Hawks probe Redisa’s directors

Criminal charges on cards

THE DIRECTORATE of Priority Crime Investigations (Hawks) are investigating criminal charges against the Recycling and Economic Development Initiative of South Africa (Redisa) and all its directors.

The directors of Redisa, according to the company’s webpage, are chief executive Hermann Erdmann, Stacey Davidson, Charline Kirk, Redisa chairperson and non executive director Xolani Qubeka, Kabela Maroga, Barbara Nompumelelo Tapela and Elinor Sisulu.

Albi Modise, a spokesperson for the Department of Environmental Affairs, confirmed that the department had laid fraud and theft charges against Redisa and all its directors in February this year.

He also confirmed that the Green Scorpions within the department have been investigating charges related to contraventions of the Waste Tyre Regulations and the National Environmental Management Waste Act.

Stacey Davidson of Redisa, said yesterday that they were unaware of any such charges, but these charges would in any event “have no factual basis”.

She said that Redisa was in the process of preparing answering papers to set aside the provisional liquidation order obtained without notice to Redisa by environmental affairs minister Edna Molewa, which would address in detail the “defamatory allegations made about the company and its management”.

Modise’s confirmation of the criminal charges being investigated against Redisa and its directors follows Molewa on June 1 successfully applying to the Cape High Court for the provisional liquidation of the company “to safeguard the operations and assets”.

Redisa is the only approved waste tyre plan in South Africa and has collected more than R2 billion since it launched its operations in 2012.

The funds were collected via a levy paid by tyre manufacturers, which recovered the cost through increased tyre prices paid by consumers, and were supposed to be used for the collection and environmental disposal of the waste tyres.

In an almost 200-page affidavit in support of Redisa’s liquidation, Molewa provided a litany of damning allegations against the company and its directors, including that she suspected Redisa had succeeded in transferring almost R30 million of public funds intended for the implementation of the waste tyre plan out of the country and that Redisa had failed to meet the targets laid down in the plan. Molewa said Redisa was not properly managed.

Further allegations by Molewa included that “staggering amounts” were channelled as management fees to a host of companies in which the executive directors of Redisa had a financial interest.

The combined expenditure by Redisa on the fees of executive directors and staff of Redisa, comprising about seven people, was a total of R1.7 million a month.

Overpaid Over and above fees earned for services rendered by the non executive directors of Redisa to the amount of about R2m, these directors were also paid an amount of R1.297m as fees for the mere acceptance of a directorship in the company.

Molewa said Erdmann’s remuneration “is excessive and prohibited by the memorandum of incorporation of Redisa”.

Further allegations were that Redisa had purchased a freehold property for R18.7m, which fell completely outside the mandate of Redisa. It owned motor vehicles to the depreciated value of R4.14m, which was not authorised in the Redisa plan, and employed a security company to secure the private residences of the directors at a cost of R63 933 a month.

Davidson told Business Report last week that the application for the liquidation of Redisa was “nothing but a hostile takeover” and denied any wrongdoing by Redisa or its directors.

roy.cokayne@inl.co.za