Pretoria - Bell Equipment, the listed manufacturer of heavy equipment for the construction and mining sectors, has laid criminal charges against 5 senior managers in its operations in the Democratic Republic of Congo (DRC).
The charges relate to the R60 million knock the group took in the six months to June from theft, fraud and misrepresentation by its entire management team and several other employees in its DRC operations. One of the allegations is that the DRC management team overvalued its inventory and set up some businesses on the side that were involved in selling certain of Bell Equipment’s components.
The group previously had dismissed the entire DRC management team. Four of the five senior managers were South Africans. It subsequently dismissed another seven employees, one of whom was a South African.
Gary Bell, the chief executive of Bell Equipment, confirmed this week the charges were laid “a month or two ago” but they had not received any feedback since they were laid.
Bell added the group would wait for the outcome of the criminal case before pursuing civil damages claims against the implicated employees.
Bell Equipment’s operating profit from the Rest of Africa slumped to a loss of R123.2 million in the six months to June from a profit of R26.4 million in the prior period. It confirmed the group was continuing to explore the option of shifting some of its activities in South Africa to its factory in Germany to improve its competitiveness.
Read also: Bell takes R60m hit from DRC fraud, theft
In its financial results statement for the six months to June, the group said political and economic instability and the increasing cost of doing business in South Africa remained a key concern and it continued to evaluate the merits of increasing activities at its German facility, which was closer to the higher volume northern hemisphere markets.
Bell stressed this week the options being considered were not driven at all by issues such as political risk in South Africa. “We will be doing it to reduce our cost,” he said. “Being more (globally) competitive will help to grow our business in South Africa. We will always have a strong presence here and hopefully a growing presence.
“We’re looking to improve efficiencies and allow us a bigger share of the global market and create more opportunities here. That is the intent,” he said. Bell said the group had a global market share of 12.5 percent in its core articulated or dump truck sector, but wanted to increase this to 20 percent.
He said Africa consumed only about 5 percent of the world’s yellow machinery. The US and Canada are key markets for the group.
Shares in Bell Equipment remained unchanged yesterday to close at R12.05 on the JSE.