To view the PDF file, sign up for a MySharenet subscription.

BLUE FINANCIAL SERVICES LIMITED - Quarterly Update

Release Date: 29/09/2016 14:30
Code(s): BFS     PDF:  
 
Wrap Text
Quarterly Update

   BLUE FINANCIAL SERVICES LIMITED
   Incorporated in the Republic of South Africa
   Registration Number: 1996/006595/06
   JSE Code: BFS
   ISIN: ZAE000083655
   (“Blue” or “the Company” or “the Group”)


   Quarterly Update

   Shareholders are referred to the announcement published on the Stock Exchange News Service
   (“SENS”) on 26th June 2013, whereby shareholders were advised of the Company’s voluntary
   suspension of trading in Blue Securities, as well as the various quarterly updates and other
   announcements published on SENS since then, whereby shareholders were updated on the
   developments at Blue.

   Publication of financial information
   1.     The JSE has formally approved the Company providing shareholders with a combination of
          audited and unaudited financial information. The Company will as such, as soon as all the
          2012 audits conducted by Deloitte have been complete, publish financial information up to
          December 2015.
   2.     The current status of the audits of the various financials are:

Company       February      Decembe         February             Decembe                February                 December                 December
              2012          r 2012          2013                 r 2013                 2014                     2014                     2015

Blue          Not           UHY             Not                  UHY                    Not                      UHY                      UHY
Financial     Applicable    Voscon          Applicable           Voscon                 Applicable               Voscon                   Voscon
Services
                            Complete                             Complete                                        Completed                Completed
Ghana Ltd
                            d                                    d

Blue          Deloitte      Not             Grant                Not                    Grant                    Grant                    Grant
Financial                   Applicable      Thornton             Applicable             Thornton                 Thornton                 Thornton
              Complete
Services
              d                             Complete                                    Completed                Completed                Audit has
Zambia Ltd
                                            d                                                                                             commence
                                                                                                                                          d.
                                                                                                                                          Anticipated
                                                                                                                                          to        be
                                                                                                                                          completed
                                                                                                                                          by        31

                                      Blue Financial Services Limited T. (+27) 10 072 0206 E. blue@blue.co.za W. www.blue.co.za
                                    Address 1st Floor Platinum Place, Turnberry Office Park, 48 Grosvenor Road, Bryanston, Gauteng
                                                         PO Box 4605, Randburg, 2125, South Africa Registration no. 1996/006595/06

                                                                                                   Executive Directors J Meiring (Group CEO)
                                              Non - Executive Directors S M Twala (Chairman)*, A Ber, J A French (American)*, R M Mashishi
                                                                                                                               (*Independent)
                                                                                                         Company Secretary S van der Merwe
                                                                                                A registered Credit Provider      NCRCP 133
                                                                                              October
                                                                                              2016..

Blue         Deloitte   Not          BDO           Not          BDO            BDO            BDO
Employee                Applicable                 Applicable
             Complete                Complete                   Completed      Completed      Completed
Benefits
             d                       d
Botswana
(Pty) Ltd



Blue         Deloitte   Not          Ernst &       Not          Ernst     &    Ernst     &    Ernst      &
Financial               Applicable   Young         Applicable   Young          Young          Young
             Complete
Services
             d                       Anticipate                 Anticipated    Anticipated    Audit    will
Malawi Ltd
                                     d to be                    to        be   to        be   only
                                     completed                  completed      completed      commence
                                     by     30th                by      30th   by      30th   on
                                     Septembe                   October        October        completion
                                     r 2016.                    2016.          2016.          of all prior
                                                                                              periods.
                                                                                              Anticipated
                                                                                              to        be
                                                                                              completed
                                                                                              by       30th
                                                                                              October
                                                                                              2016.

Blue         Deloitte   Not          BDO           Not          BDO            BDO            BDO
Financial               Applicable                 Applicable
             Complete                Anticipate                  Anticipated    Anticipated   Anticipated
Services
             d                       d to be                    to        be   to        be   to        be
Namibia
                                     completed                  completed      completed      completed
(Pty) Ltd
                                     by    15th                 by      15th   by      30th   by      30th
                                     October                    October        October        October
                                     2016.                      2016.          2016.          2016.

