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ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
20 February 2004
MEMBERS OF THE FISHING COMMUNITY: PUBLIC HEARING
Chairperson Ms G Mahlangu (ANC)
Documents handed out:
The Committee heard complaints from the Cape Town Harbor Co-operative that had previously asked Parliament to intervene when their company was allegedly also being mismanaged. The delegation was trying to elicit information from their Managing Director and again sought Parliament's intervention. In an emotional meeting, the co-operative parties agreed to improve communications, hold a constructive meeting of shareholders and send out a newsletter explaining the financial situation. Managing Director, Mr Deveaux Wolhuter, said that the company needed to pay off its substantial debts by May or June, whereafter the workers could be paid. The Chairperson regretted such late payment and agreed that government officials would continue to mediate between workers and management. The meeting ended with everyone present joining in prayer.
The Minister of Sport, Mr N Balfour, welcomed the delegation of fishermen and a group of Sans Souci high school girls. He encouraged the latter to take active part in the sports disciplines available, and they invited him to visit their school.
Ms Mahlangu invited Advocate Masuta to assist the Committee in their discussion with the fishermen. This delegation had been to Parliament during 2003. Previously the delegation had raised management questions from 1997 to July 2003. An investigation had been undertaken into the allegations, particularly regarding shareholders' investments, and it would question previous senior management. The ANC government had done much to facilitate empowerment of black people in the fishing industry and they should not doubt the Committee's commitment to their plight. She encouraged everyone to ensure this was a constructive meeting.
She reported that the new Co-operative Director, Mr Deveaux Wolhuter, was working very hard to save the company. The Co-operative had not paid tax for several years and this could result in them losing their fishing license. The Director had agreed that after the outstanding debts had been paid, the shareholders could receive the remaining monies in the company. The Committee was comfortable with the director paying shareholders directly.
Mr R September (ANC) said Mr Deveaux Wolhuter had approached him the previous day to present his side to these deliberations. When asked who knew him, Mr Wolhuter named a Mr Wallace (PAC) and Mr September remembered him from their university years. There were also cases pending at the Law Society against Mr Wolhuter. He said it appeared that well educated people getting away with giving poor fishermen misleading information. He hoped that all stakeholders would come forward and present honest evidence during the investigation.
Mr Wolhuter submission
Mr Wolhuter was most concerned about Mr September's statements and questions he had been asked informally. He had spent eight years studying with Mr Wallace at UCT and they had been well acquainted then. A case had been lodged against him at the Law Society by the previous Managing Director. He was proud of his achievements and had a successful small legal practice. He had gone to Khayelitsha as the Managing Director of the Co-operative to help people and felt a deep commitment to the company He suggested there were persons present who wanted to gain the Co-operative's fishing rights.
One of the MPs said he would have liked to resolve this matter but it was clear that an atmosphere of antagonism prevailed.
Ms Mahlangu said the principle of a public hearing was that everyone was welcome but the presence of non- shareholders in the company made it difficult for the Committee to know to whom they should respond. During the last meeting, half the delegation were not shareholders and had been asked to leave.
Mr Wolhuter said the company had R1.5 million owing to the SA Revenue Services (SARS), R160 000 to their company auditors and R179 000 to their lawyers. The latter had threatened to bring an application to the High Court to have the company liquidated, and he produced documents to substantiate these assertions. The lawyers were now demanding R420 000 but he was opposing this to the Law Society. This money should be paid as dividends to shareholders, not for lawyers' fees.
Prof Mbadi (ANC), who was translating from English to Xhosa, said these matters should have been communicated to shareholders who had now come to Parliament to intervene. He encouraged Mr Wolhuter to improve the company's communication strategy.
Mr Wolhuter said the company consisted of 25 co-operatives and 3 trusts. He had communicated until 10pm many evenings in areas such as Atlantis and Saldanha. They had established a regular newsletter to keep shareholders informed and the company had communicated more in the last six months than in its entire prior existence. Shareholders were even bussed in to attend meetings at the company's expense. He said 90% of the company were satisfied and supported the new management. He reiterated that the company was rotten as a result of the previous management.
Prof Mbadi asked for copies of the newsletters and the other documents to which Mr Wolhuter referred.
Mr Wolhuter said he had only six months to save a company from seven years of mismanagement. Two of the company's factories, Pro Fish South Africa and Pro Fish Mosselbaai, had been closed down as unprofitable. Their combined operating cost amounted to R65 000 per annum and they had operated for three years without making a profit. The management of these factories was also against him for closing the factories. Approximately R4 million had been invested into factories that were now standing idle.
Prof Mbadi said the fishermen were complaining that they had no idea what was going on in the company yet the fishing quota's used by the company were in their names. They had not had any dividends paid to them since 1997. Many did not even know of the existence of the factories Mr Wolhuter mentioned.
