Oh the timing. It's holiday season and many people are going to be travelling between JHB and Durban, Cape Town, Tzaneen etc. In each case there are going to be toll fees and queues and roadworks and irritation and much cussing of SANRAL because they are planning to whack us another R500/month just to go to work and back on the highway. And then the DTI decide to overburden the average South African company with their new draft BEE bill which now criminalises fronting.
Back to the timing. The front page of today's Sunday Times carried the headline (competing with Malema's shower song parody) - Toll company in trouble over BEE fronting. The story tells about TOLPLAN this is subcontractor to SANRAL that is now embroiled in a legal wrangle where a shareholder is alleging that TOLPLAN denied the shareholder basic shareholder rights and effectively used his blackness on their letterhead to bolster their (alleged) black shareholding. I had blogged on this a few weeks ago – admittedly my so-called hypothetical post was based on fact because I was asked to advise the shareholder in this matter.
The damage is now done, TOLPLAN is not going to come out of this with much grace at all and frankly their CEO's utterances are probably going to incriminate them even further.
(Willie) Pienaar admitted using Matshaya's name when he was no longer a shareholder. He told the Sunday Times that "we kept his name on the letterhead because [Matshaya] is very status-conscious". "We did play with the idea of removing him but we thought it might be construed as a negative statement."
This is a PR disaster. In the space of a short paragraph Pienaar corroborates the notion of fronting – it's almost like he is an accidental victim in Matshaya's dastardly plan to allege fronting. And if this is not enough, his bona fides are now open to question
He said he concluded the empowerment deals partly because it was vital to score government work. "Sanral made it clear that any proposal would only be accepted if those things were included."
The sad thing about this sentence is that he is completely correct. Very few companies would consider extending their shareholding if they didn't have to; but this is not the message that the DTI wants to hear.
Still Pienaar claims there is no fronting. He's got a long road ahead of him. This article is going to raise the ire of so many parties. A short list follows
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SANRAL – do they really need this shit? Their Gauteng tolling scheme is going to affect almost every person living within Gauteng or who might travel through Gauteng. Anything that is transported to and from Gauteng is going to feel the impact of the tolls – the article suggests that the bread price could rise by 12c a loaf as a result. I think I might be incorrect in my assessment – everyone living in Gauteng and almost everyone living with a 500km radius of Gauteng is going to feel the impact of this tolling system.
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The DA – I would be very surprised if they did not request the public protector to review the entire tender process.
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COSATU – they question everything. I'm surprised that they haven't asked for an annulment on the British Royal wedding because they weren't actively consulted on the suitability of the two parties.
The question now is – what on earth does TOLPLAN do to save their reputation with SANRAL and the business community at large.
I don't know – I think it might be too late.
The Sunday Times article reads 'he-says she-says'. Is this even news-worthy or in the public interest? (the BEE speculation, not the piggyback tollroad story)? Beware the slow news week.
Posted by: David Isaacs | December 19, 2011 at 10:23 AM
Pienaar does stipulate SANRAL's BEE requirements in the article, which he claims were complied with, without the help of Matshaya. If SANRAL corroborates this (which the Sunday Times states was impossible due to the season), Matshaya's claim crumbles. Whether the Sunday Times will then assist Tolplan to repair its public image, after the damage the article did, remains to be seen.
Posted by: P Mantashe | December 20, 2011 at 03:39 PM
Thank you - very valid point. The allegation of fronting carries a lot more PR weight than proving the act. I agree with you
Posted by: Paul Janisch | December 20, 2011 at 06:26 PM