The East London Industrial Development Zone (ELIDZ) has lost its rental agreement with a key former tenant, Matla Diamond, vanishing without paying rent of at least R2-million.
The diamond beneficiation company, which was linked to the late businessman Zwelakhe Sisulu, could even owe the ELIDZ up to R3.5-million, a Dispatch investigation has found.
The diamond polishing plant was opened at the zone amid much fanfare as it was the first of its kind in the province. At the time, the IDZ projected the company would create more than 1200 jobs and that Matla had brought the total investment value in the IDZ to R1.2-billion. The plant was opened at the zone in 2010.
Matla Diamond, owned by a Chinese national with Sisulu as its South Africa group executive, went bust and closed its plant in 2013.
Sources say in 2014 the ELIDZ tried hard to recoup their money but got nothing.
According to insider sources who asked not to be named, the IDZ cannot find the lease agreements and this prevents it from moving forward in claiming what is owed.
“There are no records of the company within the ELIDZ and they are struggling to recoup millions of rands they are owed,” said one source.
“The money that is owed is in the region of between R2-million and R3.5-million and this is a huge amount as the IDZ is not making money and depends mostly on rentals from companies in the zone,” said the source.
This week the zone confirmed that it was owed money by Matla Diamond but would not divulge the figures.
ELIDZ spokesman Sakhiwo Tetyana said: “The ELIDZ can confirm that Matla Diamond is no longer a tenant. The company left the ELIDZ in 2013 owing to various supply chain-related challenges within Matla Diamond which impacted on their operations.
“Due to the legal proceedings under way initiated by the ELIDZ to recover monies owed to the ELIDZ by the company – we are not in a position to divulge any further information regarding this debtor,” Tetyana said.
Two years ago, Dispatch reported that R27-million was owed to the zone in unpaid rent. In their 2015-16 annual report, the zone reported that it had written off bad debts amounting to R277000.
Matla Diamond apparently invested more than R100-million in the project.
Initially, it was projected that the company would create 120 skilled job opportunities and 500 more in the following years. Chinese nationals were recruited to work in the zone in order to transfer their skills to locals.
Matla Group chief executive officer Chia-Chao Wu said at the time that the plant had been developed to produce 20000 carats a month when working at optimum capacity.
It was said that once the diamonds were sold, the project was expected to generate revenue of R100-million a month.
Dispatch attempts to track down Matla Diamond drew a blank as their offices in South Africa are closed. — bonganif@dispatch.co.za
ELIDZ owed R2m by tenant defaulter
The diamond beneficiation company, which was linked to the late businessman Zwelakhe Sisulu, could even owe the ELIDZ up to R3.5-million, a Dispatch investigation has found.
The diamond polishing plant was opened at the zone amid much fanfare as it was the first of its kind in the province. At the time, the IDZ projected the company would create more than 1200 jobs and that Matla had brought the total investment value in the IDZ to R1.2-billion. The plant was opened at the zone in 2010.
Matla Diamond, owned by a Chinese national with Sisulu as its South Africa group executive, went bust and closed its plant in 2013.
Sources say in 2014 the ELIDZ tried hard to recoup their money but got nothing.
According to insider sources who asked not to be named, the IDZ cannot find the lease agreements and this prevents it from moving forward in claiming what is owed.
“There are no records of the company within the ELIDZ and they are struggling to recoup millions of rands they are owed,” said one source.
“The money that is owed is in the region of between R2-million and R3.5-million and this is a huge amount as the IDZ is not making money and depends mostly on rentals from companies in the zone,” said the source.
This week the zone confirmed that it was owed money by Matla Diamond but would not divulge the figures.
ELIDZ spokesman Sakhiwo Tetyana said: “The ELIDZ can confirm that Matla Diamond is no longer a tenant. The company left the ELIDZ in 2013 owing to various supply chain-related challenges within Matla Diamond which impacted on their operations.
“Due to the legal proceedings under way initiated by the ELIDZ to recover monies owed to the ELIDZ by the company – we are not in a position to divulge any further information regarding this debtor,” Tetyana said.
Two years ago, Dispatch reported that R27-million was owed to the zone in unpaid rent. In their 2015-16 annual report, the zone reported that it had written off bad debts amounting to R277000.
Matla Diamond apparently invested more than R100-million in the project.
Initially, it was projected that the company would create 120 skilled job opportunities and 500 more in the following years. Chinese nationals were recruited to work in the zone in order to transfer their skills to locals.
Matla Group chief executive officer Chia-Chao Wu said at the time that the plant had been developed to produce 20000 carats a month when working at optimum capacity.
It was said that once the diamonds were sold, the project was expected to generate revenue of R100-million a month.
Dispatch attempts to track down Matla Diamond drew a blank as their offices in South Africa are closed. — bonganif@dispatch.co.za
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos