Coert Coetzee, the flamboyant property developer of Somerset West, who founded one of the country’s largest and most controversial property schemes worth about R5bn, is not only the target of some of Treoc Capital’s creditors, but is also heading for a full-scale conflict with one of his former business partners.
Coetzee and his right-hand man, Ian Deyzel, were recently summonsed to testify in the Bellville civil court in a liquidation inquiry into what went wrong at one of the approximately 23 Treoc-affiliated companies, namely Treoc Capital. In a previous inquiry, Treoc Capital was described as a pyramid scheme.
Finweek found out from some of the creditors that Coetzee and Deyzel had tried for months to escape last week’s “open inquiry”. Even a matter of days before the inquiry was to take place last week, representations were being made to try to avert it.
Liquidator Ryno Engelbrecht argued that the object of the inquiry was to determine whether certain creditors benefited from repayments prior to the liquidation of Treoc Capital. One of the creditors of Treoc Capital, which received a repayment of about R550 000, while others weren’t paid, was in fact Treoc Limited – for which Coetzee is deemed to be the alter ego.
In the court, Coetzee accepted no blame for what went wrong at Treoc Capital, placing all the blame instead on Jose Delgado, his former business partner. “We dismissed Delgado because of his general slackness,” Coetzee said.
Deyzel and Coetzee gave vague replies to questions about whether some creditors were “paid back” with other creditors’ money. Certain questions were answered with: “Put it in writing and I’ll find out from the auditors. I am not an accountant.”
Coetzee said he specifically asked Delgado, who initially also acted as legal adviser for the Treoc groups, whether Treoc Capital’s business practices were legal. Delgado said that he had conducted a due diligence investigation at companies similar to Treoc Capital – which also earned interest on bridging capital – and that everything was above board.
Coetzee insisted that he did not work for Treoc Capital and that he had resigned as non-executive director in April 2007. He explained that he had still signed Treoc Capital’s financial statements in April 2008 because this was another task that Delgado had not performed by reporting his resignation to the Cipro company registrar in 2007. He was therefore forced to sign the statements in 2008.
In reply to questions by Advocate Daniel Malherbe on behalf of the creditors about whether Treoc Capital was registered as a bank, as a credit provider or with the Financial Services Board, Coetzee answered no every time.
Coetzee testified that Delgado was a legal adviser and an expert on commercial matters “and I accepted his legal knowledge”.
“Now we are arguing more than ever,” Coetzee said in reply to questions about what led to Delgado’s dismissal from the larger Treoc group. “It was about his working methods, that he failed to keep promises and general slackness,” Coetzee said.
“I want it placed on record that I was not happy that outside people could make loans to Treoc Capital on which they could earn 2% a month,” Coetzee said.
He accepted no blame for anything and said: “I did not work for Capital – so charge me for neglecting my fiduciary duty, because I know nothing.
The commissioner at the inquiry, Warno Steenkamp, approved a request by the liquidators that Delgado must also be summonsed to testify under oath. A date for Delgado’s appearance is now being decided on.
Meanwhile, a war of words via email has broken out between Coetzee and Delgado, in which Coetzee reminded Delgado about certain matters that had been set out in writing, especially if there should perhaps be “subsequent legal action”.
The ongoing liquidation inquiry into Treoc Capital follows questions that have been asked for years in the market about how, through his “Treoc Way” approach to property investment, Coetzee can enable entry-level buyers to buy as many as four properties at the same time.
The aim of the “Treoc Way” is to persuade buyers and others to use trusts, set up by the Treoc network, to acquire several properties that are financed by different banks. The mortgage loans are largely repaid through rental income, while the founder of the trust must pay the balance.
After the recent inquiry, Coetzee told Finweek Treoc is still faring excellently, and his investment seminars, which attract hundreds of people, are also doing very well. “No, I’m not heading for Australia; my roots are here,” he said in reply to a question about extending his concept overseas.