Publication: Cape Times Issued: Date: 2006-08-10 Reporter: Fatima Schroeder Reporter: Reporter:

Local BEE Trust in Court for 'Huge Fraud'

 

Publication 

Cape Times
Date

2006-08-10

Reporter

 Fatima Schroeder

Web Link

www.capetimes.co.za

 

German company demands money back

The Cape High Court is to hear an application today by German company MAN Ferrostaal to have non-profit and Black Economic Empowerment organisation Atlantis Economic Development Trust provisionally wound up, after massive fraud, allegedly by its trustees - including its former chairman ANC MP Danny Olifant - was exposed.

Olifant, who is also one of the accused the parliamentary travel scam trial, resigned as chairperson and member of the trust last month and told trust CEO Wilfred Williams that he feared being criminally prosecuted by Ferrostaal.

In court papers it emerged that the alleged fraud included the receipt of R2 million from Ferrostaal for the purchase of premises, which was not used for the purpose because the property had been donated to the trust by another company.

Besides Olifant, the other trustees are Quinton Pick, Rebecca Davids and Jerome Levendal and Selwyn Hockey - the attorney who has been representing various ANC MPs in the Travelgate trial.

In terms of a loan agreement entered into in 2003, Ferrostaal advanced R25 million to the trust for the upliftment of the Atlantis community.

Now the German company wants the trust to repay the loan amount in full, plus interest, saying the trust had breached the agreement.

In an affidavit before the Cape High Court, Williams said the trust was unable to pay its debts and that it had a R1 000 overdraft in its First National Bank account.

He also said that it owed Telkom R85 000 because of non-payment of its telephone account and that its telephones had been disconnected, preventing it from having any internet access.

In addition, the trust also has a monthly salary bill of R17 000 and its 31 employees have not been paid since April.

The trust has a number of creditors.

Lecturers at the Atlantis Education and Training Institute, which is operated by the trust, have stopped working as a result of non-payment of salaries, and the students, who have paid their fees, are left without any instruction.

Williams said the trust had poor record-keeping and that there were instances of wrongdoing on the part of certain trustees.

One of these was that Ferrostaal had concluded a loan agreement with the trust, which included an amount of R2.14m for the purchase of premises.

But no property was bought.

Instead 3M South Africa donated it.

He said Ferrostaal had paid the money for the purchase into the trust account of an attorney and that various amounts were paid out of this account.

With acknowledgements to Fatima Schroeder and Cape Times.


MAN Ferrostaal is the industrial participation partner in the German Submarine Consortium. Most of their activities in the country relate to submarine contract NIP.

This is a case of biting the hand that feeds.