The owner of a multibillion-rand tech company claims his business is going under because he refused to sell a controlling stake to the husband of communications minister Stella Ndabeni-Abrahams, the Sunday Times reports.
Yekani – an information and communications technology company – officially launched the R1 billion electronics factory in the East London Industrial Development Zone in June 2018.
However, the company is facing liquidation.
According to Sunday Times, Siphiwe Cele, owner and CEO of Yekani Manufacturing, which until August last year built MultiChoice's Explora decoders, says the Industrial Development Corporation (IDC) introduced Thato Abrahams to him as an “investor” who would buy a “majority stake” in his business “for R1 billion”.
However, he says after he declined to sell to Abrahams, his business ran into trouble and his pleas for government help – to save his company and the jobs of more than 500 employees – fell on deaf ears, the report says.
It adds that Ndabeni-Abrahams insists she first learnt about the meeting from the Sunday Times inquiry two weeks ago, and Abrahams denies ever wanting to buy a stake in Yekani.
However, Cele, Abrahams and the IDC all agree the finance institution arranged a meeting at its Sandton offices in April 2018 to introduce Cele to Abrahams so they could "explore synergies".
The IDC acknowledged that it was not "standard practice" for it to arrange such introductions, says Sunday Times.
It notes that Ndabeni-Abrahams was deputy minister of telecommunications and postal services at the time, raising a potential conflict of interest because Yekani, which also made smartphones, fell under her sphere of influence.
According to the report, her spokesperson Nthabeleng Mokitimi-Dlamini said yesterday: "It is disingenuous to blame the minister's husband for the challenges faced by Yekani ... The minister's husband is at liberty to pursue business interests as long as all is above board."
Abrahams yesterday said it was "unfortunate that Cele would claim that myself or my wife have anything to do with the liquidation of his company. He should try to find the root causes of this unfortunate development and not use my family as a scapegoat."
Sunday Times says Yekani is now facing liquidation following an application in the high court in East London by Standard Bank, to which it owes R68 million. The company did not reopen after the Christmas break.
To stave off liquidation, Yekani Manufacturing's boss, Cele, is looking to foreign investors in Nigeria and Canada, says Sunday Times.
In an affidavit before the high court in East London, Cele says Nigerian company Tingo Mobile has shown interest in buying an 80% stake in Yekani.
"Tingo confirms its interest and states that it is prepared to make payments of the initial sum of R80m for the purpose of paying [Standard Bank] so that the winding-up can be avoided," Cele states.
He says in the affidavit that a Canadian manufacturer of interactive whiteboards also wants in. "It has completed its due diligence and a draft agreement has been drawn up."
The report says Cele argues his company should not be liquidated because it has secured lucrative new deals, including a R700 million contract from the South African Post Office to manufacture set-top boxes.