Poor community gets no returns from multimillion-rand farm
About 650 families in Riemvasmaak in the Northern Cape are owners of a multimillion-rand grape farm – but that’s only on paper.
In reality, they allege, the community has no clue what’s happening on their land as two administrators appointed to run the trust that owns the farm have kept them in the dark even though the administrators received a multimillion-rand fee from the department of rural development and land reform.
The Vaaldrift farm in the Augrabies area was given to the beneficiaries in 2008 by the department as part of a land restitution claim. The government paid R28-million for the land and R12-million in development assistance grants.
In an area where unemployment is high, the farm, which produces table grapes and raisins, was meant to be a lifeline. But four years down the line, the community claims they have not benefited.
And they lay the blame on the administrators appointed by the master of the high court in Kimberley after the previous trustees were removed. The trust was placed under administration in April 2009 after the abuse of trust funds was uncovered.
Two former office bearers of the Riemvasmaak Community Development Trust were convicted last year of stealing R650 000 from it. A case against a third trustee is ongoing.
Attorney Roger Matthews and accountant Lloyd Theunissen were appointed by the Kimberley master, Craig Davids, to take over the management of the project. But it is alleged that they have alienated the community and appear to be acting in their own interests.
The rural development department says it paid R4.2-million to the administrators until the contract ended in August 2012. The master of the high court then extended the contract.
In an emailed response, Theunissen said: “Mr Matthews and I are trustees appointed by the master of the high court and not by the Riemvasmaak community and we administer the affairs of the trust. The master extended our term and is the only person who can and will determine when our appointment ends. We act on his instructions.”
He said there was no money to distribute and benefits would only be realised “if we are given the opportunity to complete [proposed] business projects”.
He failed to answer questions about who was currently paying them, though administrators are generally paid out of the assets under judicial management.
The apparent secrecy surrounding the running of the trust has raised the ire of the community, which has opened a case of fraud against Matthews and Theunissen.
“There is money coming in and out of the trust bank account yet we have no idea what is going on because we have never seen any financial statements except for a page distributed at a community meeting in 2012, which didn’t make sense,” said Freddie Bosman, a community representative.
“Why the secrecy?” he asked.
Theunissen denied the allegations and said regular meetings were held with the community to discuss issues affecting the trust.
“The trustees hold strict instructions from the master to report on the financial affairs of the trust, on his direction only,” Theunissen said. They had submitted audited financial statements from 2010 to 2013 to the master.
Questions to the master of the court were referred to the department of justice. Ministry spokesperson Mthunzi Mhaga would only say the department had appointed an investigator to look into the affairs of the trust.
The rural development department is aware of the community’s unhappiness. The land affairs and rural development minister, Gugile Nkwinti, visited Riemvasmaak in April this year and his director general met the community in May.
“The main concern of the community was the relationship between [the] trustees and [the] trust,” the department told amaBhungane.
Bosman said the community itself raised the alarm about the earlier abuse of the trust. “We, the community of Riemvasmaak, took a decision to lay criminal charges against three trustees … The ... other trustees were not implicated in the case as they were whistle-blowers. ”
Theunissen said the other six trustees, which included the whistle-blowers, were removed by the master as a result of allegations of mismanagement of trust affairs and the theft of trust funds.
The community is also unhappy that Bono, a private company hired to manage the farm, is an empowerment partner of South African Fruit Exporters (Safe), a Mauritius-based firm.
“The farm is exporting grapes to Europe under their supervision without consulting the community and they benefit alone … there is nothing for the land owners,” Bosman said.
Safe and Bono spokesperson Lee-Anne Roberts said Bono had responded to a tender advert by the department of rural development in 2009 and submitted a business development proposal.
Bosman said: “There was a draft contract but it was never signed. However, Bono worked on the farm in loose arrangement with the [community] trustees … there were questions raised about finances, which later led to the investigation and arrests.”
Ts & Cs
Bono is renting the farm under a short-term lease while the finalisation of a long-term agreement is underway. “The trust receives a fixed annual lease amount and a 50% profit share,” Roberts said.
But figures disclosed to the community show that, instead of paying annual rent of R1.5-million, Bono only paid R750 000 in 2009 and 2010, and R450 000 in 2011.
Roberts said: “Since we took over the short-term lease, Vaaldrift has seen steady increases of export cartons. [But] a number of factors, including a strong rand, rises in production and labour costs and climatic conditions have impacted negatively on the profitability of the business.”
In the 2012 financial year, Bono distributed a profit share of R120 140 to the trust, but in 2013, there was no profit because of rain damage, she said.
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.