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Fraud, theft charges against directors entrusted with Nafcoc investments

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Fraud and theft charges opened against 12 directors entrusted to safeguard the investments of the National African Federated Chamber of Commerce and Industry

A group of 12 directors entrusted to safeguard the investments of the National African Federated Chamber of Commerce and Industry (Nafcoc) have allegedly hijacked the company to benefit themselves and their families.

A criminal case of fraud and theft was opened last month at the Sandton Police Station against the directors of the Nafcoc investment vehicle – Silver Vanity Investments (SVI).

Those allegedly implicated and under investigation include Silver Vanity’s CEO Gilbert Mosena, former Nafcoc president Lawrence Mavundla, Isaac Masekwameng, Motsepe Matlala, Mongezi Memani, Rosemary Modise, Churchill Mrasi, Harold Ndendela, Imogene Phaladi, Simon Ramodike, Teme Letsoela and Stephen Sikhosana.

This is the latest round in the multifaction battles that have plagued and crippled Nafcoc in the past decade.

At issue is how the shares and ownership of SVI were diluted by the directors without the approval of the 11 Nafcoc affiliates which were shareholders when the entity was formed in 2011.

Silver Vanity is wholly owned by the 11 affiliates and its biggest asset is estimated to be the R250 million stake it holds in Gallagher Estate, the sprawling conference venue in Midrand.

In a December 2011 resolution the directors of Silver Vanity handed 11.5% of the company to two new entities – Tizapro and Eriphase – which did not pay a cent for them.

However, documents indicate that the beneficiaries of those entities included seven of the same directors in Silver Vanity and their family trusts.

Gauteng police spokesperson Lungelo Dlamini confirmed on Friday that the case was opened and has been forwarded to the Specialised Commercial Crime Unit for investigation and that no one has been arrested.

City Press understands the case was opened by Nkosana Thobela, who is a trustee of Nafcoc Gauteng, which is part of the 11 affiliates owning a stake in Silver Vanity. Thobela has apparently received threats since opening the case.

Contacted on Thursday for comment on the case he reported to the police, Thobela responded via text that: “I don’t know who or what led you to me regarding what you mention above. I have no knowledge of what you are talking about. I am only a mere trustee of the Gauteng Investment Trust, which happens to be a 7.5% shareholder of Silver Vanity.

“The chairperson of Silver Vanity is Mr Letsoela. I believe that he’s the one who can assist you regarding Silver Vanity issues. Otherwise, I have nothing further to say, except to wish you well in what you are looking for. As much as I understand that you are doing your job, I would truly appreciate that no further enquiries about this be directed to me.”

The police investigation follows a complaint which Sabelo Macingwane – who was elected president in November last year – laid with the Companies and Intellectual Property Commission (CIPC).

In his complaint Macingwane charged that: “The theft, fraud and maladministration involve the dilution of shares of the trusts named above, who are the original shareholders of SVI, wherein such shares were transferred to Tizapro and Eriphase without the necessary legal processes involved in the sale and transfer of shares.

"In relation to these transactions, there is no evidence of any offer to purchase the shares or any indication of the trusts agreeing to the dilution of their shareholding nor any consideration paid for the transfer of the shares.”

He urged the CIPC to investigate the matter.

“There is evidence that these directors and trustees have abused their positions of trust and responsibility in these trusts and companies; took personal advantage of information or opportunity; intentionally, or by gross negligence, inflicted harm upon the shareholders and beneficiaries of the company (SVI) and the trusts; acted in a manner that amounts to gross negligence, wilful misconduct or breach of trust in relation to the performance of their functions within their duties to these companies and trusts.”

His complaint was backed by an explosive affidavit by former Nafcoc general secretary Phaladi, who is also a director of Silver Vanity, in which she states that she supports an investigation into seven Silver Vanity directors involved in the Tizapro and Eriphase.

