The statement below is the unedited version of a letter by Africorp defending themselves against the Kabuso report and various media instances:
The media, and in particular “THE HERALD”, has for some time now published various articles suggesting that Africorp companies are in some undefined manner guilty of various transgressions and improper conduct in relation to three matters:
- The leases of office accommodation to the Nelson Mandela Bay Municipality (NMBM) at Kwantu Towers Building.
- Large amounts of money owing to the NMBM for non payment of municipal service charges.
- Some form of irregularity around the Automatic Meter Reading contract concluded between the NMBM and Unique Mbane SA.
These media reports rely on information obtained from unnamed officials of the NMBM and are based on lies and misrepresentations by individuals attempting to settle political scores and gain political advantage.
The main source of information pertains to the so called “KABUSO FORENSIC REPORT“. We have not been given a copy of this report to date to enable us to respond to any comments contained therein and have only recently been made aware of the existence of this report on the internet which we have now perused.
This report indicates clearly that it is based on nothing other than information established from unnamed documentation, information from unnamed officials, newspaper articles, and that KABUSO will not accept any responsibility should the report be disclosed or released to any other party.
The authors of the KABUSO REPORT indicate that the document serves only as a discussion document. In the event of any legal challenge, the document may only be used as background information. The report clearly states that the forensic investigation DID NOT CONSTITUTE AN AUDIT in terms of the Generally Accepted Government Auditing Standards.
We have never been contacted by the authors of this report to provide a response to any of the allegations and/or comments contained in the report.
Based on the above, IT IS DIFFICULT TO UNDERSTAND HOW THIS DOCUMENT CAN BE DEFINED AS A FORENSIC REPORT.
Africorp would now like to provide a brief response on each of the items mentioned with the pertinent facts.
THE LEASES OF OFFICE ACCOMODATION TO THE NMBM AT KWANTU TOWERS BUILDING:
- The NMBM leases some office space from Africorp International Properties at KWANTU TOWERS. These leases were all concluded and signed after a full and thorough competitive tender process. The leases signed are fully in accordance with the law and should the NMBM attempt to break these contracts in any way, then Africorp reserves all of its legal rights in this regard.
- Where any lease has come to an end, as stipulated in the lease agreement, then the NMBM is at liberty to end the lease in accordance with the termination clause of the lease agreement.
- It must however be pointed out that the lease at the Kwantu Towers building to the NMBM was concluded at a relatively competitive rate, in comparison to other current premises occupied by the NMBM where the rental is much higher.
LARGE AMOUNTS OF MONEY OWING TO NMBM:
- The NMBM, some 2 years or so ago, instituted legal action against Africorp in respect of amounts owed for 265 accounts.
- Africorp had prior to the legal action attempted on numerous occasions to discuss this matter with the NMBM because we did not agree with the amounts owed or the accounts in question.
- On the day of the court hearing the NMBM withdrew the matter thereby constituting fruitless and wasteful expenditure of ratepayer’s money and offered to settle the matter amicably with Africorp through interaction with the accounting teams of both parties.
- The first meeting revealed that Africorp only had approximately 160 accounts with the NMBM and not the 260 or so initially charged with.
- Of these 160 accounts, the charges of large number of accounts were found to be wrong and had to be corrected.
- The NMBM had charged interest and legal fees in advance on all 265 accounts or so, even though these accounts did not belong to Africorp.
- Currently some 95% of Africorp accounts with the NMBM are in advance, some by as much as 12 months in advance.
- The amounts pertaining to the remaining 5% or so was withheld on the basis of a mutually agreed arrangement to offset the amount owed by Africorp to the NMBM with the amount owed by the NMBM to Africorp.
- When the amounts owed by Africorp to the NMBM are deducted from the amounts owed by the NMBM to Africorp, then the Africorp account status with the NMBM is current.
- Any attempt by the NMBM to impugn the name of Africorp or that of its directors will be vigorously defended and all of our rights in this regard are reserved.
- From the perspective of Africorp this incorrect account situation is normal practice for the NMBM with thousands of consumers complaining on a daily basis of incorrect and/or non existent accounts.
THE AUTOMATED METER READING CONTRACT:
- The municipality published a tender in 2007 for a meter reading system.
- 9 companies responded, and the tender of Unique Mbane SA was judged by the officials of the municipality themselves, to be the most responsive in terms of both technical and financial reasoning.
- The municipality then advised Unique Mbane SA that a binding contract existed between the parties.
- During 2008 – 2010 the project was stopped on the basis that some form of irregular actions had occurred and the matter was reported to the special investigations unit (SIU). After some 1 year or so the SIU found that there was nothing irregular in the award of the contract.
- The NMBM then reported the matter to its investigative legal team who also found nothing irregular in the award of the contract.
- Unique Mbane then threatened legal action against the municipality.
- In response the municipality confirmed that a legally binding contract existed between the NMBM and Unique Mbane SA and that the municipality would honour this contract.
- Accordingly after a lengthy delay the municipality signed a service level agreement with Unique Mbane SA for the contract as per the tender.
- Upon the release of this KABUSO report, the Executive Mayor of the NMBM again ordered that all projects mentioned in the Kabuso Report should be stopped.
- Unique Mbane SA is of the opinion that a legally valid and binding contract for the supply of an Automatic meter Reading System exists between the NMBM and Unique Mbane. Any attempt by the NMBM to repudiate this contract will be vigorously opposed and all our rights in this regard are reserved.
These are the facts regarding the above matters and the public is invited to ask the relevant questions in this regard.
Public officials are given the mandate of implementing service delivery and not engaging in illegal and unlawful conduct aimed at impugning the names and integrity of businesses and business people in order to score cheap political points aimed at furthering their own personal interests.
Politicians are given the mandate by the electorate to ensure the development of service delivery projects aimed at improving the lives of all the citizens of the municipality and not to engage in factional witch hunts amongst each THAT UNDERMINES THE DELIVERY OF MUCH NEEDED SERVICES TO OUR COMMUNITIES.
The Africorp group of companies provides employment to a large number of people through-out the jurisdiction of the NMBM and beyond. Additionally, the company has a huge social responsibility programme particularly aimed at alleviating the poverty plight of the most vulnerable members of our communities.
It is our hope that through the detailed FACTS herein, the public will now be in a position to develop an informed opinion regarding the true nature of all of these matters.
Alan Straton
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