Toll company in trouble over BEE fronting

18 December 2011 - 04:13 By ROB ROSE, STEPHAN HOFSTATTER and MZILIKAZI WA AFRIKA

THE company behind Gauteng's controversial R20-billion Gauteng toll road system stands accused of "black empowerment fronting" in a bid to win the deal from the SA National Roads Agency.

In papers in the High Court in Pretoria a shareholder of Tolplan, Lennox Matshaya, claims the company used him as "window dressing" to land the controversial deal.

This is the latest scandal to hit the Gauteng toll project - after claims that an Austrian company, Kapsch TrafficCom, will get 85c of every R1 in profit from operating the tolls as part of a R6.2-billion, eight-year deal.

Cosatu secretary-general Zwelinzima Vavi and civil society groups have lobbied for the tolls - which may thereafter be rolled out in Durban and Cape Town - to be scrapped as they will drive up the cost of living.

People travelling regularly between Johannesburg and Pretoria will pay an extra R500 a month while economic studies say the tolls will increase the bread price by 12c per loaf.

Now Matshaya's claims throw the spotlight on how Sanral picked its suppliers, putting more pressure on it to re-examine the deals struck to create the toll system.

Tolplan was at one stage owned entirely by the family trust of Pretoria businessman Willie Pienaar.

The company has also played a central role in the toll saga - leading to claims it was both player and referee in the process.

Tolplan carried out the initial "feasibility study" that concluded tolls could be used to raise cash for Sanral. The company then landed part of the contract to design the 42 toll plazas and scooped an eight-year deal to supervise the running of the toll roads.

The court papers contain claims that, after scoring deals from Sanral estimated to be worth more than R100-million, Tolplan cheated Matshaya out of his shares.

In an affidavit, black empowerment expert Paul Janisch says: "Matshaya was used as some form of window dressing." He added that Matshaya's "rights as a shareholder" were denied to him.

"Matshaya clearly had little or no say in the executive decisions of [Tolplan] and was treated by at least one staff member ... not as an executive director but as a subordinate."

Matshaya's letter of appointment, dated November 27 2007, offered him shares in all Tolplan's companies - 6% of Tolplan Operations, 4.1% of Tolplan (Pty) Ltd, and 0.5% of Tolplan Investments.

But Matshaya was only ever given the 6% in Tolplan Operations, of which he was made a director. The shares he was promised in Tolplan (Pty) Ltd - the company that will actually make the money from the Gauteng toll roads - were never transferred.

Despite this, Matshaya's name was immediately plastered all over the letterheads of all Tolplan companies in correspondence sent to Sanral.

"Tolplan held out to the world at large, but more particularly to Sanral, that I was a director of [all those] companies," Matshaya says in his affidavit.

Pienaar admitted using Matshaya's name when he was no longer a shareholder.

He told the Sunday Times that "we kept his name on the letterhead because [Matshaya] is very status-conscious".

"We did play with the idea of removing him but we thought it might be construed as a negative statement."

He said he concluded the empowerment deals partly because it was vital to score government work. "Sanral made it clear that any proposal would only be accepted if those things were included."

He denied any claims of "fronting".

He said Tolplan was appointed because Sanral picked "the only two companies in the country with consulting experience" to do this - not because it presented Matshaya was a shareholder.

He said Sanral's only BEE requirement was that Tolplan sub-contracted between 20% and 30% of the work to black-owned firms, which it did.

Pienaar claimed Matshaya "rendered no assistance" in getting the Gauteng project.

However, Matshaya says in his affidavits that, after the Gauteng tolling project "had been secured with my assistance, my relationship with [Tolplan] began deteriorating".

The tipping point was when Matshaya had a car accident in 2009 and borrowed R65000 from the company.

Pienaar gave it to him as a "bonus" - but only after getting him to sign a letter forfeiting his rights to shares in Tolplan (Pty) Ltd and Tolplan Investments.

"I had been under the impression that the document recorded an advance against my annual bonus, as well as my entitlement to dividends," Matshaya says.

But Pienaar said Matshaya's "rights to shareholding had been legally sold" in that deal.

Matshaya said the one-page "sale agreement" did not appear to be a proper contract. His original contract with Tolplan says the entire board must agree first before anyone sells any shares .

But Pienaar said: "Tolplan Operations has 30% black ownership [and] we do have plans to sell 30% to BEE shareholders though."

Sanral said it was "unable to comment" on how it selected Tolplan because its staff were on holiday. But it said the claim that the Austrian company, Kapsch TrafficCom, would be getting the lion's share of toll fees was "completely incorrect". It did not provide any explanation .

Gauteng motorists will pay R230-million every month in toll fees, increasing the average personal tax of each person in the province by 1.4%.

"It sounds small, but it comes at exactly the wrong time because the economy is struggling," said economist Mike Schussler.

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