With eight tenants already having left King's Mall since the beginning of the year - and the upmarket Baron's Select deli planning to move to the new Hemingway's Mall once it's completed - the success of the Gonubie centre appears far from certain.
Tenants who remain at the mall are now paying their rent directly to Nedbank after the centre's owners, King's Financial Services (Kingfin), were placed under provisional liquidation on July 21.
Kingfin has until August 14 to give reasons why the order should not be made final.
The action comes after an inspection report compiled by the Financial Services Board (FSB) alleged that Kingfin directors Adrian, Paul and Stephen King had misappropriated investors' money and misled investors as to the safety of their investments.
The report says Kingfin developed serious cash-flow problems in February 2008, as rental income from their commercial properties began to take a knock from the recession.
The company then issued shares worth R71m to the public, allegedly in breach of the provisions of the Companies Act, and more shares were issued than existed.
King's Mall, which boasts 47 shops and 337 lock-up storage units, formed part of Kingfin's commercial property projects.
The mall celebrates the first anniversary of its official opening at the end of this month although some shops, including anchor tenant SuperSpar, have been running since last March.
SuperSpar owner Götz von Westernhagen, who also owns Baron's Select and Tops Liquor, said on Tuesday he was expecting tough times ahead.
But he said the SuperSpar and Tops Liquor store would remain at the mall, as he was still bound to a lease agreement.
“The situation around Baron's Select is different, though, as they (Kingfin) have reneged on the conditions of the lease agreement and, as such, the lease has been cancelled,” he said.
Von Westernhagen offered no date for when Baron's would move to Hemingway's.
He said he knew of eight tenants who had left the mall since the beginning of the year, with the latest being the Vodashop outlet, which closed this weekend.
Kingfin declined to comment and referred questions to liquidator Rynette Peters, who had not responded by the time of going to press.
Source: Daily Dispatch
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