevant to the making of an investment decision. We believe that a court case with the potential that HC5623/22 has; to undo a lot of crucial property transfers, is one such relevant case. Even if your client ultimately prevails, which we cannot form an opinion on, we believe that potential investors have a right to know about this litigation.
- We note that you try to suggest that because this case does not cite WestPro Holdings, it was irrelevant for you to mention it. However, this attempt at sophistry on your part fails at the first test: all the cases that you did disclose not only do not include WestPro Holdings but include most of the parties involved in HC5623/22. This is quite simply not a competent point for you to make.
- Finally, we note that you have not said anything about the rest of the cases we mentioned in our report as having been omitted from your statutorily required report in Appendix 3 to the prospectus. We take this as an admission on your part that, as is indeed obviously the only option available to you, you accept that this omission was wrong and misleading.