Em­pow­er­ment fund crit­i­cised for not help­ing com­mu­nity projects

The Star Late Edition - - FRONT PAGE - DON MAKATILE

THE NA­TIONAL Em­pow­er­ment Fund (NEF) is fight­ing to re­coup just over R3.5 mil­lion paid back as a VAT re­fund to one of its ben­e­fi­cia­ries, and was ex­pected to take the mat­ter to court to­day.

The Or­ange Farm Com­mu­nity Trust re­ceived fund­ing to the amount of R50m from the NEF to­wards the ac­qui­si­tion of a 10 per­cent stake in a shop­ping mall in the area, val­ued at R500m in 2014.

Four other stake­hold­ers own the rest of the shares.

Set up in 2011, the trust had as its ob­jec­tive the de­sire to see to the so­cio-eco­nomic needs of the ben­e­fi­cia­ries, the com­mu­nity of Or­ange Farm, a town­ship in the Vaal area south of Joburg.

At the heart of the mat­ter is the al­le­ga­tion by the trus­tees that the NEF had never dis­bursed any funds to them to as­sist with set­ting up com­mu­nity projects in Or­ange Farm.

One of the trus­tees, Suzan Nte­bo­he­leng Mosia, de­posed an af­fi­davit last year, stat­ing that “the loan agree­ment does noth­ing more than caus­ing im­mense harm to the in­ter­ests of the Or­ange Farm com­mu­nity”.

The trus­tees al­lege that any money that should ac­crue to the trust from their shares of the lo­cal Eyethu Mall should not go to any­one but the trust.

Mem­bers of the com­mu­nity come to the trust each time they need help to­wards any of their needs, but to their dis­may, they in­vari­ably find that the trust is in no po­si­tion to help them.

In her af­fi­davit, Mosia says: “The trust has no money at all. The trust has no money to rent and pay for of­fices; no money to or­gan­ise com­mu­nity meet­ings to in­form them about the sta­tus of the loan agree­ment through ra­dio and print an­nounce­ments, among oth­ers. Sim­ply put, the trust is dys­func­tional.”

She adds: “This is mainly be­cause the ap­pli­cant is in full con­trol of the fi­nan­cial ad­min­is­tra­tion of the loan agree­ment, much to the un­law­ful ex­clu­sion of the other party to the loan agree­ment, the trust.”

When rental col­lec­tion agency Broll Prop­erty gets the monthly rev­enue from the ten­ants and dis­trib­utes it to the share­hold­ers, not a cent comes into the cof­fers of the trust, the trus­tees say.

They al­lege the money goes to the NEF, who do noth­ing for the com­mu­nity. This, the trus­tees say, “flies in the face of the ob­jec­tives upon which the Na­tional Em­pow­er­ment Fund was founded”.

NEF spokesper­son Moemise Mot­sepe says: “Driven by the NEF’s man­date of grow­ing black eco­nomic par­tic­i­pa­tion in South Africa, the in­vest­ment ra­tio­nale was for the pur­pose of sup­port­ing lo­cal eco­nomic devel­op­ment, pro­mot­ing en­trepreneur­ship, prop­erty devel­op­ment and ownership, en­abling skills trans­fer and em­ploy­ment cre­ation, and fa­cil­i­tat­ing sus­tain­able com­mer­cial value for the com­mu­nity.”

He is un­able to say which spe­cific projects, if any, the NEF’s help has es­tab­lished in Or­ange Farm.

Mot­sepe says of the mat­ter: “The busi­ness has grown ap­pre­cia­bly over the past four years, and the NEF has re­lied on its vast ex­pe­ri­ence and ex­per­tise as a lead­ing devel­op­ment fi­nancier to help max­imise ben­e­fits for the com­mu­nity, an ob­jec­tive to which we are stead­fastly com­mit­ted.”

The trus­tees be­lieve none of this is true. They claim their at­tempts to set­tle their loan agree­ment with the NEF have been ig­nored.

Says Mot­sepe: “As a pub­licly funded devel­op­ment fi­nance in­sti­tu­tion, the NEF has the moral and le­gal obli­ga­tion to en­sure that the re­sources en­trusted to its care are used ju­di­ciously and dili­gently.”

But it would ap­pear that the money in­tended to ben­e­fit the com­mu­nity of Or­ange Farm is ex­cluded from this fidu­ciary role that the NEF cham­pi­ons.

In­stead, all they seem in­tent on do­ing is to de­cide on the com­po­si­tion of the trust’s board, which is hardly their prov­ince.

The dis­puted wind­fall has been frozen and sits in a Ned­bank ac­count.

The bank is also cited as a re­spon­dent in the NEF sum­mons to re­cover the funds.

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