AFROCENTRIC INVESTMENT CORPORATION LIMITED - Voluntary Announcement News Website Article

Release Date: 20/07/2018 13:40
Code(s): ACT
Wrap Text
Voluntary Announcement – News Website Article

AfroCentric Investment Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/000570/06)
JSE Code: ACT     ISIN: ZAE000078416
(“AfroCentric” or “the Company” or “the Group”)


Shareholders and investors will have read an article published on a news website on 16 July 2018,
wherein it was pondered as to whether AfroCentric had adequately disclosed the contingent extent of
an unresolved damages claim launched by NHA against a subsidiary of the Company in 2007.

While the Group’s legal advisors have consistently advised the Board that the NHA claim has no merit,
the AfroCentric Board has annually disclosed all details of the claim (subject to a confidential
arbitration process) to its auditors each year since it was instituted in 2007 and that the Group’s 2017
Annual Financial Statements records as a provision, the maximum loss relating to a component of the
claim, in the unlikely event of the claim being awarded in favour of NHA.

A hearing on the merits of the claim has yet to take place. AfroCentric remains confident that it enjoys
strong prospects of successfully defending the claim and obtaining an award for costs against NHA.

The full extent of the claim by NHA was also noted and disclosed as a contingent liability in the 2017
Annual Financial statements, but the probability of the claim materialising after 11 years still appears
to be remote. Since the NHA claim was initiated, material transactions have taken place with vendors
to and investors in AfroCentric, each conducting comprehensive due diligence exercises, which
included consideration of the contingent claim by NHA.

Finally it is important to note that in 2008, the shareholders of NHA sold NHA to a company in the
Liberty Group and have not denied that NHA is today merely an empty corporate shell. The
AfroCentric subsidiary has lodged an application for leave to appeal the judgement refusing security.

20 July 2018

Sasfin Capital (a member of the Sasfin group)

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