A prominent businessman with strong political links has apparently had his debt of nearly R4-million written off by the Eastern Cape Development Corporation (ECDC).
He was among more than 300 individuals and businesses who reportedly benefited from a 2012 write-off totalling R118-million.
The details are in a submission to the ECDC board that comes on the heels of the corporation’s vow to appoint an external auditor to probe a debt of R125000 allegedly owed by acting chief executive Reggie Naidoo.
The debt dates back to 2003 and was reportedly also written off in 2012. Naidoo, in a memo to staff members, denied owing any money to the ECDC. In the same memo he attributes the debt, which still shows on the corporation's system, to a technical glitch.
Today the Dispatch can report that according to ECDC documents, businessman Mike Stofile received a R1.3-million loan in 2004. Last week he denied ever receiving this money. At the time of the loan his brother Makhenkesi was premier of this province.
The reasons given in the submission for writing off debt against Stofile’s Wildbreak 300 (trading as Spar Alice) was that legal processes had been exhausted with R500 000 recovered. Executive management approved that R3.9-million including interest and fees be written off.
Stofile said that all he ever received from the ECDC was a form of security.
“As far as I am concerned, I don’t owe ECDC a cent. I wanted R1.3-million from ECDC but they only gave me a letter of guarantee for R900000 to back me. I used that guarantee to get finance from FNB and I paid back every cent within five years,” Stofile said.
Stofile blamed his woes on the Pillay Commission, which he said falsely accused his brother Makhenkesi of being a “money tree” for friends and family members.
“I paid up within the five-year term FNB gave me. It was the Pillay Commission which initially said ‘Mike got money from government’ but that is not true,” he said.
The R10-million Pillay Commission’s findings implicated Makhenkesi and current Deputy Finance Minister Mcebisi Jonas, who was ECDC CEO at the time, in an “orchestrated siphoning off” of nearly R200-million of the ECDC’s funds.
However, the Pillay report was set aside in the Grahamstown High Court by Judge Daylan Chetty in 2009. The Eastern Cape government did not pursue an appeal.
ECDC confirmed the R118-million write-off, saying it was disclosed in its annual report for 2012.
ECDC spokeswoman Nopasika Mxunyelwa said they would not comment on individual cases. "The total amount written off was disclosed in our annual audited financial statements. ECDC continues legal efforts to retrieve money owed by individuals who are now able to pay as their financial positions have changed.”
Mxunyelwa added: “The ECDC board is considering the internal report on matters relating to the allegedly ‘unpaid ECDC loan’ by . The Board has requested that an external auditor be appointed to verify the findings contained in the report.” — siyam@dispatch.co.za
300 borrowers benefit from R118m ECDC loan write-off
He was among more than 300 individuals and businesses who reportedly benefited from a 2012 write-off totalling R118-million.
The details are in a submission to the ECDC board that comes on the heels of the corporation’s vow to appoint an external auditor to probe a debt of R125000 allegedly owed by acting chief executive Reggie Naidoo.
The debt dates back to 2003 and was reportedly also written off in 2012. Naidoo, in a memo to staff members, denied owing any money to the ECDC. In the same memo he attributes the debt, which still shows on the corporation's system, to a technical glitch.
Today the Dispatch can report that according to ECDC documents, businessman Mike Stofile received a R1.3-million loan in 2004. Last week he denied ever receiving this money. At the time of the loan his brother Makhenkesi was premier of this province.
The reasons given in the submission for writing off debt against Stofile’s Wildbreak 300 (trading as Spar Alice) was that legal processes had been exhausted with R500 000 recovered. Executive management approved that R3.9-million including interest and fees be written off.
Stofile said that all he ever received from the ECDC was a form of security.
“As far as I am concerned, I don’t owe ECDC a cent. I wanted R1.3-million from ECDC but they only gave me a letter of guarantee for R900000 to back me. I used that guarantee to get finance from FNB and I paid back every cent within five years,” Stofile said.
Stofile blamed his woes on the Pillay Commission, which he said falsely accused his brother Makhenkesi of being a “money tree” for friends and family members.
“I paid up within the five-year term FNB gave me. It was the Pillay Commission which initially said ‘Mike got money from government’ but that is not true,” he said.
The R10-million Pillay Commission’s findings implicated Makhenkesi and current Deputy Finance Minister Mcebisi Jonas, who was ECDC CEO at the time, in an “orchestrated siphoning off” of nearly R200-million of the ECDC’s funds.
However, the Pillay report was set aside in the Grahamstown High Court by Judge Daylan Chetty in 2009. The Eastern Cape government did not pursue an appeal.
ECDC confirmed the R118-million write-off, saying it was disclosed in its annual report for 2012.
ECDC spokeswoman Nopasika Mxunyelwa said they would not comment on individual cases. "The total amount written off was disclosed in our annual audited financial statements. ECDC continues legal efforts to retrieve money owed by individuals who are now able to pay as their financial positions have changed.”
Mxunyelwa added: “The ECDC board is considering the internal report on matters relating to the allegedly ‘unpaid ECDC loan’ by . The Board has requested that an external auditor be appointed to verify the findings contained in the report.” — siyam@dispatch.co.za
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