‘They used me’ – man sues BEE part­ners

CityPress - - News - SIZWE SAMA YENDE sizwe.yende@city­press.co.za

In a case his lawyer has la­belled “grand scale fronting”, a 46-year-old Gaut­eng man has taken his part­ners in a BEE ven­ture to court for short­chang­ing him in a panel beat­ing busi­ness worth an es­ti­mated R16.2 mil­lion.

Joseph Masana claims in pa­pers be­fore the North Gaut­eng High Court that his 40% share at El­e­gant Square Panel­beat­ers im­proved the com­pany’s BEE rat­ing and drew it a lot of busi­ness over the past 11 years.

Although he is the com­pany’s man­ag­ing di­rec­tor, his part­ners, cou­ple Wil­lie and Petronella Saun­ders, re­stricted his po­si­tion to staff su­per­vi­sor and ex­cluded him from the man­age­ment of the com­pany. Wil­lie is a di­rec­tor with a 51% stake while his wife holds 9%.

The cou­ple al­legedly used Masana’s sig­na­ture and en­sured they all stood surety for a R2.5 mil­lion loan in 2004 to pur­chase the com­pany’s head of­fices in Pre­to­ria. In 2010, Masana claims that they all stood surety again for an R8 mil­lion loan to pur­chase a build­ing when the com­pany ex­panded to East Lon­don.

“Over 11 years the Saun­ders dom­i­nated and re­tained full and ex­clu­sive con­trol of all the fi­nan­cial records, bank state­ments and ac­count­ing books of the com­pany,” he says in his af­fi­davit. “To this end, I’ve not been paid any div­i­dends com­men­su­rate to the 40% mem­ber’s in­ter­est I hold in the com­pany. They are us­ing me as a mere to­ken to se­cure busi­ness,” Masana com­plains, adding that the com­pany has, since at­tain­ing its BEE sta­tus, clinched deals with rep­utable in­sur­ance com­pa­nies and gov­ern­ment de­part­ments such as the po­lice and cor­rec­tional ser­vices.

El­e­gant Square Panel­beat­ers has 78 em­ploy­ees at its Pre­to­ria and East Lon­don branches. On its web­site, it prides it­self on its level 3 BEE sta­tus. “The com­pany can be rated as a black em­pow­ered panel beat­ing shop. We also make use of BEE sup­pli­ers … ” it claims.

Wil­lie de­clined to com­ment. “You can’t speak to me, but my lawyer,” he said, but re­fused to pro­vide his lawyer’s con­tact de­tails. Masana’s lawyer, Ron­ald Lamola, said this was a “case of grand scale fronting”.

“My client is liv­ing from hand to mouth as an em­ployee while the white peo­ple are swim­ming in lux­ury through the black­ness of the client as they are able to ac­cess lu­cra­tive gov­ern­ment and pri­vate sec­tor con­tracts coun­try­wide,” Lamola said. Masana was ini­tially em­ployed in the com­pany in 1998 when it was still a sec­ond­hand car busi­ness. In 2003 he agreed to form a closed cor­po­ra­tion with the cou­ple and three other men – Peter Mashaba, Pi­eter Oosthuizen and Ge­orge Meyer. Mashaba, Oosthuizen and Meyer re­signed in 2004 and Masana’s share was in­creased to 40%. Masana fur­ther states he only saw from the 2012 au­dit state­ments that the com­pany had as­sets worth R16.2 mil­lion.

“I sus­pect that they have been se­cretly draw­ing div­i­dends from prof­its de­rived from the busi­ness for their ex­clu­sive use and per­sonal en­rich­ment,” he says, adding that the Saun­ders cou­ple had al­legedly bought nine prop­er­ties through­out the coun­try. Re­cently, he al­leges, the cou­ple bought a R1.4 mil­lion house in East Lon­don and an­other for R2.1 mil­lion in Pre­to­ria.

El­e­gant Square Panel­beat­ers

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.