2010 entrepreneur not guilty of fraud
AFTER a year-long legal battle, Channon Merricks has been vindicated after the Johannesburg Specialised Commercial Crime Court found him not guilty of 28 counts of fraud.
Merricks was the brains behind Soweto Focus Point, a 2010 World Cup accommodation initiative that sought to convert classrooms in Soweto, Durban, Cape Town, Polokwane and Port Elizabeth into backpacker lodges.
To fund the project, investors put in at least R100 000 – as individuals or groups – into the business venture with the promise that it would bring a R2.9m return.
But a directive issued by Boy Ngobeni, head of the Gauteng Department of Education, discouraging schools from taking part in the venture, forced Merricks to pull the plug on the project on the eve of the World Cup.
He was unable to pay investors back, claiming he had spent the money on advertising and furniture for the schools. His company Merricks Empowerment Consultants has since been liquidated.
A small group of investors accused Merricks of embezzling money, but magistrate Ashika Ramlaal found that while he received money from investors, withdrew large sums from the account and never paid it back once the project fell through, there was no evidence that he used the money for his personal gain.
“The applicant has contended through the course of the trial that the monies were utilised to buy furniture for the renovations of the school and for advertising. To a large extent the perusal of his bank statements corroborates this version, and the State has presented no evidence to the contrary,” Ramlaal’s judgment stated.
“I’m happy that I got a sober magistrate who took the time to listen to all witnesses and evidence presented to her,” Merricks said.
“This victory is more important for my family because the family name has been tarnished. My children went through hell at school because of this, so I’m just happy they now know the truth.”
Merricks said that while the battle had been won, the war was far from over. Last year he filed papers in the Johannesburg High Court to sue the Gauteng Department of Education for R506m in lost income for the failed project. The department is expected to file responding papers by Friday.