Mr Wolhuter reiterated that for the past six months, he had been under constant attack on various fronts by his predecessors. He had already 'closed all the taps' where the company was leaking resources. The company had fishing rights to squid, abalone, hake, linefish and crayfish. Marine and Coastal Management had rescinded the squid quota because the previous management had not utilised its fishing rights. The hake license had also not been renewed but the company was in the process of appealing this decision. If the company lost its abalone rights, it would not be able to remain afloat as it had 3 000 shareholders who all wanted to be compensated. They were now begging to hold on to their remaining quota because of blatant incompetence.
Fortunately the company had benefited from joint venture projects with Oceania, who used the companies fishing rights and marketed the fish in exchange for a share of the profits. If it were not for these joint ventures, those fishing quotas would have been lost as well. The Company was suing the previous management in a bid to regain some of the money. They were also in the process of conducting an audit to investigate where all the money had gone during the last few years.
Prof Mbadi said the fishermen asked how much money was still in the company. He suggested the company conduct a general meeting of all shareholders and volunteered to act as interpreter.
Mr Wolhuter said money was now coming in from the harvesting of crayfish, but unfortunately they were not of export quality. The crayfish co-operatives in Hout Bay were benefiting from dividends. He hoped that the Cape Town co-operatives would also benefit when the crayfish migrated towards that area.
The Joint Ventures were with reputable companies and the money was well documented; he foresaw no problems with obtaining the money or records. The company had made arrangements with the SARS to pay the outstanding taxes in installments. SARS would not give the company a tax clearance certificate if it did not pay its taxes, and the Department of Environmental Affairs and Tourism would not grant them fishing permits without a tax clearance certificate. He was sorry he could not speak Xhosa, but said he have been working hard to ensure proper communication was affected. He referred to an incident where he was threatened with firearms in the line of conducting his work for the company. He added that in May 2003, the company income was R700 000 and expenses R1.1 million; in June 2003, income was R734 000 and expenses were R963 000 and in July 2003, income was R597 000 and expenses were R963 000.
Adv Masuta said the shareholders wanted to play a more significant role in management. He suggested they elect spokespersons who could enter into discussions with senior management.
Mr Wolhuter said he had been campaigning for the very same result within the company.
Adv Masuta said the newsletters should contain a detailed list of the financial status of the company. He also proposed that the newsletter be translated into Xhosa and not only Afrikaans.
Mr Wolhuter said the company held frequent meetings. It was only the Cape Town Harbor Co-operative present here, who had not attended these meetings.
One of the fishermen said everything Mr Wolhuter had told the Committee was a lie. If he wanted to save the company, he would not have replaced all the black staff with white people. He also claimed Mr Wolhuter's father was given R17 000 by the company.
Ms Mahlangu said the news media should not be confused into thinking that the fishing industry was in disarray. The people in the public hearing had been given fishing rights that could have changed their lives, but they now had to fight to ensure their company was properly managed. She went on to explain that Mr Wolhuter had originally been appointed as company attorney. However, he had risen to CEO status in a mysterious manner - this was possibly a public breach of trust.
Mr Masuta stated that every corporation needed to be legally structured and have appropriate appeal mechanisms when problems arose. Debating which people were entitled to payment was futile because no payments had been made for seven years.
Mr Wolhuter asserted that there were other directors who had not been paid. Using legal guidelines, he hoped to find jobs for as many fisherman as possible. He had become CEO in a legitimate process that was confirmed by the Cape High Court. At the annual company meeting, in which proper notice was given to all company employees, he was voted into his current position. Now, he had only six months left of his seven year effort to serve the company. He could spend that time fighting or trying to help employees. Unfortunately, he did not have the appropriate documents with him that would affirm his argument. After this hearing, he would be happy to receive inquiries from anyone.
Ms Mahlangu stated that the government would protect the rights of the fisherman. She did not understand why Mr Wolhuter was so angry. Only two days ago, he had suggested that any leftover money should be distributed among shareholders.
Mr Wolhuter stated that he had urgently needed to appoint new leaders to deal with matters at sea. On Monday, he had agreed to hold a constructive meeting with shareholders. They could pay off the company debt before May or June and after this, would pay fishermen.
Ms Mahlangu responded that the people were hungry now and wished payment could be made sooner. Mr Wolhuter should put the dates that the company would make payments in writing. Government officials would continue to mediate between Mr Wolhuter and the fishermen's leaders.
Mr Wolhuter agreed to this, stating that he would write a newsletter by Monday that would explain company plans. Mr Mbadi would help him translate it. He needed to find a good venue for the meeting.
Ms Mahlangu acknowledged that the people could not be granted everything they wanted. The issues discussed were very complicated. He suggested that everyone join in prayer to seek strength in finding solutions.
Everyone present rose to say a prayer together and then the meeting was adjourned.
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