The South African Rand
Durban - A business owner is drowning in debt because of the KZN Growth Fund Trust’s alleged failure to release funds despite approval of funding for his multi-million rand business .
He says the company was approved for funding within the last six months, after having met all the requirements, but has only received a portion (about 20 percent) of the promised funding.
The process of paying out to the business has been marred by delays, which the business owner believes, are tactics to get a bribe.
He said he had been made promises, with dates given, for when payment would be made and till this day it has not.
The Daily News has a recording of the acting CEO and one of his risk officers making such promises to the business owner.
The KZNGF said that at no stage from approval of funding to payment of the funding do board members directly contact applicant business owners. However, one of their board members is alleged to have done this twice before.
It's alleged that in one of these conversations, he tells the business owner that he was aware that they were signing paperwork. This was after being approved for the funding.
“One of their employees who worked on one of the processes of my application said to me: You know they are not going to pay you because they do not believe that from a multi-million rands deal they're not going to get a single cent, this is not the culture here. The culture here is that they must eat on every deal".
The frustrated business owner said he has had to source money from financial institutions to keep the project moving to the tune of over two million.
"They (KZNGFT) are choking the project, a process that should have taken three months has dragged on for more than two years''.
The business owner reached out to the Department of Economic Development and Tourism, which as part of the government is a beneficiary of the Trust, only to be told the MEC only acted as a representative of the provincial government. He couldn’t intervene in issues of payment.
"The Trustees and the Investment Committee decide on all investments, the Trustees are therefore responsible for the day-to-day business operations of the Trust, and for approving criteria that the Investment Committee applies in deciding whether to make or exit an investment. Any complaint received by the department is referred to the KZNGFT for attention and response," said department spokesperson Bheki Mbanjwa.
He said the department was awaiting a final report into the irregular functioning of the Trust that was commissioned after it received a letter from staff unhappy with issues of nepotism, ill-qualified senior execs’ experience and qualifications.
"The findings and recommendations of the report will upon receipt be processed and in due course made public through the relevant KZN legislature portfolio committee," he said.
KZNGFT CEO Lwazi Zondi said that in the last six months the trust had approved three companies for funding, and all three had received their funding.
"When funding is approved, it’s normally attached with Condition Precedents. Disbursement depends on the business fulfilling the Condition Precedents. The longer it takes for the business to fulfil these the longer disbursement will take," he said.
Zondi said after approval, it normally took one or two weeks before funds were released depending on whether all requirements were met.
He said he was not aware of any allegations that there was a culture of bribery at the trust without any further comment.
Daily News
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