Redisa’s al­leged miss­ing mil­lions

The Star Early Edition - - NEWS - Roy Cokayne

EN­VI­RON­MEN­TAL af­fairs min­is­ter Edna Molewa sus­pects that the Re­cy­cling and Eco­nomic De­vel­op­ment Ini­tia­tive of South Africa (Redisa) has suc­ceeded in trans­fer­ring al­most R30 mil­lion of pub­lic funds that were in­tended for the im­ple­men­ta­tion of the Redisa waste tyre plan out of the coun­try.

This was one of a litany of damn­ing al­le­ga­tions made by Molewa in an al­most 200-page af­fi­davit in sup­port of the suc­cess­ful ap­pli­ca­tion to the Cape High Court last week to place Redisa, the only ap­proved waste tyre plan for the coun­try, in pro­vi­sional liq­ui­da­tion.

Molewa added that a doc­u­ment pro­vided to her de­part­ment anony­mously by a Redisa em­ployee, if con­firmed as cor­rect, con­firmed that “the fund­ing from the pri­vately col­lected Redisa con­tri­bu­tions are si­phoned off to other com­pa­nies and/or en­ti­ties and/or even to for­eign shores for the ben­e­fit of the in­di­vid­u­als be­hind this grand scheme”.

About R2 bil­lion has been col­lected to date by Redisa from the tyre in­dus­try.

Mis­ap­pro­pri­a­tion

Molewa said Redisa was not prop­erly man­aged and was the tar­get “of at least an at­tempt, if not ac­tual mis­ap­pro­pri­a­tion”.

The ur­gent liq­ui­da­tion court ap­pli­ca­tion was made “to safe­guard the op­er­a­tions and as­sets” associated with the Redisa plan.

Con­sumers ul­ti­mately pay the waste tyre levy through in­creased re­tail tyre prices.

In her af­fi­davit, Molewa said the pay­ment of “stag­ger­ing amounts” were chan­nelled as man­age­ment fees to a host of com­pa­nies in which the ex­ec­u­tive di­rec­tors of Redisa had a fi­nan­cial in­ter­est.

She claimed Redisa uni­lat­er­ally and without au­tho­ri­sa­tion chan­nelled pub­lic fund to var­i­ous other en­ti­ties in which Redisa chief ex­ec­u­tive Her­mann Erd­mann, his di­rect fam­ily mem­bers and/or di­rec­tors and/or stake­hold­ers in Redisa per­son­ally stood to ben­e­fit.

Redisa had paid an amount of R108.347m as “man­age­ment fees”, pre­sum­ably to Kusaga Taka Con­sult­ing, of which Erd­mann was a di­rec­tor, for the man­age­ment of the Redisa plan.

Molewa ques­tioned why, if this man­age­ment com­pany was com­pen­sated for im­ple­ment­ing and ad­min­is­ter­ing the Redisa plan and had taken over the op­er­a­tional re­spon­si­bil­i­ties of Redisa, it was nec­es­sary to em­ploy four ex­ec­u­tives and three non ex­ec­u­tive di­rec­tors and a num­ber of em­ploy­ees “to the tune of a fur­ther R107.076m” or to pro­vide them with mo­tor ve­hi­cles val­ued at R4.14m or to re­fur­bish of­fices for R6.486m when Redisa had con­tacted its op­er­a­tional re­spon­si­bil­i­ties out to an­other profit com­pany.

24 com­pa­nies

Com­pa­nies and In­tel­lec­tual Prop­erty Com­mis­sion records showed that Erd­mann was a di­rec­tor or share­holder of 24 other com­pa­nies and in ev­ery in­stance ac­com­pa­nied by at least one or more of the fol­low­ing di­rec­tors of Redisa: StaceyInger David­son, Christo­pher Crozier, Reza Daniels, Char­line Kirk, Alexan­der Erd­mann, the son of Her­mann Erd­mann.

Most of the pri­vate profit com­pa­nies in which Erd­mann had an in­ter­est as a di­rec­tor had ex­actly the same reg­is­tered phys­i­cal ad­dress as Redisa.

A re­view team re­port sub­mit­ted to Molewa’s de­part­ment in Fe­bru­ary this year found that the re­mu­ner­a­tion pack­ages of the non ex­ec­u­tive di­rec­tors of Redisa was in ex­cess of R160 000 a month, ex­clud­ing their fringe ben­e­fits.

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

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

Molewa said Redisa had also:

Pur­chased a free­hold prop­erty for R18.7m, which falls com­pletely out­side the man­date of Redisa as set out in its plan.

Owns mo­tor ve­hi­cles to the de­pre­ci­ated value of R4.14m.

Done “of­fice re­fur­bish­ment” for the de­pre­ci­ated amount of R6.486m.

Em­ployed a se­cu­rity com­pany to se­cure the pri­vate res­i­dences of the di­rec­tors at R63 933 a month.

Spent a to­tal of R17.056m since in­cep­tion un­til end-Fe­bru­ary last year on mar­ket­ing and ad­ver­tis­ing.

* See page 18 on how Redisa failed to meet its tar­gets.

roy.cokayne@inl.co.za

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