State-owned IDC stands to lose R123 mil­lion

Weekend Argus (Saturday Edition) - - FRONT PAGE - BIANCA CAPAZORIO and SHAIN GERMANER

HUN­DREDS of mil­lions of rand are set to be flushed away in the murky dis­so­lu­tion of a com­pany in­volved in the con­tro­ver­sial Medupi power plant, and whose chief ex­ec­u­tive was re­cently found mur­dered in the veld in what in­ves­ti­ga­tors now sus­pect was a Brett Keb­ble-style “ar­ranged” mur­der.

The Week­end Ar­gus can re­veal the state-owned In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) stands to lose up to R123 mil­lion it in­vested in Cosira, a struc­tural steel com­pany in­volved in the Medupi power plant, and which was pro­vi­sion­ally liq­ui­dated last week.

Cosira is one of sev­eral sub­sidiaries of First Tech, all placed un­der pro­vi­sional liq­ui­da­tion last week, leav­ing some 800 em­ploy­ees in the lurch.

The IDC is just one of a num­ber of en­ti­ties, which also in­clude lead­ing banks and in­vest­ment houses like Ned­bank, In­vestec and the San­lam Group, which have been af­fected by the First Tech melt­down. It is be­lieved that the to­tal amount of ex­po­sure is in the re­gion of R925m.

It was re­ported this week that In­vestec said their loan to­talled R240m, but had been fully se­cured. In­vestec As­set Man­age­ment, how­ever, in­di­cated they had in­vested third­party funds into the com­pany, and th­ese would be af­fected by any loss of value First Tech ex­pe­ri­enced.

San­lam said pol­icy hold­ers would not be af­fected as their loan had been ad­e­quately pro­vided for, while Ned­bank echoed sim­i­lar sen­ti­ments.

There had been des­per­ate at­tempts to keep Cosira afloat, and it was just days af­ter a busi­ness res­cue ap­pli­ca­tion last month that the body of First Tech chief ex­ec­u­tive Jeff Wig­gill was found next to his black Bent­ley in an open field in Soweto. Only his wallet and phone were miss­ing.

Wig­gill’s death blew the lid on the fi­nan­cial melt­down of the com­pa­nies un­der his watch, as First Tech and many of its sub­sidiaries were also forced to file for busi­ness res­cue.

In the ap­pli­ca­tion for busi­ness res­cue, com­pany founder Andy Ber­tilus wrote that “share­hold­ers have dur­ing the last few months at­tempted to ease the com­pany’s im­me­di­ate cash-flow short­ages by not only pro­vid­ing the com­pany with im­me­di­ate fund­ing, but also by ne­go­ti­at­ing with var­i­ous third par­ties, in­clud­ing the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC), in an at­tempt to se­cure ad­di­tional fund­ing”. The busi­ness res­cue has failed, how­ever, and liq­ui­da­tion pro­ceed­ings have be­gun.

IDC spokesman Mandla Mpan­gase said yes­ter­day: “The IDC has an ex­po­sure of R123m in Cosira. No other fa­cil­i­ties were pro­vided to the group. In terms of our le­gal agree­ment, fund­ing was meant for ser­vic­ing con­tracts that Cosira had. Since the com­pany has been placed in pro­vi­sional liq­ui­da­tion, IDC fund­ing is at risk at this stage.”

He said it would be dif­fi­cult to say what to­tal losses would be un­til the liq­ui­da­tion pro­ceed­ings had con­cluded.

Charg­ing that the First Tech chief ex­ec­u­tive had been “solely re­spon­si­ble for the fi­nan­cial af­fairs of the group”, Ber­tilus wrote that “the tragic demise of Mr Wig­gill has placed not only the com­pany in a dire and in­vid­i­ous po­si­tion, but also the group as a whole”.

“Due to Mr Wig­gill’s un­timely demise and the de­pressed eco­nomic cli­mate… the group has in­curred sig­nif­i­cant losses,” he wrote.

But ques­tions have been raised about the killing, in­clud­ing that Wig­gill may have or­ches­trated his own mur­der by pay­ing a man R100 000 to kill him.

One of the men ar­rested for Wig­gill’s mur­der, Thu­lani Cele, told the Protea Mag­is­trate’s Court in his bail ap­pli­ca­tion this month that he was to be paid R100 000 to kill Wig­gill.

Po­lice in­ves­ti­ga­tors are prob­ing the pos­si­bil­ity that the money – and

the or­der – may have come from Wig­gill him­self.

If proven, it would be eerily sim­i­lar to the in­fa­mous 2005 Keb­ble mur­der.

The man who shot Keb­ble, Mikey Schultz, ad­mit­ted in court in 2010 that he and two un­der­world ac­com­plices were con­tracted to kill Keb­ble for R2m – and they suc­ceeded only af­ter three bun­gled at­tempts.

Wig­gill was found by the po­lice early on June 20, with gun­shot wounds to the head.

It is un­der­stood the fa­ther of five had been driv­ing near Mel­rose Arch when he was ap­par­ently hi­jacked and taken to Soweto.

The killing of Wig­gill mir­rored Keb­ble’s own shoot­ing in his car near Mel­rose Arch.

Keb­ble is said to have planned his own mur­der to ap­pear as a botched hi­jack­ing, at a time when his mas­sive group of min­ing com­pa­nies was un­der ex­treme fi­nan­cial pres­sure.

Liq­uida­tors are now poised to be­gin un­rav­el­ling the com­plex web of com­pa­nies un­der the First Tech um­brella.

Cosira was ac­quired by First Tech in De­cem­ber.

De­spite ma­jor con­tracts such as the Medupi plant in part­ner­ship with French gi­ant Al­stom, and the Kusile power sta­tion, both still be­ing built, the com­pany ap­plied for busi­ness res­cue on June 12 – a week be­fore Wig­gill’s mur­der.

JULY 27 2013


WHALE OF A TIME: One of South Africa’s big wave surfers gets up very close and per­sonal to this in­quis­i­tive young whale, which joined him and his fel­low surfers rid­ing the waves off Her­manus this week. See P3 for the full story and more pic­tures


RED BERETS: Kenny Kunene and mem­bers of the Eco­nomic Freedom Fight­ers make their way to the en­trance gate of the Univer­sity of Jo­han­nes­burg where ANC sup­port­ers and guards de­nied them ac­cess.

Jeff Wig­gill


BABY HEAVEN: Jenny War­wick, right, watches over her son Wil­liam at the Baby Ind­aba at the Cape Town In­ter­na­tional Con­ven­tion Cen­tre. The expo runs un­til 5pm to­mor­row. En­try is R60 for adults and R20 for chil­dren. There is free en­try for un­der-sixes.

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