Fronting scandal: They used us tooComment on this story
The lawyer for a domestic worker at the centre of a fronting scandal has refuted claims by the company that fronted her to win R160 million government tenders that the firm had been placed “under final liquidation”.
Elizabeth Tsebe’s lawyer, Silas Senwamadi, has denied claims by Corinne Ferreira’s lawyer, Alastair Smith on Wednesday that the Pretoria High Court had placed medical supply company Mille Net Imports under liquidation.
This came as more alleged fronting victims came forward, including nine men who said a Johannesburg-based plumbing company fronted them to make millions of rands since 2005 on the pretext that they were franchisees.
The Star Africa reported on Wednesday that Ferreira had appointed Tsebe as a director and a 40 percent share-holder without her knowledge in 2007, but her benefits had not been commensurate with her position as a shareholder.
The paper further revealed that after the fronting scandal leaked, Ferreira offered Tsebe R3m to leave, but she had rejected it and demanded R10m.
In response, Smith denied any wrongdoing by Ferreira, adding that the liquidators to be appointed by the Master of the High Court would wind up Mille Net’s affairs in terms of the Companies Act and the Insolvency Act before dividing the benefits between Tsebe and Ferreira.
But Senwamadi disputed Smith’s version.
In a letter sent to Smith on Wednesday, he requested that, “you confirm that indeed it is true that Mille Net has been placed under final liquidation, and if so, we request that you furnish us with details”.
Senwamadi later told The Star Africa, “I do not know anything about that so-called notice (of liquidation application). They are supposed to give us notice because our client is an interested party as a member. For them to say they have applied for liquidation without giving us notice does not make sense”.
Smith could not be reached for comment.
It seems Tsebe’s situation was not an isolated case. Nine Gauteng plumbers said a top company registered close corporations in their names and won millions of rands’ worth of contracts but paid them employee salaries only.
Phineas Moeta, a married father of three from Katlehong on Gauteng’s East Rand, said one of the plumbing company’s directors told him in 2005 that he had been given a franchise.
In terms of the agreement, he and others were required to sign a five-year “franchise” contract with the company, he said.
According to the agreement, the company would control all bank accounts, supply material, transport and pay them “salaries” for a year. After that, they would take over.
Moeta said he did between nine and 120 jobs a month, making a monthly turnover of R100 000.
However, he was paid a salary of R8 400 after deductions, from which he had to pay his assistants.
“They used us as a front,” said Moeta. When the company closed, I expected R200 000, but I only got R63 000”.
Neiphas Mashile, a father of seven from Sunward Park in Boksburg, said despite his turnover of between R150 000 and R180 000, he was paid between R2 000 and R11 000.