Durban — The Durban University of Technology head of Business School, Professor Fulufhelo Netswera, said the KZN Department of Economic Development, Tourism and Environmental Affairs (EDTEA) was supposed to fire KZN Growth Fund former board member Khaya Thango for his alleged breach of governance ethics following his alleged discussion of funding with an applicant.
Netswera added his voice to growing calls for the provincial government to act against the board for what he termed the “referee and player” scenario in the Goodlife funding application.
Under normal circumstances the board of any institution plays an oversight role in the management of that particular company, he said, therefore it does not get involved in the operation.
If what he was hearing about this particular fund member was true, he was clearly out of order and should have been removed from the board because of his alleged misconduct.
“The work of board members is to play an oversight role on the management’s job. Theirs is to oversee the work of the managers to ensure company policies are followed, so it becomes a problem when the board becomes a referee and player. In this instance, the board was supposed to adjudicate between the applicant and the fund’s management. But because it looks like there was collusion between this board member and the management it could be the reason why the applicant was not getting help,” said the professor.
The issue between the company and the board has generated a lot of public interest following an exposé by the Daily News last week which released recorded conversations between company director Busi Gumede and Thango, where he asked for a private meeting.
Social interest group Injeje yabeNguni called on Edtea MEC Siboniso Duma to swiftly expel the board to save the institution from “further rot of unprecedented corruption that has become a culture in the fund due to the current board”.
The council’s chairperson, Phumlani Mfeka, said they had received numerous complaints from entrepreneurs who had fallen victim to the “clandestine and conniving manner” in which the fund treated applicants.
The council said the current board had allegedly turned the KZN Growth Fund into their own “piggy bank” where they suppressed or approved funding based on bribes and political links.
The council said many development finance institutions had far surpassed the KZN Growth Fund in the development of black industrialists and entrepreneurs. This was despite the fact that these financial institutions did not have the specific mandate that the fund has.
“It thus goes without saying that the current board has by far been the worst for the institution and for the people of the province who desperately require access to finance to realise their entrepreneurial potential,” Mfeka said.
The KZN Growth Fund Trust is at loggerheads with the company after failing to pay funding of R72 million that it had allegedly approved. The company and the fund are expected to battle it out in the Durban High Court on Friday. The company turned to court to demand the reason for non-payment.
Gumede said the fund’s decision to withhold the funding for no valid reason had impacted the company’s operations because she had started it after the approval of the funding. She also accused the fund’s board of directors of sabotaging her business, saying she suspected they wanted her to agree to kickbacks before the payment was made.
In her founding affidavit, seen by the Daily News, Gumede demanded that the board of directors explain why it was “withholding” her funding despite her meeting all conditions the fund had required from her.
She said she applied for funding in August 2020 to start her dairy product firm and the fund allegedly approved R72 million, of which R46 million was to be paid in October the same year.
Duma said: “At the right time, we will, or alternatively the relevant fiduciary responsibility holders will, ventilate developments publicly as we believe that we owe it to the entrepreneurs and public at large to account for state resources.”
Daily News