Allegations of ‘irregularities’ mar empowerment deal
- Tuesday 2 March 2004
The R120 to R200m (US $18-30m) deal was reported to have hit a snag amid accusations of improper use of funds and what the South African Sunday Times termed ‘irregularities’.
SAWIT is brokering the deal to purchase a 25.1% black empowerment stake in KWV, the vast former national cooperative in Paarl that was privatised in 1997.
The newspaper alleged that the SAWIT chairman Gavin Pieterse was paid a monthly stipend of R20,000 (US $3,000) and that he paid his wife’s communications consultancy company, 3D Global Communications, R500,000 (over $75,000) to organise the black empowerment conference held last October.
3D Global Communications is listed as a client of SAWIT and Pieterse would not confirm the exact figure of his stipend. He denies any claims of impropriety, saying the accusations were ‘devoid of any shred of truth.’
Earlier Pieterse told decanter.com it would be ‘grossly improper’ for him to personally have an interest in KWV.
Pieterse and Abbey Makoe, spokesperson for the government Department Of Land Affairs, met recently to prepare an official response to the recent accusations although a statement has yet to be released.
One accusation that has not gone away is that of SAWIT benefiting a few black businessmen in South Africa while not substantially helping the cause of black empowerment for the masses.
Tony Ehrenrich, Western Cape secretary for COSATU, the Congress of South African Trade Unions, told South African online newspaper Business Report that the deal between KWV and SAWIT was ‘meant to make a few black people rich at the expense of the majority.’ He demands a government investigation.
‘This is a case of sour grapes … Anyone who has a problem with the trust is free to go into its records,’ said Pieterse.
Danie de Wet, KWV’s chairman, says the deal is still on and refutes the allegations that empowerment is not happening for a wider spectrum of the population.
‘In our view, this [deal] constitutes real broad-based economic empowerment,’ he said.