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Johannesburg - National Federated Chamber of Commerce and Industry (Nafcoc) president Lawrence Mavundla used part of a R720 000 loan for an ancestral feast at the expense of workers’ wages.
Dan Mbuli, a spokesperson for one Nafcoc faction, said the feast at Mavundla’s home in Richards Bay in 2009 had resulted in the organisation having a cash-flow crisis and failing to pay its workers’ salaries in the second half of last year.
City Press is in possession of documents signed by Mavundla that show the items on which the money was spent.
The documents show that R67 200 was spent on catering at the “Richards Bay Celebrations”, R40 800 to hire a venue and R12 000 on invitations and stationery for the event.
“I, the undersigned Lawrence Bhekinkosi Mavundla, hereby acknowledge that I am indebted to Nafcoc Investment Trust in (sic) the sum of R720 000 being the outstanding balance of a loan to me by the creditor,” writes Mavundla.
In the note he promises to pay back the debt from the money he expects to receive in exchange for his shares in a Nafhold-owned company.
“I will repay the amount in full on realising funds from a special allocation of shares in Lexpub 56 Investments Limited, an unlisted public company, such allocation to be made in September 2010,” he writes.
This week Mavundla confirmed to City Press that he was indebted to Nafcoc. Mbuli said Mavundla had not settled the debt.
The revelations are part of an ongoing and bruising battle for leadership of the organisation.
Mavundla faces a challenge from a Nafcoc faction that wants him replaced by mining magnate Tim Tebeila.
Mavundla’s spokesperson, Vukile Mathabela, confirmed the debt but questioned the timing of the revelations.
“We don’t deny the existence of the documents but we question why are they released now, especially after they were signed last year,” said Mathabela.
Mathabela said Mavundla signed the documents in order to secure funds from Nafhold for a conference that was held in KwaZulu-Natal late last year.
“The agreement to sign the documents was reached between Mavundla and Nafhold chief executive Michael Leaf in order for Nafcoc to get the funds,” he said.
Mathabela declined to comment on staff salaries.
“We acknowledge that Nafcoc has financial challenges but we do not want to talk about something that relates to employer and employee relations,” he said.
Mbuli said his faction was suspended and expelled from the organisation when it queried the R720 000 expenditure.
He warned that Mavundla must pay back the money or Nafcoc would recover it by pursuing his assets.
Meanwhile, City Press can reveal that Nafcoc staff have not received their last month’s wages.
News about the R720 000 expenditure and non-payment of staff comes after City Press last year wrote that financial mismanagement had resulted in Nafcoc staff receiving their salaries late in April, June and August.
The chamber’s 11 administrative staff subsequently had their salaries reduced by half.
Five senior staff were retrenched in January after they refused to take pay cuts.
A Nafcoc insider, who declined to be identified, said the small business chamber had recently got a R750 000 loan from casino and hotel group Hosken Consolidated Investments [JSE:HCI] (HCI).
Nafcoc owns preference shares worth R500m in HCI and is acquiring Gallagher Convention Centre from HCI in exchange for the shares.
This is another source of division in the organisation, with the faction opposed to Mavundla arguing that Gallagher is worth R110m less than its going price.
A Nafcoc insider told City Press that the HCI loan was used to settle legal fees arising from the many court battles the organisation has had to fight in recent months.
Nafcoc has been involved in court battles against members of the chamber’s faction and its financial arm, Nafhold.
Mathabela also declined to comment on the loan.
As a faction tries to oust him, it has been revealed that Nafcoc president Lawrence Mavundla’s use of the chamber’s money on an ancestral feast may have resulted in its failure to pay staff
- City Press
For more business news, go to www.citypress.co.za/Business.
Dan Mbuli, a spokesperson for one Nafcoc faction, said the feast at Mavundla’s home in Richards Bay in 2009 had resulted in the organisation having a cash-flow crisis and failing to pay its workers’ salaries in the second half of last year.
City Press is in possession of documents signed by Mavundla that show the items on which the money was spent.
The documents show that R67 200 was spent on catering at the “Richards Bay Celebrations”, R40 800 to hire a venue and R12 000 on invitations and stationery for the event.
“I, the undersigned Lawrence Bhekinkosi Mavundla, hereby acknowledge that I am indebted to Nafcoc Investment Trust in (sic) the sum of R720 000 being the outstanding balance of a loan to me by the creditor,” writes Mavundla.
In the note he promises to pay back the debt from the money he expects to receive in exchange for his shares in a Nafhold-owned company.
“I will repay the amount in full on realising funds from a special allocation of shares in Lexpub 56 Investments Limited, an unlisted public company, such allocation to be made in September 2010,” he writes.
This week Mavundla confirmed to City Press that he was indebted to Nafcoc. Mbuli said Mavundla had not settled the debt.
The revelations are part of an ongoing and bruising battle for leadership of the organisation.
Mavundla faces a challenge from a Nafcoc faction that wants him replaced by mining magnate Tim Tebeila.
Mavundla’s spokesperson, Vukile Mathabela, confirmed the debt but questioned the timing of the revelations.
“We don’t deny the existence of the documents but we question why are they released now, especially after they were signed last year,” said Mathabela.
Mathabela said Mavundla signed the documents in order to secure funds from Nafhold for a conference that was held in KwaZulu-Natal late last year.
“The agreement to sign the documents was reached between Mavundla and Nafhold chief executive Michael Leaf in order for Nafcoc to get the funds,” he said.
Mathabela declined to comment on staff salaries.
“We acknowledge that Nafcoc has financial challenges but we do not want to talk about something that relates to employer and employee relations,” he said.
Mbuli said his faction was suspended and expelled from the organisation when it queried the R720 000 expenditure.
He warned that Mavundla must pay back the money or Nafcoc would recover it by pursuing his assets.
Meanwhile, City Press can reveal that Nafcoc staff have not received their last month’s wages.
News about the R720 000 expenditure and non-payment of staff comes after City Press last year wrote that financial mismanagement had resulted in Nafcoc staff receiving their salaries late in April, June and August.
The chamber’s 11 administrative staff subsequently had their salaries reduced by half.
Five senior staff were retrenched in January after they refused to take pay cuts.
A Nafcoc insider, who declined to be identified, said the small business chamber had recently got a R750 000 loan from casino and hotel group Hosken Consolidated Investments [JSE:HCI] (HCI).
Nafcoc owns preference shares worth R500m in HCI and is acquiring Gallagher Convention Centre from HCI in exchange for the shares.
This is another source of division in the organisation, with the faction opposed to Mavundla arguing that Gallagher is worth R110m less than its going price.
A Nafcoc insider told City Press that the HCI loan was used to settle legal fees arising from the many court battles the organisation has had to fight in recent months.
Nafcoc has been involved in court battles against members of the chamber’s faction and its financial arm, Nafhold.
Mathabela also declined to comment on the loan.
As a faction tries to oust him, it has been revealed that Nafcoc president Lawrence Mavundla’s use of the chamber’s money on an ancestral feast may have resulted in its failure to pay staff
- City Press
For more business news, go to www.citypress.co.za/Business.
