bee DEAL OF SHAME
A GROUP of truck owner-drivers are taking Imperial Holdings and its subsidiaries to court, alleging that they were used as "fronts" in a black empowerment scheme.
According to the police statement signed by the 10 owner drivers who opened the case, Cargo Africa, a subsidiaries of Imperial, recruited them to join an owner driver empowerment scheme in 2005.
The scheme was operated by Cade CC under Cade Transport, which in turn were under Cargo Africa. They claim they were told verbally that they would own the trucks at the end of the contract.
"Cargo Africa said if we signed the documents we would become the owners of the new trucks. The trucks would be registered in our names with the banks and vehicle licensing department," the drivers said.
When they went to the licensing department earlier this month they discovered that trucks were registered under Cade. They opened a case of fraud against Imperial and its subsidiaries at the Johannesburg central police station.
William Mohlakoana, one of the drivers, said they signed a 60-month contract with Cargo Africa and Cade in 2005.
"Every month R21000 was deducted towards financing the 10-ton trucks. We discovered later, when we went to check with the licensing department, that Cade Transport owned the trucks," Mdhluli said.
To add to their misery, Cade was being liquidated.
Mdhluli said the trucks were not operating because their licences had expired. He and his colleagues feared the trucks might be repossessed by Imperial Bank, which has been calling them and asking about instalments.
Imperial Bank is a subsidiary of the Imperial Group.
Imperial Logistics chief executive Marius Swanepoel said Imperial Holdings was not a shareholder in either Cargo Africa or Cade Transport.
He referred Sowetan to Investec Bank and African Heritage Investments (AHI), which he said were shareholders of Cade.
AHI managing director Mutumwa Mawere said a group of nine men, who were managers and directors of Cade, sold 60percent of Cargo Africa to Imperial.
"They continued to manage under a warranty agreement. They then set up Cade as a managing company of an owner-driver operation. Cade operations were an empowerment scheme."
He said in 2005 Alan Taylor, John Gibbs (who were also managers of Cargo Africa) and the others approached AHI and offered to sell Cade's business rights.
Mawere said Investec Bank financed the transaction to the tune of R40million. AHI provided the surety.
"We bought into Cade because of the empowerment scheme. We saw a potential business that needed a cash injection to prop it up." Mawere said.
He alleged that Taylor and his group pocketed the money "instead of putting it back into the company".
AHI, he said, had been left high and dry just like the owner-drivers.
Mawere said Cade was not doing well before the takeover.
Gibbs accused Mawere of embezzling Cade's cash:
"They bought a very healthy and profitable company from us. We had to produce audited financials done by PricewaterhouseCoopers."
He said Mawere went on to buy another company, Tony Logistics, which ran into financial problems.
"I am personally upset by the whole situation because I was close with some of the owner-drivers," Gibbs said.
He said he had nothing to do with Cade after AHI and Investec took over.
Mawere said Gibbs was "personalising the issue" and that Gibbs knew where the R40million went. He forwarded Sowetan Cade's 2005 audited financial statements. The statement showed that in 2005 the company had a gross revenue of R225million in June, but made a profit (loss) of only R21000.
Taylor, who stayed on after the takeover but has since left Cade, blamed the recession and said the drivers were overreacting.
He confirmed that the idea behind the scheme was that the owner-drivers would own the trucks at the end of the contract.
"Cade was profitable but business was tough. Customer volumes went down because there was not much to transport anymore. This was neither the drivers or Cade's fault," Taylor said.
Investec Bank's head of investor relations Ursula Nobrega confirmed that Investec lent money to Cade Transport and that the bank holds a 25percent shareholding in the company.
She however would not divulge the terms of the loan or how much was paid back.
"But Investec have not been involved in the management of the company nor were we members of the board and management team. Unfortunately, due to client confidentiality, we cannot comment on the terms of the funding or amounts outstanding."
She said Investec was not legally able to comment further, as they are waiting to hear from the liquidators about the outcome of the transaction.
PG Glass is one of the companies that contracted Cargo Africa to transport their products.
PG Glass commercial director Malcolm Cawey said he was aware of problems between Cargo Africa and its driver-owners.
"Cade managed the whole operation, the drivers cannot do anything because it is the proxy holder. But at the end of the day we have a binding contract with Cargo Africa."