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Court suspends liquidation of SA’s R1bn smart factory

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 19 Feb 2020
Yekani Group CEO Siphiwe Cele.
Yekani Group CEO Siphiwe Cele.

South Africa’s R1 billion smart factory, Yekani Manufacturing, has received a reprieve after the courts suspended its liquidation process.

Yekani faced liquidation after failing to repay a R200 million loan from big four bank Standard Bank. The liquidation of the company would have seen about 500 employees of the embattled East London company lose their jobs.

In statement, Yekani says the outcome from the court appearance on Tuesday, 18 February, is that the process to liquidate Yekani Manufacturing has been suspended, pending a hearing on the business rescue application.

The next court date will be confirmed in due course, pending court processes. This yet again confirms the Yekani matter is sub-judice, says the company.

However, according to a Daily Dispatch report today, Standard Bank is looking to oppose Yekani’s business rescue application at the courts. With Standard Bank also opposing the business rescue plan, the matter will be set down for hearing on the opposed roll, it says.

Asked for comment, Standard Bank’s response to ITWeb reads: “The bank is not in a position to discuss any client details with third-parties, and advise that the company concerned should be contacted for comment. Legal proceedings also preclude the bank from providing further comment at this time.”

“Today’s [yesterday’s] outcome allows Yekani to re-affirm its commitment of protecting and saving the jobs of its 500 skilled workers,” says Akhona Mafani, legal advisor and company secretary at Yekani.

The company recently said it takes full responsibility for its problems after reports blamed the husband of communications minister Stella Ndabeni-Abrahams for the challenges.

However, Siphiwe Cele, CEO of Yekani, refuted the allegations that his business is going under because he refused to sell a controlling stake to Thato Abrahams, the minister’s husband.

“Yekani takes full responsibility for its current state and is grateful for the efforts made by the following organisations to save the company and its employees’ jobs – Department of Trade and Industry; the Eastern Cape Office of the Premier; Office of the Executive Mayor: Buffalo City; East London Industrial Development Zone; and the Eastern Cape Department of Economic Development,” Mafani says.

He adds that any matters pertaining to the company’s business and financial processes, including pending or secured business deals, are not only sensitive, but confidential as well.

“In some cases, Yekani has had to sign non-disclosure agreements. All these matters are at the heart of the matter before court and therefore providing details on these would not only mean that Yekani is disclosing sensitive and confidential information, but also that it is interfering with the processes in the pending court proceedings and its outcome.

“Yekani is still not able to provide any further details or comment on any rumours around this matter,” Mafani notes.

Yekani – an information and communications technology company – officially launched the R1 billion electronics factory in the East London Industrial Development Zone in June 2018.

Its portfolio of product categories ranges from education 2-in-1 tablets and laptops, to consumer products, such as mobile handsets.

It also supplied pay-TV giant MultiChoice with its Explora decoders for its DStv platform.

When it opened, Yekani said the world-class, technologically advanced facility was aimed at pushing the limits of technology innovation and was an investment estimated to create approximately 1 000 jobs, not only for the East London community, but also for the much-needed employment boost in the province.

“If government’s intention is to create jobs, it’s important to support local businesses like Yekani instead of importing things that we can manufacture locally,” said Cele, at the time of the opening.

He pointed out Yekani could produce 40 0000 tablets a month, which could potentially create 50 additional jobs.

“We could potentially create 1 800 more jobs. The factory exists and it has state-of-the-art equipment,” he said.

The opening of the 100% black-owned electronics contract manufacture and ICT giant was in response to the call made by president Cyril Ramaphosa in his maiden State of the Nation Address to re-industrialise intermediate cities and stimulate manufacturing in the country.

The 28 000 square metre state-of-the-art smart factory resides within a customs-controlled area at the East London Industrial Development Zone.

The facility is equipped with eight surface-mount technology lines capable of placing 1.5 million components per hour.

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