Not so Choice ConvergeNet!

ConvergeNet CEO Pieter Bouwer Laments - "This is our first exposure to the black art of liquidation in this country".

I say kak man!

On 13 December 2009 I sent out a rather tongue in cheek Newsletter.

Quote: “Ruminating over these pages (SAICFM) and the Newsletter in general soon after reading this mornings electronic Sunday Times I was struck by a strong sense of déjà vu as the following headline caught my eye -Absa has bad news for its shareholders; BankNotes Dec 12, 2009 11:09 PM | By Stuart Theobald.

What struck a chord were the following paragraphs – “Apart from Blue, it also has a 26% stake in investment company Sekunjalo - that's carried at R71-million on the balance sheet but is now worth only R39-million. The last of the four headaches is ConvergeNet, on the balance sheet for R58-million but now worth R41-million.

When added to the first six months write-offs, the total for the year will be R1.5-billion of write-offs linked to the single stock futures debacle.” 

As my wife says, “The problem with free advice, is people attach no value, because it’s free and as such carries none”. 

Vesta Technologies Holdings, in which the majority of shares are owned by the Morrison Family Trust, was to be acquired by its CEO, Fred Morrison.

Vesta's performance over the past few years has been poor and its net asset value at the end of its last financial year was only R1,6 m.

But I notice this about some of the architects behind the revival of Vesta.

Deon van Rooyen, a chartered accountant (CA), resigned from ConvergeNet soon after the reconstruction of Vesta into ConvergeNet Holdings quote “happily retaining his shares in ConvergeNet Holdings” unquote.

Well why he left is apparently because he had some or other “conflict of interest” emerging.

So naturally I follow the accountant and find him taking up first a “consultant” position at Sekunjalo and then an “Executive Position” at a company in the Sekunjalo stable called…  “Synergy”.

Listed on the Board is one LC Jones?

In March 2007 ConvergeNet acquired 100% of the issued share capital of ConvergeNet SA (Pty) Ltd, 51% of the issued share capital in Structured Connectivity Solutions (Pty) Ltd in April, 51% of the issued share capital in Sizwe Africa IT Group (Pty) Ltd in June and 74% of the issued share capital in Telesto Communications (Pty) Ltd also in June.

Sometime later ConvergeNet Holdings acquire a further 5.2% in SIZWE Africa IT.

Then the entire matter starts becoming more convoluted than a re-run of Dallas .

On or about April 2006 Frederick Morrison, founder of Vesta Technologies, offered to buy out Bevdev, after which the company will change its name, restructure its capital and try to acquire new assets in order to maintain its JSE listing

Follow BevDev and you find more losses and failed deals than even Cliff Barnes could pull off.

I arrived at the appointment of two names to a company that appear directly linked to the Board of a company called ConvergeNet Holdings that grew from a company owned by the same man who left a similar trail of wanton destruction under another stock on the JSE - Vesta.

In fact the architect of the “ Phoenix ” ConvergeNet Holdings is a “Deon van Rooyen” a Chartered Accountant who promptly resigns from ConvergeNet Holdings on “conflict” grounds to act as consultant to Sekunjalo where he winds up on the Board of Synergy.

If it’s the same guy because I’m getting both a Martin Deon van Rooyen and a Deon van Rooyen.

It also seems that behind Marcape (Pty) Ltd as a nominee for Eagle Fund Managers (Pty) Ltd (EFM), “has acquired control of Emergent in terms of an agreement dated 15 February 2008” is, you guessed it again, a Mr. MD van Rooyen registered with the FSB as “Compliance Officer”.

Also on the Board of ConvergeNet Holdings appears a Sandile Swana also on the Board of Emergent.
It seems while confusing to some, to me at least that there are sinister forces at play on the Boards of ConvergeNet Holdings, Synergy (Sekunjalo), SIZWE Africa IT (and a host of Subsidiaries) and BevDev CC.

That “fleas” analogy springs to mind.

What’s my point in all of this?

The recent article by Nicola Mawson in ITWeb - JSE-Listed ConvergeNet is being sued for R37 million for pulling out of an 11th-hour deal to rescue the now defunct Choice Technologies about two years ago.

ConvergeNet CEO Pieter Bouwer laments – “This is our first exposure to the black art of liquidation in this country.”

Hogwash, I say Mr. Bouwer, you are surrounded by able bodied people who have left a trail of devastation in their wake for over a decade.

The cost to investors of all kinds, private and institutional, has run into the tens if not hundreds of millions.

So suck it up Mr. Bouwer . I’m sure you’ll defend the claim against Choice, who themselves weren’t, well very choice.

Just don’t pretend you’re not very good at it.

So what’s the free advice folks?

I just gave it.