Annisa Essack | kzn@radioislam.org.za
19 February 2025 | 10:30 CAT
3 min read

FULL INTERVIEW – CLICK HERE

Al Mabroor Investments (PTY) Ltd, a major player in agricultural and diversified investment projects, is facing financial distress. Many investors are frustrated by delayed payouts and declining profits. Amid mounting concerns, the company has now been placed under business rescue, raising fresh questions about its future. Al Mabroor Investments’ financial difficulties, non-executive director Yaseen Badat joined Mawlana Sulaiman Ravat on Sabahul Muslim to address investor concerns, the business rescue process, and the company’s future.

Investor Concerns and Payment Delays

Many investors have reported:

• There are long delays in withdrawal requests, with some waiting over a year.
• Unpaid declared profits despite previous assurances.
• A drop in profit margins raised fears about the company’s financial stability.

Badat explained that the livestock investment division was hit by a “perfect storm” of financial difficulties. These included:

• A downturn in the agriculture sector affects overall profitability.
• An investor panicked, and numerous investors sought withdrawals at the same time.
• Liquidity and cash flow issues, as new investments were not coming in fast enough to offset withdrawals.

The company attempted to sell assets to manage this crisis, but market conditions made securing buyers at favourable prices difficult.

Understanding the Business Structure

Al Mabroor Investments operates under different investment pillars, including:

• Agri Fund (livestock investments).
• Student Housing Fund (properties in Gauteng).
• Hospital Fund (linked to the Road Accident Fund).
• Vehicle Finance Project.

While the Agri Fund has faced the most significant challenges, some issues have also emerged in other investment divisions. However, each division operates independently.

Business Rescue: What It Means for Investors

Due to growing financial concerns, a group of investors filed for business rescue, which the court approved.

What Changes Under Business Rescue?

• Court-appointed business rescue practitioners (BRPs) will now oversee the company.
• The board and management team must take instructions from the BRPs.
• The primary goal is to stabilise operations and restructure finances.

However, this process raises new challenges:

• Extended payout timelines—investors may have to wait months or even years.
• High costs—BRPs typically charge R1,700–R2,000 per hour, which investors must cover.
• Investor uncertainty—the outcome depends on asset sales and recovery plans.

Fraud Allegations: Was Mismanagement Involved?

Badat confirmed that there is no evidence of fraud or theft based on all available board reports and oversight reviews. However, he acknowledged that:

• Poor communication and strategic missteps may have worsened the situation.
• Diversification into multiple sectors may have overextended resources.
• Some investor concerns were not addressed early enough, leading to panic.

Will Investors Get Their Money Back?

The business rescue practitioners will determine the next steps, including:

• Selling assets to repay investors—but quick sales may result in losses.
• Restructuring the company—some investors may be able to stay invested in new projects.

Key Takeaways For Investors

• Immediate withdrawals may not be possible.
• Market conditions will determine whether full capital returns are achievable.
• Patience may lead to better recovery, while urgent withdrawals could mean losses.

Concerns Over Management and Salaries

Many investors questioned whether management continues to earn salaries while they face losses. Badat clarified that:

• Non-executive board members receive no salaries.
• Executive board members only earn when the business is profitable.
• Operational costs (staff salaries, administration) are paid from their funds, not investor money.

Next Steps for Investors

• The business rescue practitioners will present a formal recovery plan in the coming weeks.
• Investors should stay informed and engage with the BRPs.
• The success of asset sales and the willingness of investors to remain patient will impact the final outcome.

Final Thoughts

The future of Al Mabroor remains uncertain, but the company is now in a critical restructuring phase. Investors are urged to remain patient, seek clarity, and avoid panic-driven decisions as the process unfolds.