Giant’s demise ‘not surprising’
Pamodzi misgovernance allegations a wake-up call for other black companies
Businessman Peter Vundla has expressed his sadness at the near demise of Pamodzi Group, a company he was a shareholder in until he left in a huff more than a decade ago.
Vundla, who was alerted to the allegations of misgovernance at Pamodzi by Sunday World, said he was not surprised the company was going downhill.
Vundla said the self-inflicted problems besetting Pamodzi must be a wake-up call to the black-owned and -managed business to get their house in order.
Vundla said: “I was never one to say ‘I told you so’. This news, if true, is distressing and is a blemish on the journey to black economic freedom.
“The much-needed black economic empowerment is sullied by such revelations. Let this be a lesson to all aspiring black businesses,” he said.
Vundla’s memoir, Doing Time, published in 2013, was almost prophetic.
“By day, the Pamodzi management really worked the investments. They were truly value-adding empowerment partners,” he wrote.
“But I did not have an after-hours or weekend relationship with them. When not talking business, I found them rather remote and disengaged. I actually had little in common with them.
“Often, I would be called in to intervene in infighting, even on such silly matters as witchcraft.
“Ndaba [Ntsele] called me once to complain about threats of violence from one of his executives. It was just too much for me to bear.”
The financial statements of Pamodzi Group paint a grim picture of a company that used to be flush with cash.
As at end of August 2020, the company’s liabilities exceeded its assets by R3.4-million, making the group technically insolvent.
The situation could have been worse had the group’s subsidiary Pamodzi Coal called in the R34.5-million loan it extended to the holding company.
The financial statements show Pamodzi
Coal subordinated the loan to help the group with its insolvent position.
The statement further shows that the R34.5-million claim will be in abeyance “until such time the assets fairly valued will have exceeded the liabilities”.
The group’s worsening financial position is compounded by its subsidiary Pamodzi Management Services (PMS), which has borrowed R216-mil- lion from the holding company that it can’t pay back. Auditors also declared PMS technically insolvent.
The R216-million loan was impaired in Pamodzi Group’s financials. “The provision for the loan impairment relates to the impairment of the intercompany loans over the years whereby the amounts owed are highly unlikely to be recoverable.
“Pamodzi Management Services is a cost centre of Pamodzi Group and hardly generates any revenue,” a source said.