Despair as panelbeater co-owned by Makaziwe Mandela sinks

No income, children taken out of school due to unpaid fees, homes and cars gone.

This is what several employees of Danmar Autobody - a brand operating in the panelbeating industry for about 20 years - are facing as business rescue practitioners ask the courts to place the company in liquidation.

Employees told TimesLIVE that the last time some of the staff were paid was in November 2019.

Danmar Autobody, which is owned by Makaziwe Mandela and her business partners Howard Bloomberg and Colin Yach, was bought from Imperial for R20m in 2016. Bloomberg says he is striving to find a buyer and to apply for government assistance to help the staff.

Helenka Oosthuizen said she had worked for the company since 2006 when it was still known as Imperial. Oosthuizen said the last time she received a salary from the company was in November 2019.

“It first started with receiving salaries late and then it resulted in accounts being paid late and then our credit scores worsened,” she said.

Oosthuizen said she was forced to take her child out of school because she couldn’t afford the fees any more.

“It’s been hard because I am also looking after my elderly mother and we don’t have food. Our family had to help us and we almost got kicked out of our house. With the lockdown, we couldn’t move so that came as a blessing in disguise. But for how long, we don’t know. We also can’t look for work because of the situation.”

Thabang Papa, who worked as a driver at the company, said he had to give up his rental flat and move in with his family. Papa, his wife and daughter now share one room.

Former truck shop manager Shaun Hedley said he had to put his home on the market.

“The banks have been on our back for payments. We received payment relief, but when it’s over we still have to sell our house because there is no way we will catch up to the arrears.”

Two business rescue practitioners (BRPs), Harold Cesman and Kobus Coetzee, have launched an urgent court application at the high court in Johannesburg to have the company, registered as Panel Shelf 770, liquidated.

They want the court to convert the company’s business rescue into liquidation, saying it is not “capable of being rescued”. 

The BRPs said they were unable to get funding for the company to continue operating and could not find a buyer.

In addition, they have said they discovered what appeared to be “an improper misuse” of company funds by one of the shareholders.

“It would appear that [the shareholder] utilised the company's funds to fund his own personal lifestyle and to capitalise another business in which he is the sole member. Since he became involved with the company in 2017, [he] appears to have misused R18.5m to his own bank accounts and through cash withdrawals,” Cesman said in his founding affidavit.

Cesman said the company's major creditors, who represented the majority vote in any meeting for the adoption of a business rescue plan, had unequivocally stated that they would not support a business rescue and preferred a winding-up of the company. 

Cesman and Coetzee also raised concerns about the apparent failure of the company to pay VAT and its alleged indebtedness for millions of rand to revenue service Sars.

Bank statements contained in the court papers showed that the amounts owed to Sars and the department of labour had been deducted from employees’ salaries.

“Once Danmar is in liquidation, the employees can claim their salaries and other payments while the liquidators investigate,” said Wikus Steyl from Ian Levitt Attorneys, representing the BRPs.

Steyl said there had been no confirmed court date set down for the matter.

Tracey Lewis, who worked at the company’s Booysens branch as a costing clerk, told TimesLIVE that staff were left cash-strapped over the festive season.

“We all were sent on leave with no money for food or presents for our families. We arrived back at work on January 6 2020 still with no salaries.”

She said her medical aid had since been suspended. “I have health issues and am on chronic medication. I’ve had to [borrow] thousands of rands off my family just to help with my medication, which isn’t their responsibility.”

She said her car had been repossessed, her credit card debt handed over to lawyers and her cellphone contract suspended. 

“I live with my sister, which is a saviour, because I would be on the streets. I can’t help with the normal rent, water and food which I used to help with, so it’s a huge strain for my sister and two kids.”

Heather Subel, who worked in the marketing department, said her husband was taking care of the most essential household expenses, but they did not have enough to cover costs.

“It is just a shocking and terrible way to survive. I can’t even go anywhere because I don’t have petrol in my car.”

Mandela has not commented on questions sent to her since Tuesday. The BRPs' legal team said she is still a director but has not responded to the liquidation application, is not opposing the application and has not delivered an answering affidavit.

Former CEO Bloomberg said some employees were paid part of their salaries in December 2019 and others in January 2020 and then the business rescue took place.

Bloomberg denied claims that the company did not pay UIF, PAYE and VAT.

“UIF was paid but fell into arrears. I understand that this did not affect the right of the staff to apply but they were still employed at the date of business rescue.

“The initial business rescue practitioner assured the directors he had arranged post-business rescue funding and that the staff would be taken care of.

“In fact the employees were incited to threaten me to procure my resignation on the strength of the promise that when I resigned as CEO salaries would be paid. This proved to be a lie,” he alleged.

Bloomberg said he was excluded from the business rescue process despite his efforts to help.

He said he was in the process of getting a buyer to take over and protect the employees.

“I have undertaken via the TERS Fund, and at my cost, to seek relief for the staff for  three months. I am advised that each employee will receive funds. If successful, these monies will be controlled in trust and paid out to the qualifying employees.”