The Tirisano Construction Fund (TCF) board of trustees has appointed legal representatives to institute legal proceedings against JSE-listed building and engineering group Aveng after it defaulted for 3 consecutive years on its annual contribution to the fund.
This is revealed within the newest TCF annual report, which additionally acknowledged that solely two of the seven corporations – WBHO and Raubex – are up to date with their annual funds to the fund.
Read: Construction corporations that didn’t signal VRP settlement settlement are off the hook
The report stated the board of trustees has additionally appointed legal representatives to make sure the fund is acknowledged as a creditor of Group Five, which is in enterprise rescue, and to negotiate a settlement.
The TCF confused that efforts to be sure that the development corporations honour their commitments fall exterior the belief administration mandate and are being made by the board of trustees in collaboration with the federal government.
Mahomed Vawda, new TCF chair and chief director of funding and improvement on the Department of Trade, Industry and Competition (dtic), advised Moneyweb late final yr prior to the discharge of the TCF’s annual report that negotiations have been happening with the businesses about their funds.
“We have reached some consensus with most of them but I can’t go into the details on that. We are dealing with it and working on that. We are conscious of the challenges that they are having as a consequence of Covid-19 and so on, so those have been addressed,” he stated.
Vawda stated he was unable to speak about whether or not there have been any plans to defer funds as a result of this entails “negotiations between the parties”.
Group Five Construction, the primary working subsidiary Group Five Limited, reported in September 2019 that it was participating with the federal government and the TCF concerning the compensation of just about R45 million it paid by way of the Voluntary Rebuilding Programme (VRP).
The TCF report acknowledged that the development business continues to be in misery.
“As a result, the company contributions have not been in accordance with the settlement agreement.”
The TCF was established by way of the VRP settlement signed between seven JSE-listed building corporations and the federal government in October 2016.
Collusion and bid rigging
The VRP settled excellent and pending civil damages claims from state entities stemming from the admissions by these corporations about collusion and bid-rigging to the Competition Commission through the fee’s fast-track settlement programme.
In phrases of the VRP, the businesses agreed to pay R1.5 billion over 12 years to the TCF to remodel, strengthen and rebuild the development business and to help the federal government in its efforts to handle poverty, inequality and unemployment.
The contributions by these corporations to the TCF are as well as to R1.4 billion in fines paid to the Competition Commission.
The TFC annual report stated that as of July 2021, Aveng had paid R63.8 million however defaulted on its July 2019, 2020 and 2021 contributions.
No remark
Aveng spokesperson Itumeleng Lepere advised Moneyweb final yr in response to a question concerning the standing of the group’s VRP funds: “I have unfortunately been advised to not say anything further regarding your query.”
The TCF stated the present fee actuality is that:
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WBHO and Raubex are up to date with their contributions and WBHO has paid R127.5 million and Raubex R90 million.
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Stefanutti Stocks has paid R58.7 million and has requested that its contributions be rescheduled. A shortfall of R11.25 million from the Stefanutti Stocks July 2019 contribution will probably be paid by July 2024 and the July 2020 contribution has been deferred to July 2029.
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Murray & Roberts (M&R) has paid R85 million and has requested that its contributions be rescheduled due to pressures on money stream. The July 2020 and July 2021 contributions are in arrears and M&R has requested a deferment to July 2022, with negotiations on this ongoing.
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Basil Read was positioned below enterprise rescue in June 2018 and final contributed to the TCF in July 2018. It has paid R4.4 million in complete.
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Group Five was positioned below enterprise rescue in March 2019 and final contributed to the TCF in July 2018. It has paid R45 million in complete.
Source: Tirisano Construction Fund 2022 Annual Report
A consultant from Stefanutti Stocks’s communications firm stated in response to a question concerning the standing of the group’s VRP funds that: “Stefanutti Stocks does not engage with the media.”
M&R group investor and media government Ed Jardim stated the group is conscious of its obligations below the VRP.
“Due to various reasons, we are in the process of finalising a revised contribution schedule with the dtic in order for the required payments to be made,” added Jardim.
The TCF stated that of the R469.4 million acquired in contributions from the seven corporations, the board of trustees has dedicated funds amounting to R445.5 million to tasks or programmes.
However, outgoing TCF chair Mike Wylie highlighted some oversight points within the fund’s newest annual report.
He stated the ministerial supervisory committee, established to oversee the implementation of the aims of the VRP “has not been functional for the past five years”.
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Wylie confirmed he and TCF CEO Anita Loots attended a gathering with Public Works and Infrastructure Minister Patricia de Lille and Agriculture, Land Reform and Rural Development Minister Thoko Didiza on 18 March 2022.
“Hopefully, this ‘partial supervisory committee’ assembly is an indication of issues to come.
“I’m not, nonetheless, hopeful as a result of to get the ministers of the 4 portfolios – public works and infrastructure; agriculture, land reform and rural improvement; commerce, business and competitors; and transport – across the desk collectively is unlikely to occur, despite the fact that it’s their legal obligation.
“I sincerely hope that, in my retirement, I am proved wrong,” he stated.
