AN EAST London property developer has accused Absa Bank of bullying and maladministration after a financial deal between the two soured.
While property giant Grant Furstenburg fights the possible liquidation of one of his companies in the Grahamstown high court, his attorneys have hit back with threats of a R400million counterclaim.
And this week Furstenburg - the developer behind several properties around the city - secured 11 local contractors to back him in court.
At the centre of the financial feud is Furstenburg's latest development, Furstenburg Grand, which was partially financed by Absa Bank Limited SA.
In March 2006 Furstenburg purchased the then Dolphin Hotel in Nahoon Mouth. And in August that year he approached Absa for a development loan of almost R50million. Absa agreed on condition that 42 of the 67 up-market apartments were sold before development kicked off.
Construction commenced in May 2007, but according to court documents, the relationship between the parties soured just eight months later.
And on completion of the five-storey building in March 2010, Absa slapped Furstenburg with court action, demanding repayment of the R50million, claiming he had failed to uphold the terms of the contract.
According to Absa credit analyst, Renette Kruger, the loan was to be repaid by September 20, 2008. She said Furstenburg had "failed" to pay back the monies despite several letters of demand.
Now Furstenburg has hit back, claiming Absa short- payed him R3,8million.
He said payment from Absa had ceased just five months into the development.
As a result, contractors could not be paid and they began walking off site, contributing to the 18-month delay in completion.
At that point, Furstenburg claims he had already sold about 38 of the apartments, but due to the problems encountered, 27 investors withdrew their offers to purchase. Furstenburg lost R55million worth of sales.
In his affidavit, he stated that the application for the winding up of his company, Furstenburg Property Developments, was "an abuse" of court proceedings. He said the bank was well aware that he could pay his debts.
Representing Absa, attorney Burton Meyer said he was in the process of consulting witnesses, after which he would file an extensive reply.
In the meantime, 11 of the city's contractors have signed affidavits in support of Furstenburg's defence.
Property developer, Absa in legal battle
AN EAST London property developer has accused Absa Bank of bullying and maladministration after a financial deal between the two soured.
While property giant Grant Furstenburg fights the possible liquidation of one of his companies in the Grahamstown high court, his attorneys have hit back with threats of a R400million counterclaim.
And this week Furstenburg - the developer behind several properties around the city - secured 11 local contractors to back him in court.
At the centre of the financial feud is Furstenburg's latest development, Furstenburg Grand, which was partially financed by Absa Bank Limited SA.
In March 2006 Furstenburg purchased the then Dolphin Hotel in Nahoon Mouth. And in August that year he approached Absa for a development loan of almost R50million. Absa agreed on condition that 42 of the 67 up-market apartments were sold before development kicked off.
Construction commenced in May 2007, but according to court documents, the relationship between the parties soured just eight months later.
And on completion of the five-storey building in March 2010, Absa slapped Furstenburg with court action, demanding repayment of the R50million, claiming he had failed to uphold the terms of the contract.
According to Absa credit analyst, Renette Kruger, the loan was to be repaid by September 20, 2008. She said Furstenburg had "failed" to pay back the monies despite several letters of demand.
Now Furstenburg has hit back, claiming Absa short- payed him R3,8million.
He said payment from Absa had ceased just five months into the development.
As a result, contractors could not be paid and they began walking off site, contributing to the 18-month delay in completion.
At that point, Furstenburg claims he had already sold about 38 of the apartments, but due to the problems encountered, 27 investors withdrew their offers to purchase. Furstenburg lost R55million worth of sales.
In his affidavit, he stated that the application for the winding up of his company, Furstenburg Property Developments, was "an abuse" of court proceedings. He said the bank was well aware that he could pay his debts.
Representing Absa, attorney Burton Meyer said he was in the process of consulting witnesses, after which he would file an extensive reply.
In the meantime, 11 of the city's contractors have signed affidavits in support of Furstenburg's defence.
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