THE Performing Arts Council of the Orange Free State (Pacofs) stands to lose up to R6,2-million as a result of the liquidation of two companies in which it invested funds.
At the same time, no progress appears to have been made on an investigation recommended by the accounting firm Gobodo Incorporated into three trusts formed by the old Pacofs board between 1994 and 1995. This emerges from documents that have come into the Mail & Guardian‘s possession.
According to Gerhard Visagie, spokesman for the special investigation unit, which is conducting the probe, Pacofs invested R3-million in a company called Scotts Assets. A further estimated R3,2-million was invested in the Gaius group of companies. Both companies are under liquidation.
The investments were made under the financial directorship of Marius Mare, allegedly without board approval. Following internal disciplinary proceedings, Mare was dismissed in July 2000 for undertaking these investments.
Visagie told the M&G the unit is compiling a report to be handed to President Thabo Mbeki in three weeks’ time. However, the M&G has acquired a copy of the report com-piled by Gobodo Incorporated, which looked into the financial viability of Pacofs and recommended, among other things, a thorough probe by the unit into three trusts.
Gobodo says one of the trusts ”gave away public funds for a purpose that was not intended”. Another may have benefited a select band of individuals.
The first two trusts were formed in March 1994 and the third in May 1995. The International Performing Arts Institute Trust (IPAIT) was formed to ”promote and develop Eurocentric performing arts”.
The Lilly Lakewood Trust was formed later that month. It acquired fixed property on loan for R680 000 from Pacofs and had the same trustees as the IPAIT.
Gobodo raised concern about the role of the old board of directors, which had alienated ”Pacofs fixed property to a trust controlled by [the board] and for which they are not accountable to anyone”.
Just more than a year later, in May 1995, The Early Retirement Trust, formed with seed funding of R2-million, was dissolved. The trust was formed to compensate employees who were retrenched or took early retirement, prompting Gobodo to remark that public funds had been used for an unintended purpose.
In a letter to Dr Nathan Bargarhette, chief executive officer of Pacofs since 1999, Minister of Arts, Culture, Science and Technology Ben Ngubane reiterates the recommendation and undertakes to order the probe. Visagie said the matter of trusts was raised, but the unit had no presidential proclamation to probe these.
Bargarhette refused to comment, pending the outcome of the investigation. Andrew Aphane, spokes-person for Ngubane, said all the facts are with the unit.