Kapital Mindz, Unilever head for showdown

Johannesburg - Public relations firm Kapital Mindz, headed by Vuyo Mkhize, on Sunday confirmed it is being sued by former client Unilever for R4.6m, and that it is counter-suing for R7.6m.

"This legal tussle arises out of a set of agreements that Kapital Mindz entered into with Unilever in 2007 to manage the latter's marketing campaign for its Axe deodorant," the company said in a statement.

The statement followed media reports on the issue published in Sunday newspapers.

As part of this campaign, Unilever offered 100 partygoers the opportunity to fly to Ibiza, Spain, on board a chartered plane dubbed the AxeJet, in August 2007.

But the campaign flopped when the AxeJet did not arrive at OR Tambo International Airport, leaving the guests stranded, according to the Sunday Tribune.

In court papers, Unilever claimed the owner of the jet had withdrawn the aircraft as it had not received payment, although Unilever had paid Kapital Mindz to charter the craft, the newspaper reported.

Kapital Mindz denied this, saying that Unilever had paid the firm R4.3m, but this related to other expenses which did not include the hire of the aircraft.

"The amounts that were to be paid to charter either of the two AxeJet options that were under consideration at the time was $670 000.00 and $590 526.31 respectively (at the then prevailing exchange rate of R7.60 to the US dollar)," the company said.

"Unilever did not pay either of these amounts to Kapital Mindz, as agreed, with the result that Kapital Mindz was not able to pay the operators of either of the AxeJets."

Guests were eventually accommodated on scheduled commercial flights to Ibiza.

Both Unilever and Kapital Mindz claim credit for this contingency plan.

Kapital Mindz also denies Unilever's claim that the company be held liable for the cost of this contingency plan or the costs of all the other project elements for which payment was still outstanding.

All of these expenses, including the contingency plan, total R4.6m, said Kapital Mindz.

"Soon after the return of the Ibiza group, Kapital Mindz met with senior Unilever executives and presented them with a full project report, including a detailed account of how Kapital Mindz had appropriated the approximately R4.3m that Unilever had paid towards the project up to that point," it said.

Included in the account were the details of several outstanding third-party liabilities, totalling R3.1m, which Kapital Mindz incurred on behalf of Unilever, it said.

These outstanding payments form part of the R7.6m Kapital Mindz is claiming from Unilever.

The trial is scheduled to begin on November 29 in the Durban High Court.

Kapital Mindz said it was "only too happy" that it would be afforded an opportunity to detail its version of events.