Durban - Prominent KwaZulu-Natal motorsport enthusiast and luxury car dealer Shaun Duminy has launched a high court application to sequestrate the estate of bus company boss Mandla Gcaba who, he says, owes him R14.5 million.
Gcaba has said he will oppose the application.
In addition, Duminy has issued an application to liquidate a further company controlled by Gcaba for the debt.
According to Duminy in the Durban High Court applications, Gcaba attempted to repay the debt with cheques issued by Tansnat Durban – his company which receives government subsidies from the provincial government to run Durban’s bus service – but the deal fell apart when the cheques started to bounce.
Vuyo Mkhize, public relations adviser to Tansnat Durban, said Mandla Gcaba and Amandla Emicabango Investments had filed their intention to oppose the two applications SMD Group had brought against them, on August 31. He said SMD Group had subsequently initiated settlement negotiations with both Gcaba and Amandla Emicabango, which were ongoing.
Mkhize said: “At the conclusion of these negotiations, the parties will release a joint statement which will address the issue of the various references to Tansnat Durban, which is not a party to this dispute, that are contained in the founding affidavit that was filed in support of the two applications by SMD Group.”
Gcaba’s financial affairs are under scrutiny in another application brought by the eThekwini Municipality to liquidate Tansnat because, it alleges, he owes it R40 million and has been using its coffers as his personal bank account. The city wants to take back the bus service which, so far this year, has been disrupted three times because of staff strikes and non- availability of diesel.
Gcaba is opposing the application and it has not yet been set down for argument.
But in the meantime, Duminy has launched an application to sequestrate Gcaba.
The Mercury understands that Duminy and Gcaba are “business friends” and Gcaba has bought several vehicles from Duminy’s Ballito-based SMD Trading. Over the years, Duminy has provided loans to Gcaba to pay off debts. Last year Duminy called in those loans and there was discussion about how much was owed.
According to an affidavit in the court application, in July last year Gcaba signed an agreement that he owed just more than R9 million and that he would pay that off in 24 bi-monthly installments of R380 000 beginning in August.
Duminy said Gcaba provided him with 24 post-dated cheques, drawn on the bank account of Tansnat “which has been at the centre of much controversy regarding financial mismanagement in the hands of Gcaba”.
“The first cheque was met on presentation for payment, but the second cheque was unpaid and returned.
“In terms of the agreement the full claim became immediately due and payable,” Duminy said.
A second meeting was held and at this meeting Gcaba agreed that he owed much more, R14.5 million according to the agreement, and that he would repay it in 29 monthly cash installments of R500 000 beginning April this year.
Duminy said not a single payment had been made and Gcaba sought to vary the agreement for another time, agreeing to pay the full amount in two installments, of R500 000 in June this year and R14 million in August, all in cash.
Again he failed to make any payments.
“It seems that he is unable to pay his debts and has in fact confirmed in writing that he cannot,” Duminy said.
He said security he had in the form of “12 specially hypothecated motor vehicles” was meaningless because they would have depreciated in value and he did not know their condition, mileage or details of maintenance.
Both the applications have been opposed and notices of opposition have been filed.
Duminy’s attorney Manogh Maharaj said he had been promised a settlement offer by close of business last Wednesday, but none had been received.
“Parties are always in settlement talks. There is nothing unusual about that.
“Matters can settle on the steps of the high court, but I have no offer to consider despite the undertaking given by the respondent’s attorneys.
“My client therefore has no alternative but to persist with the prosecution of the two applications.”
The Mercury