VR Laser shareholder forced to sell shares below market value, Zondo hears
Johannesburg - The Zondo commission has heard how a shareholder of Gupta-linked VR Laser was forced out of the company and pressured to sell his shares for less than the market value.
Benny Jiyane, who worked and owned shares at VR Laser South Africa, took the stand on Tuesday and painted a chilling picture of how a deal to sell shares at the company brought in the controversial Gupta family.
In 2014, Jiyane said he had a plan to seek an investor willing to buy shares in VR Laser. He originally held a 30% stake in the company and eventually owned only 25%.
VR Laser manufactures defence equipment for amoured vehicles.
He said he was introduced to Salim Essa in Abu Dhabi where state-owned arms manufacturer Denel was advertising.
When he returned to South Africa he met with Essa who introduced him to his business partner Iqbal Sharma.
Essa was interested in buying the shares that were up for sale at VR Laser. The deal was concluded in December 2013.
Jiyane said in January 2014, he got a call from a financial manager at the company who told him that there were men who had arrived claiming to be the new owners of the business.
Jiyane said he was surprised and rushed to meet with them.
One of the men introduced himself as Tony, which Jiyane later understood to be Rajesh Tony Gupta.
He questioned the men who claimed to represent the interest of shareholders Essa and Sharma.
When he inquired with Sharma, he was told to work with the men. Jiyane said he never saw Sharma or Essa after the last encounter where the deal was signed.
From then on Jiyane said he was sidelined and his staff was instructed to report to the men and not to him.
He said this frustrated him.
A few weeks later, in February 2014, Jiyane said he was forced to sell his shares in the company when it became clear that he was not wanted.
"I was upset because now I had to negotiate with people I did not know. Because they told me I had to negotiate. I wanted to be compensated just like the other shareholders, but I was told I am not going to get the money that I want. We had heated exchanges. It took me a couple of days and it affected my health. I decided to sit down with the family and said we should accept the offer. The difference between what they paid me and what they gave to other shareholders was R8 million," said Jiyane.
"The intentions were becoming very clear that I was not part of what they wanted," he said.
Jiyane said his shares were sold to a shell company. He said one of the Gupta brothers, Ajay Gupta, once addressed a company staff meeting and it was the first time that a member of the Guptas had done so. He said it only became clear later that Essa was a proxy for the Guptas to gain shares in the company.
After his resignation, he stayed on as a director in the company for a year and eventually resigned in February 2015.
Jiyane said he had no part in the Denel Asia deal as he had already left the company.
The Guptas used VR Laser to create VR Laser Asia run by Essa. The company and Denel had plans to form a joint venture which would have seen the selling of Denel's intellectual property.
Denel, whose board was chaired by Daniel Mantsha - who has been accused of working with the Guptas, signed off on the deal
When the deal was halted by the National Treasury, Denel took the department to court over the matter.
VR Laser SA is now one of several Gupta companies that have gone bankrupt and were placed under business rescue.
Earlier, the commission heard from Martie van Rensburg, a former board chairperson of Denel, who said the Denel Asia deal was not going benefit Denel and instead VR Laser would have benefited from the deal.
"It did not make commercial sense or strategic sense," said van Rensburg.
The inquiry continues on Wednesday and will hear testimony from former Denel CEO Riaz Saloojee.