Loan advances by Beneficio Developments (Pty) Ltd
- jp55467
- Sep 11
- 4 min read
Updated: Sep 17
Executive Summary - Loan advances by Beneficio Developments (Pty) Ltd
This Executive Summary provides a high-level overview of the loan advances made by Beneficio
Developments (Pty) Ltd to two entities within the Nova Group of Companies: Tarentaal Centre
Investments (Pty) Ltd and The Village Mall Investments (Pty) Ltd.
Important - While these two companies are not directly tied to current Debentures and henceforth
do not fall within the domain of the Debenture Trust Deed, the Board's actions have had a significant
negative financial impact on the entire Nova Group, indirectly affecting Debenture Holders.
Loan agreements
The core issue is a series of escalating financial and legal liabilities stemming from the Board's
management of a single, initially small, short-term loan.
Initial loan and escalations
What began as a R 40 million loan with a three-month term in December 2017 grew into a total
exposure of R 55 million through repeated extensions and additional loan agreements at an
interest rate of 1% per week, and despite eventually having the funds available from the sale of
another property, the Board chose to extend the high-interest loan instead of settling the debt.
Legal mismanagement
When Beneficio initiated legal action due to non-payment, the Board chose to defend the claim
by arguing the interest rate was "unlawful," a position contrary to established legal precedent.
This protracted and ultimately unsuccessful legal battle, pursued all the way to the Supreme
Court of Appeal and the Constitutional Court, has resulted in massive costs with both courts all
ruled in favour of Beneficio and every time issuing a cost order against Nova. The total legal
liability is estimated at a minimum of R5 million.
Overall financial liability
The reckless actions by the Board have transformed an initial debt of R 15.67 million into a
cumulative liability of approximately R 67.5 million. This represents an additional R 52 million in
liabilities that could have been used to address critical financial needs of the Group and
Debenture-linked properties, such as:
- Settling tax liabilities;
- Paying trade creditors; and
- Funding urgent infrastructure repairs at various properties.
Questionable financial reporting
The company's audited financial statements for the year ending 29 February 2024 disclose a
receivable asset of R 19.67 million based on the claim of "virtual certainty" that Nova would
recover this amount from Beneficio. This is in direct contradiction to multiple court rulings against
Nova and an ultimate liability payable to Beneficio totalling at least R 67.5 million.
This discrepancy raises serious concerns about the accuracy of financial reporting of the Board as
well the oversight functions of the Audit Committee as well as external auditors.
Operational mismanagement
The Board also failed to pay utility accounts for the two properties, even though tenants were
making payments. This led to the disconnection of electricity, causing significant disruption and
financial loss to tenants. This failure required a key tenant, the Spar Group, to make a direct
payment of R1.8 million to the municipality to restore services.
Conclusion
The Board's actions concerning the Beneficio loan demonstrate a pattern of financial
mismanagement and reckless decision-making. The resulting financial and legal liabilities
significantly erode Nova's financial stability, indirectly harming all Debenture Holders.
A more detailed disclosure of the aforementioned facts, along with references to the underlying
supporting documentation, is provided in the annexures attached to this Executive Summary.
Kind regards
Jean-Pierre Tromp
In my capacity as Trustee of the Debenture Trust
Comment – 17 September 2025
On 17 September 2025, I received an email from Mr. Connie Myburgh, Chairman of the Nova Group of Companies, in response to this Memorandum.
The email, titled “Nova - Benficio (Response from Nova)” is attached for reference. The email from Mr. Myburgh contained no supporting documentation to substantiate his statements, which limits the ability to verify the accuracy of his statements.
Mr. Myburgh’s comments are as follows:
‘Mr Tromp.
We refer to your email dated 11 September and the attachments thereto, and specifically the attached Memorandum.
In the Memorandum you allege mismanagement by and negligent and reckless actions on the part of the Nova Group's directors regarding the so-called Beneficio matter.
Your allegations of mismanagement, negligence and recklessness are baseless and devoid of any truth and are rejected.
The content of your Memorandum does not sustain allegations regarding actions amounting to mismanagement, negligence, or recklessness on the part of the directors.
We reserve our rights regarding your allegations of mismanagement, negligence, and recklessness.
Your Memorandum and the conclusions arrived at by you, are defamatory and are rejected.
Your Memorandum furthermore ignores certain crucial facts concerning the Beneficio matter, which facts underly a different narrative. We are not recording these facts currently, buy reserve our rights to do so.
You undoubtedly were aware of these facts, or ought to have been aware of same, and you ought to have dealt with these facts, had you intended to opine in an objective, true and correct manner, in order to provide the full and correct picture, but which you failed to, or chose not to do. We reserve our rights in this regard.
We furthermore reserve our rights to institute legal action against you, based on your defamatory statements.
As you took the liberty to publish and disseminate your defamatory narrative on your website, please also publish this response, verbatim, on your website.
Please confirm that you will so publish.
Connie Myburgh
Nova PropGrow Group Holdings Limited.’
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