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‘Role model’ company fails to pay back the bank’s money and has had to close doors.
Hundreds of jobs are on the line in the Eastern Cape as a R1 billion electronics Smart Factory has closed its doors after being taken to court by Standard Bank.
Yekani Manufacturing – which now faces possible liquidation – has not opened its doors since last year.
The East London-based 100% black-owned company, launched with much fanfare in June 2018, was the hope of the province and hailed as a milestone towards the province’s fourth industrial revolution.
It is in the East London Special Economic Zone and created hundreds of jobs, with about 1 000 new jobs still on the cards.
But failure to make repayments on a R200 million loan from Standard Bank has led to the company’s potential liquidation.
When City Press visited the company’s premises last week there was no sign of the glamour that was there at the launch in 2018.
On Wednesday, the gates were locked with no sign of life inside the 28 000m² facility.
An employee told City Press that some of the equipment was moved out of the building before the end of last year.
“Most of the equipment at the factory has been removed and we don’t know what is happening as nobody is giving information to us employees.
“We are in the dark. All we know is that the company was being taken to court by Standard Bank.
“Some of the workers attended the court case in the East London High Court last week, hoping we would get some clarity as to what is happening.
“We have not been paid for months and we don’t know what our future holds. Most of us have started looking for jobs,” said the employee, who did not want to be named for fear of retribution.
The company’s CEO, Siphiwe Cele, confirmed last week that Yekani and Standard Bank appeared in the East London High Court on January 14, “when a judgment determining the future of Yekani was going to be handed down”.
However, the matter was postponed until February 18.
“This therefore means that the matter is now sub judice. Yekani is unable to comment on any rumours about this matter as it runs the risk of prejudicing or interfering with the pending court proceedings and the outcome,” said Cele.
The company was committed to doing everything in its power to protect and save the jobs of its employees, he said.
“It is imperative to note that the Eastern Cape provincial government is not responsible for the financial issues that Yekani is experiencing,” he said.
But Vuyisile Ntlabati, president of the Eastern Cape business chamber, said the provincial government should have done more to support the company.
He said even the smallest businesses would not thrive under the circumstances facing businesses in the Eastern Cape.
“That company [Yekani] is employing a lot of skilled people. Our government should have done more to support it.
“There is one thing that the government needs to do, if it wants to create a conducive environment for black business and industrial black business, it needs to support businesses.
“In the Eastern Cape we don’t have black industrialists.
“Yekani was the role model to many young people, giving them hope that they could run any business, no matter the size.
“It’s a pity this thing has happened and nothing was done to protect this business and save the jobs,” said Ntlabati.
Former trade and industry minister Rob Davies said at the June 2018 launch that the department had provided R350 million for the construction of the company’s infrastructure through the Special Economic Zones Fund, as well as a R50 million grant under the Black Industrialists Programme for the machinery.
At least 1 700 people were employed in the construction phase.
Cele said at the launch: “It is now up to the government to support Yekani and other such companies that are doing this. We didn’t start it because there was a tender. We have not done any tenders except for supplying Gauteng and KwaZulu-Natal with tablets. But we are heeding the call of our government. That is why Yekani is here today.”
In the East London plant Yekani manufactured Explora HD decoders for MultiChoice, TEAC television sets, set-top boxes, tablets and mobile handsets, among other devices.
Yusuf Cassim, the DA’s spokesperson on economic development in the province, said that what had happened to Yekani was an example of following failed economic policies.
“When you follow a failed approach to empower people, you are setting them up for failure. And we are saying you must be able to follow an approach where you are going to create more job multipliers and promote competitiveness and innovation so that you create job multipliers for our people in the province instead of killing them.”
In a joint statement on Saturday, the Eastern Cape Industrial Development Zone and the Eastern Cape Provincial Government said the Eastern Cape Provincial Government (ECPG) is aware of the problems faced by Yekani Manufacturing and has, since learning of these challenges, been engaging with the company to try and find solutions.
This is because, as a catalyst for economic development, part of the ELIDZ’s responsibility is to, in partnership with other development partners, assist in the rescue of distressed industries, whose closure would have a disastrous impact on the region’s industrialisation and job creation.
This is still work in progress.
The ECPG is still working hard to supports all efforts aimed at preserving the capabilities that were secured through the settlement of Yekani, including the option of the company undergoing a business rescue process.
We believe this will provide a proper assessment and diagnosis of the challenges faced by the company, the root cause and identify the support that the company needs to turn things around.
Ross Linstrom, spokesperson for Standard Bank said: “Standard Bank is not in a position to comment at this time. The bank is not in a position to discuss any client details with this parties, and advise that the company concerned should be contacted for comment.”
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