A non-profit company of Umkhonto weSizwe veterans is threatening to take the Gauteng government to court for a “dismal” breach of an August 2006 business agreement.
Mgwenya Plant and Machinery alleges the provincial leasing agency for industrial and construction equipment, Impophoma, owes it millions of rand.
Under an agreement dating from August 2006 Impophoma would use old military equipment donated to Mgwenya by the defence force.
Mgwenya’s equipment was estimated to be worth R8,5-million, and a profit of R5,2-million was projected for the first year alone. However, three years later the company has received only R145000 from the province.
Now Mgwenya’s lawyer has written to Gauteng’s roads department — Impophoma’s political custodian — to ask for the matter to be resolved.
The Mail & Guardian has seen the lawyer’s letters, but the department’s spokesperson, Kendridge Mathabathe, denied there was a dispute.
Documents in the M&G‘s possession show that Mgwenya first wrote to the suspended roads department head, Sibusiso Buthelezi, in July 2008.
Following a meeting with Buthelezi, it was resolved that a working committee would discuss Mgwenya’s relationship with Impophoma.
After receiving no correspondence from government, Mgwenya’s lawyers wrote to Buthelezi in November 2008, saying that they felt “marginalised by Impophoma from participating in the decision-making, financial reporting, organisation process and general business activities of the partnership”.
Mgwenya director Steve Corry told the M&G he is disturbed that the equipment’s whereabouts and condition are unknown. “Trust has been eroded to the extent that we feel there cannot be any further commercial relationship between the two parties,” said Corry.
He said Mgwenya supplied Impophoma with 45 items of machinery that Impophoma was to repair and lease out, with the proceeds being split between the parties.
Corry said Gauteng paid R3,5-million to a third party to refurbish the equipment. However, only five items had been made operational with no consultation with Mgwenya on the restoration.
Mgwenya would push for a settlement for loss of income and assets.
“We, as veterans, feel betrayed — [We have] not been able to fulfil our mandate — to deploy the equipment in the interests of veterans,” Corry said.