The assets of Cape-based King Financial Services are set to go under the auctioneer's hammer next week in Johannesburg.

The group responsible for the R300-million King's Court centre in Port Elizabeth and the R120-million King's Mall in East London was placed under provisional liquidation on July 21 by the Cape Town High Court after an investigation by the Financial Services Board (FSB).

Liquidators Sanek Trust and Independent Recovery Services were appointed and have begun a disposal of the company's assets.

10 000 investors at risk

According to auctioneers Alliance Group, King Financial Services' investor base of about 10 000 could potentially lose about R640-million after the group's 90 companies collapsed. The three King brothers ran the property investment scheme from Wellington in the Boland and enticed investors with promises of enormous returns ? of up to 30 percent per month ? from commercial and residential developments.

Veterinarian Paul King committed suicide in August.

Alliance Group noted that the FSB found that the King Group, after developing cash flow problems earlier this year, issued shares to the public without registering prospectuses as required by the Companies Act. The report also stated that the company misrepresented available share capital and issued more shares than existed, acting in 'blatant disregard' of the requirements of the Act, it said.

"The board found that the company exposed shareholders to risk by realising profits before completion of projects, made misrepresentation when shares were marketed to the public and misappropriated client investments," the auctioneer said.

Liquidation applications

Wilson Bayly Holmes-Ovcon (WBO) brought a liquidation application against two King entities that had been developing shopping centres in Port Elizabeth and East London. Nedbank also brought an application for liquidation against one of several companies within Kingfin that develops commercial property, because of an outstanding mortgage of R140-million.

Alliance Group said that the first assets to go under the hammer would be two property developments in Polokwane and Centurion. The Polokwane development comprises 4.9ha with plans for an industrial development. The Heritage Hill Louwardia development is situated between Midrand and Pretoria and includes incomplete townhouses and two residential development stands.

"The various investors in Kingfin will now start seeing some of the group's assets coming under the auctioneers gavel with further auctions planned in the new year," said Alliance chief executive, Rael Levitt.