Durban -
Auditing firm KPMG has obtained a summary judgment order against one of the country’s largest engineering firms, the Durban-based Elgin Group, for three unpaid bills of about R1 million, including interest accrued.
According to the application before Durban High Court Judge King Ndlovu this week, two of the invoices relate to Intershore Africa Trading – which The Mercury has previously reported was in financial trouble after the cancellation of a Transnet contract– and the other related to Elgin itself.
While the group initially lodged a notice of its intention to defend the lawsuit, it did not persist with this and the judge granted the order.
Elgin, on its website, describes itself as a “powerhouse of engineering solutions”.
It was bought from Murray & Roberts by brothers Ian and Lee Donjeany in 2004.
In the KPMG application, director Oloff van Niekerk said it had entered into several “significant” agreements where it would provide specific services.
One of these was the tax implications of South Africans employed by Intershore but rendering services in Mozambique.
Another was to advise on tax considerations relating to a proposed new offshore structure.
The invoices for both projects amounted to R114 000, but had not been paid.
The Elgin debt related to a due diligence investigation into a possible investment in another engineering firm, Wictra Holdings. The invoice for this was for more than R828 000.
Van Niekerk said Ian Donjeany had, in an e-mail to KPMG director in charge of tax Yasmeen Suliman, indicated that Elgin would pick up the bill for Intershore.
In the e-mail, dated March this year, Donjeany said Intershore had been placed in business rescue.
He said Elgin would settle the account but he needed to check first with the business rescue practitioner to make sure there was no problem with the rescue process.
In a further e-mail, he said KPMG should re-invoice the Elgin group and pass a credit note for Intershore.
He apologised and said “it had all been a bit of mess”.
No further correspondence regarding this or the Elgin debt was put up in the court papers.
Approached for comment, Ian Donjeany said he had been unaware of the application and believed the matter had been settled out of court.
In a letter dated November 27 to Donjeany, copied to The Mercury, the attorney acting for KPMG, Robert Krombein, confirmed there had been an agreement, but that Elgin had reneged on it by not paying the first instalment of R150 000 by November 14.
“It was only on Thursday, after you learned of the judgment, that you paid the amount of R150 000,” he said.
He said provided that the payment plan was strictly adhered to, after the debt was paid up, KPMG would not oppose an application by Elgin for the rescission of the summary judgment.
The Mercury reported in June this year on another court case involving Elgin in which the Donjeany brothers were accused by Transnet of being involved in an “elaborate corporate shell game” involving the award and subsequent cancellation of a R125-million tender to a consortium involving Intershore to construct two new fuel storage tanks in the harbour.
Transnet alleged that Elgin had launched three different high court applications in its attempts to put Intershore into business rescue and attach assets on site which Transnet laid claim to.
Elgin denied this and the matter was eventually settled.
The Mercury