Durban — The Injeje yabeNguni Council has called for the dissolution of the KwaZulu-Natal Growth Fund Trust board following allegations that a black woman-owned business that had applied for funding was sabotaged.
This is after an exposé by the Daily News, which released recorded conversations between Goodlife company director Busi Gumede and a board member, Khaya Thango, where the board member asked for a private meeting.
The social interest group issued a statement calling on Economic Development, Tourism and Environmental Affairs MEC Siboniso Duma to swiftly expel the board to save the institute from “further rot of unprecedented corruption that has become a culture in the fund due to the current board”.
The council’s chairperson, Phumlani Mfeka, said they had received numerous complaints from entrepreneurs who had fallen victim to the “clandestine and conniving manner” in which the fund treated applicants.
The council said the current board had allegedly turned the KZN Growth Fund into their own piggy bank where they suppressed and approved funding based on bribes and political links.
The council further said there were many development finance institutions that had far surpassed the KZN Growth Fund in the development of black industrialists and entrepreneurs.
This was despite the fact that these financial institutions did not have the specific mandate that the fund has.
“It thus goes without saying that the current board has by far been the worst for the institution and for the people of the province who desperately require access to finance so as to realise their entrepreneurial potential,” Mfeka said.
The KZN Growth Fund Trust is at loggerheads with the company after failing to pay funding of R72 million that it had allegedly approved.
The company and the fund are expected to battle it out in the Durban High Court on Friday. The company went to court to demand the reason for non-payment.
Gumede said the fund’s decision to withhold the funding for no valid reason had impacted the company’s operations because she had started it after the approval of the funding.
She also accused the fund’s board of directors of sabotaging her business, saying she suspected they wanted her to agree to kickbacks before the payment was made.
In her founding affidavit, which was seen by the Daily News, Gumede demanded that the board of directors explain why it was “withholding” her funding despite her meeting all conditions the fund had required from her.
She said she applied for funding in August 2020 to start her dairy product firm and the fund allegedly approved R72m, of which R46m was to be paid in October the same year.
MEC Duma said: “We have noted statements from Injeje and we believe that they are in support of our effort to ensure that we use every cent of taxpayers' money to radically transform our economy for the benefit of ordinary members of society.
“Regarding the matter at hand, we affirm our commitment to ensure that we get to the bottom of all the issues. For now, we have allowed all internal processes to proceed without any form of delay.”
Duma added: “At the right time, we will, or alternatively the relevant fiduciary responsibility holders will, ventilate developments publicly as we believe that we owe it to the entrepreneurs and public at large to account for state resources.”
Daily News