Kirkinis-Linked Luxury Beach for Sale After Bank CollapseRenee Bonorchis
A luxury seaside property linked to Leon Kirkinis, founder and former chief executive officer of the collapsed African Bank Investments Ltd., is on sale in South Africa’s Western Cape for 60 million rand ($5.6 million).
Kirkinis, 54, is an executive director of UPbeatprops 167 (Pty) Ltd., according to Johannesburg-based African Bank’s annual report. In municipal documents the property company is listed as owning the house on Arctotis Road in Rooi Els, a village that looks across False Bay to Cape Town one hour away.
The beach home is described as having four en-suite bedrooms, a pool, jacuzzi, wine cellar, gym area, underfloor heating and automated timber shutters that open hydraulically to create verandas. The property offers a “combination of luxury living in the heart of nature,” Acquire Africa, the estate agent selling the house, said on its website. Acquire’s founder, Tara Whiting, declined to comment when contacted by phone yesterday, citing client confidentiality.
Abil, as the lender is known, failed last month after it forecast record losses and said it needed at least 8.5 billion rand to survive. The central bank stepped in and appointed a curator to save Abil’s performing loans book. Senior debt holders were told they would lose 10 cents in every rand of investment while subordinated debtholders, preference shareholders and ordinary shareholders may lose everything.
Kirkinis, who stepped down as Abil’s CEO on Aug. 6, didn’t answer a call to his mobile phone or immediately respond to a voicemail message today.
UPbeatprops, registered at South Africa’s Companies and Intellectual Property Commission in Feb. 1998, bought the Rooi Els property where the house now stands for 3.7 million rand that year, according to a report from the property24 website.
The lot is the biggest in the village at 1.47 hectares (3.6 acres), according to municipal documents for the Overstrand district. The home was completed in 2011 by Elphick Proome Architects Inc. in Durban, according to the architects’ website.
The client was “a maverick businessman from Johannesburg” and the building was first sketched “on a paper napkin over a calamari lunch” in the seaside resort of Hermanus five years before completion, according to the architects. It required the biggest steel galvanizing undertaken in South Africa at the time, while the transport of large materials along small, windy seaside roads and dirt tracks “demanded special permits,” according to Elphick Proome.
The house has a steel structure and took four years to build, according to Elphick Proome, which won the residential category in the 2013 Steel Awards for the Rooi Els home.
George Elphick, a founding partner of the firm of architects and part of the project team on the Rooi Els house, didn’t immediately respond to messages and his colleague Janeta Rockey declined to comment on the house.
The house appears to have been for sale since May, according to South African Afrikaans-language newspaper Rapport. That month African Bank posted a record fiscal first-half loss of 4.38 billion rand as bad debts jumped. Two weeks later, Moody’s Investors Service downgraded its foreign credit rating to junk.
In 2012 Kirkinis was ranked the 37th wealthiest person in South Africa in the annual Sunday Times Rich List, with his holding in Abil valued at an estimated 660 million rand. By November, when the company held a rights offer, his stake was worth 274.1 million rand. Following the bank’s breakdown all of his holdings may be wiped out.
Abil and its management will be investigated for evidence of fraud, reckless lending and lack of disclosure in the wake of the company’s collapse, South Africa’s central bank said yesterday. The investigation will take five months, with a written report due a month after that, the Pretoria-based South African Reserve Bank said.
The probe will seek to determine if “any business of African Bank was conducted recklessly, negligently or with the intent to defraud depositors,” the central bank said. It will also probe management practices, material non-disclosures, and any intent to defraud depositors while identifying people “party to such questionable practices.”