“I confirm that the trust to which I am the trustee did not agree to a sale of the shares in the company (Silver Vanity) or dilution of its shareholding or waive its pre-emptive rights in terms section 39 (2) of the Companies Act 71 of 2008 nor did it authorise the director of Silver Vanity to issue shares to Tizapro and/or Eriphase,” it reads.

Tizapro and Eriphase are beneficially owned by the seven directors. The seven, Mosena, Mrasi, Sikhosana, Letsoela, Mavundla, Masekwameng and Thandazile Khumalo are also directors in the two companies with only Mosena the common director among them.

The CIPC did not undertake the complaint and instead advised Macingwane to open a criminal case with the police.

A confidential shareholder agreement, seemingly signed by all the Silver Vanity directors in December 2011, shows that Tizapro and Eriphase were given shareholding of 8.75% and 2.75%, respectively, in Silver Vanity at no cost.

Tizapro’s directors are Mavundla, Mosena, Sikhosana, Mrasi and Letsoela. Eriphase is described as being made up of youth, retail women trusts and entities, Nafcoc Security and Cleaning and SA Mining and Energy Chamber.

Mosena is listed on the Nafcoc website as Samec president and Khumalo as president of Nafsec, and both are affiliates of Nafcoc.

The shareholders of Silver Vanity are Nafcoc Investment Trust, Nafcoc Investment Trust, NIC investment Trust, National African Farmers’ Union of SA, Nafcoc Western Cape Investment Trust, Nafcoc Eastern Cape Investment Trust, Nafcoc Gauteng Investment Trust, Nafcoc Limpopo Investment Trust, African Council of Hawkers and Informal Businesses, SA Leisure Tourism and Hospitality Association and the National African Federated Transport Organisation Investment Trust.

According to a shareholder agreement of Tizapro, six other entities including two trusts are its shareholders.

The five shareholders, who each hold 18% in Tizapro, are Ediflash, Letsoela Family Trust, Baleya Family Trust, Zidla-Ekhaya and Uzwano Investment. Letsoela Family Trust belongs to Letsoela and Baleya belongs to Mosena.

Ediflash and Zidla-Ekhaya cited Nafcoc’s head office in Rivonia as the address of their business and the latter, Zidla-Ekhaya’s sole director is Mrasi.

Ndendela said he knew of the criminal case and said the creation of Tizapro and Eriphase and the intention was noble.

“It was for a good cause because I was meant to house those structures which were not part of the company yet but what happened to those intentions I don’t know,” he said.

Ella Modise pleaded ignorance to both the case and a decision to dilute shares and introduce new companies as shareholders. She referred all further enquiries to Mosena.

Mrasi and Ramodike also referred questions to Mosena.

No responses were received from the rest of the directors except Matlala, who said he could not respond due to personal circumstances.

A few hours before the set deadline for the responses to all the individual directors, a text message was circulated to all of them advising them not to respond and refer all enquiries to Mosena.

Mosena invited City Press to his office, but the offer could not be taken up and he was in turn offered to come to the City Press office for the meeting, an invite he did not respond to. Several follow-up phone calls and text messages to him were not responded to.

Responding to questions on the matter, Macingwane confirmed he knew of the matter.

“As stated in my inauguration speech and subsequent communication to the media, my biggest and most urgent priority is the sale of Silver Vanity as per an old-standing resolution of the national council of Nafcoc.

“The speed with which the directors of Silver Vanity, which I am not one, have moved on this matter has been disappointing despite the many promises by the directors to council that they will expedite the matter of the sale of the company.

“Upon discovering that there has been dilution of their Silver Vanity shares, some trustees have resorted to laying various charges with the police relating to the lack of authorisation of the sale of shares, the lack of consultation and the absence of any remuneration for the said shares that changed hands.

“Nafcoc finances are in a healthy state and qualifying structures receive their monthly tranches/dividends through their trusts for their operations,” Macingwane said.


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