R28m wasted on KZN jazz festival

By Jeff Wicks Time of article published Aug 4, 2013

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Durban - The KwaZulu-Natal provincial government has forked out R28 million for a music concert that never took place. And now it is engaged in a battle to recoup the unspent millions.

In June last year, the KZN Department of Economic Development and Tourism entered into an agreement with a consortium to stage the internationally renowned North Sea Jazz Festival in Durban.

The festival was viewed as a signature event that would attract tourism and investment to the province. It was first scheduled to take place in November last year.

However, after months of wrangling between the festival promoters, rights holders and the department, it has been established that:

* R28m has been paid, of which R16.9m was spent, but the festival has not taken place.

* The department, concerned that the entire budget allocation would disappear, has ordered the promoters to stop spending the money and demanded a refund, thought to be around R11m.

* The department has paid millions for the South African rights to the festival which, it alleges, have been swindled by one of the promoters, Charmaine Cornille. It plans to sue Cornille for the rights.

Documents in the Sunday Tribune’s possession show that the department and the MPM/Softskills consortium, after presentations to MEC for Economic Development and Tourism Mike Mabuyakhulu, entered into an agreement.

A delegation, led by MEC for Finance Ina Cronje, flew to Rotterdam in the Netherlands to “get a feel for the festival itself”. At the festival, KZN and South Africa were announced as the next host of the festival.

The consortium is a joint venture between the two companies. MPM is owned by Tim Mangwedi, Thabang Makwetla and Charmaine Cornille, while the shareholders of Softskills are Noluthando Zungu and Caeser Mkhize.

The trouble began in October last year when Mojo, the Dutch right holders of the festival, cancelled the contract with the consortium owing to non-payment, despite the fact that the province had already paid R28m to the consortium.

Mojo’s chief executive, Jan Willem Luyken, contacted the department to discuss the cancellation of rights and the possibility of resuscitating the project.

Mojo also complained that the MPM/Softskills consortium had not paid a R850 000 bill for the Rotterdam trip. It was during these interactions that the department found what seemed to be a material misrepresentation by MPM/Softskills.

The consortium had claimed that it owned the rights to the festival.

Luyken told the department’s director general, Desmond Golding, that the rights would only accrue to the consortium after a rights fee of $400 000 (R3.9m), $1 000 000 (R9.8m) and $500 000 (R4.9m) for travel costs was paid to Mojo.

It was found that these amounts were not paid to Mojo.

According to the documents, Golding tried to assist the consortium to resolve the problems, as well as deal directly with Mojo, so that the jazz festival could take place. However, during the final stages of the negotiations, a new development emerged.

The local promoters announced changes in their consortium. MPM was kicked out of the deal and replaced by Profile Communication, a company owned by Cornille.

In January, Cornille went to the Netherlands to secure the rights contract for the concert, now scheduled to take place in December.

When she presented a letter from Mojo on the contract, it only spoke about the festival rights for her, and not the local promoter or the KZN government.

According to the documents, attempts by the department to speak to Cornille had met with “outrageous rudeness, insolence and evasiveness”. She also allegedly failed to attend meetings, including one with Mabuyakhulu, to discuss her conduct and the contract.

The reports stated that Cornille had made serious allegations about Golding. According to the report, he rejected the allegations as untruthful and baseless.

The documents state a task team investigating the festival project concluded in March that the acquisition of the rights by Cornille represented a breach of agreement and placed her in a position where she could, in future, trade with rights paid for by the KZN government.

The task team also concluded that the project could not be saved and should be scrapped. It praised the department for freezing the unspent R11.1m and for calling for full accountability from the local promoters for the R11.9m spent.

Cornille has vehemently denied the allegations that her role in the project led to the festival being scrapped.

“I am a whistleblower in this case and I went to the provincial treasury and notified them of fraud and corruption on a large scale. It is not only this project where millions are involved, but in at least 35 other projects which were led by the department,” she said.

Cornille would not elaborate on the details of what she had blown the whistle on and insisted that a forensic investigation would vindicate her.

She would not comment on specific allegations regarding the North Sea Jazz Festival.

Mabuyakhulu’s spokesman, Bheko Madlala, said that the decision to scupper the festival was informed by due diligence.

“With regard to the North Sea Jazz Festival, what we are aware of is that the major events committee, of which MEC Mabuyakhulu and MEC Cronje are part, took a decision not to proceed with the project,” Madlala said.

“This was after the committee had deliberated on all the information available and decided that this was a wise decision to take under the circumstances,” he said.

“We want to stress that at all times, in our understanding, the committee acted as a collective and all decisions that were taken were owned by all the members of the committee,” he added.

Cronje refused to respond to detailed questions, with her spokesman, Musa Cebisa, insisting that she “declined to comment” on the matter.

Sunday Tribune

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