(File Picture: ANA)

JOHANNESBURG - The controversial Recycling and Economic Development Initiative of South Africa's (Redisa) and its management company Kusaga Taka Consulting have been placed in final liquidation and an order granted for their assets to be transferred to the Waste Management Bureau.

Attorneys for Redisa, the only approved waste tyre plan for the country, have given notice of their intention to appeal the entire order granted by Judge Robert Henney in the Western Cape High Court .

In a 101-page judgment, Judge Henney said there had been “an unlawful misappropriation of public funds” by the Redisa directors Herman Erdmann, Stacey-Inger Davidson and Charline Kirk through Kusaga Taka to Avranet and Nine Years Investments as well as by Kirk and Kusaga Taka chief executive Christopher Crozier through Nine Years Investments.

These unlawful payments were in direct contravention of the Companies Act, as well as Redisa’s memorandum of incorporation, he said.

Judge Henney said Erdmann had a substantial shareholding in Kusaga Taka through Nine Years Investments and Davidson through Avranet.

Davidson was the sole shareholder in Avranet.

Kusaga Taka, as a private entity, through its chief executive Crozier “had been implicit in using Kusaga Taka as a vehicle through which money had been misappropriated to Erdmann, Davidson and Kirk”, he said.

The final liquidation orders were granted following an urgent High Court application by environmental affairs minister Edna Molewa for Redisa to be placed in liquidation because of alleged widespread misappropriation and irregular use by Redisa of funds obtained from the environmental levy of R2.30 plus VAT a kilogram on tyres.

At the time when Molewa lodged the application, about R2 billion had been collected by Redisa from the tyre industry.

Darusha Moodliar, the provisional liquidator from Sanek Recovery Services, told Business Report yesterday (thurs) it was difficult at this stage to provide any estimate of the total value of the entire net asset value of Redisa and Kusaga that would be transferred to the Waste Management Bureau.

Moodliar said this was because this calculation comprised two major components, the value realised from the sale of assets and the amount required to settle the claims of creditors, both of which were unknown at this stage.

She also confirmed that the joint provisional liquidators would be ceasing their involvement in the waste tyre operations from the end of this month.

“We understand that the Waste Management Bureau will thereafter take over the waste tyre management process,” she said.
Nobuzwe Mangcu, the managing executive of the South African Tyre Manufacturing Conference (SATMC), the representative body locally based tyre manufacturers, said the tyre manufacturers were of the view that the final liquidation of Redisa was “a good outcome”.

“As an industry, we made our views clear to the Department of Environmental Affairs at the beginning of the process. The finalisation of the liquidation confirms that concerns were valid,” she said.

In regard to the future management of waste tyres, Mangcu said the key was that the plan was managed in a transparent way with sufficient governance and accountability, which was a view that had been expressed to the department.

“If this is done, then the new plan will be successful in our view.

Jakkie Olivier, the chief executive of the Retail Motor Industry Organisation (RMI), whose constituent members includes the Tyre Dealers’ and Fitment Centre Association (TDAFA), said the liquidation had not had any impact on waste tyre collection while it was being managed by the provisional liquidators and collections might have improved.

However, Olivier said there were still problems at the tyre depots and how to dispose of the waste tyres.

Olivier said the RMI had been engaging with the environmental affairs department but did not yet know what the future plan was for waste tyres.

He said it was a bit concerning that all the levy funds and assets from Redisa would be transferred to the Waste Management Bureau because they did not know what was going to happen in the future.

“The concern is will it disappear into a pot of money utilised like the fuel levy or road levy as a tax and get spent on something else or will it be ringfenced for waste tyres,” he said.

-BUSINESS REPORT