Blue         Deloitte   Not          Audit not     Not          Audit    not   Audit    not   Audit    not
Financial               Applicable   yet           Applicable   yet            yet            yet
             In
Services                             commenc                    commence       commence       commence
             progress
(South                               ed as we                   d as we        d as we        d as we
Africa)                              await                      await          await          await
(Pty) Ltd                            completio                  completion     completion     completion
                                     n        by                by Deloitte    by Deloitte    by Deloitte
                                     Deloitte

Blue         Deloitte   Not          Audit not     Not          Audit not      Audit not      Audit not
Financial               Applicable   yet           Applicable   yet            yet            yet
             In
Services                             commenc                    commence       commence       commence
             progress
Ltd                                  ed as we                   d as we        d as we        d as we
                                     await                      await          await          await
                                     completio
                                      n        by                 completion    completion    completion
                                      Deloitte                    by Deloitte   by Deloitte   by Deloitte



Closure of certain investments

3.    As previously advised a decision had been taken to proceed with the liquidation and/or
      closure and/or de registration of the following investments of the Company for the reasons
      as previously advised:

      a.      Blue Kenya Ltd

      b.      Blue Financial Services Swaziland (Pty) Ltd

      c.      Blue Financial Services Lesotho Ltd.

      d.      Mobile U (Pty) Ltd

      e.      Blue Financial Services Mauritius Ltd


Mayibuye Group Liabilities

4.    As previously reported, certain entities in Mayibuye Group have exercised its rights in
      respect of the securities held over the shareholding in the various subsidiaries in the Blue
      Group. Based on the aforegoing the Company can no longer consolidate the various
      subsidiaries into its financial statements in terms of the provision of IFRS and will
      accordingly reflect them only as investments.
5.    A settlement agreement has been reached in respect of the aforementioned liabilities. The
      details of which will be published together with the financial information referred to herein
      above.


Litigation Update

Herewith a brief overview of the key litigation that is creating uncertainty.


Debt Rescheduling Agreement (“DRA”)

6.    As previously advised it is the view of the Company that the process in terms of the DRA
      disputes have been completed and the accounts of the Company are in accordance with
      that.
7.    Despite being party to the dispute resolution proceedings instituted by the lender committee
      in respect of the Distribution Plan, four of the total body of Lenders instituted legal
      proceedings against the Blue Group which is viewed by Blue as a repudiation of the DRA.
      The litigation in question, instituted in: Zambia is to be heard in November2016; Botswana
      in December 2016 whilst the South African based litigation has to date not been set down
      for hearing.


Blue Cell based litigation

8.    Blue Cell, a subsidiary of the Company was liquidated in 2009 by the Company. It is alleged
      that the conduct of the previous management of Blue in 2009 that lead to the liquidation of
      the entity constituted a breach of an agreement with the minority shareholder



ABSA

9.      In terms of the 2011 forensic investigation, it was determined that Dave Van Niekerk, the
      previous CEO of Blue, had ceded an illicit loan claim to ABSA bank in payment of his
      personal debt to ABSA. The Company made payment in terms of that claim in 2009 in an
      amount of R35 million to ABSA bank.
10.     The Company has issued summons for repayment of the amount against ABSA bank,
      who has joined Van Niekerk as a party to the proceedings.



Envalue

11.    Envalue has filed a claim against Blue SA in the amount of R 7,884,605.53 in respect of
      alleged compensation for services rendered during 2010.
12.   The matter is enrolled to be heard in November 2016.


SARS Claims

13.   Based upon the forensic report, into the affairs of Blue prior 2010 under the leadership of
      the previous CEO, Dave van Niekerk, it was established that Blue, regardless of what was
      reported at the time, never made any profits from 2007 up to the Company’s financial
      collapse under the previous management in 2010. Consequently, Blue has been assessed
      for income tax which is inappropriate based upon these subsequent discoveries and have
      objected to the assessment and the payment of such taxation.
14.   As a further consequence of the undisclosed liabilities the amounts paid for such foreign
      taxation need to be deducted from the assessment as raised by SARS.

Date: 29/09/2016 02:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story