Durban — A black woman-owned dairy product firm, Goodlife, has taken the KwaZulu-Natal Growth Fund to court for failing to fund her company despite allegedly committing to doing so in writing.
Goodlife Foods is a Pietermaritzburg-based company which provides natural kefir products, which offer probiotic and other health benefits, under the “KePro” brand.
The firm’s director, Busi Gumede, has accused the fund’s board of directors of sabotaging her business, saying she suspected they wanted her to agree to kickbacks before the payment was made.
In her founding affidavit which was seen by the Daily News Gumede demanded that the board of directors explain why it was allegedly withholding her funding despite her meeting all conditions the fund had required from her before paying.
Speaking to this paper on Wednesday, Gumede said after pursuing the board for two years, begging it to pay or explain the reasons for not paying – she felt the only way was to go to court to demand answers or the payment.
She said after exhausting all avenues she was left with no option but to file papers in court because even the Department of Economic Development, Tourism and Environmental Affairs under the then MEC Ravi Pillay did not help.
She said she applied for funding in August 2020 to start her dairy product firm and the fund allegedly approved R72 million of which R46m was to be paid in October the same year.
She claimed soon after the alleged approval, when the day for payment drew closer she received a call from one of the board members who asked to meet her privately because there was something he needed to discuss with her which should not be discussed over the phone. Gumede said she wondered what the board member wanted from her outside of formal engagements and decided not to honour his request.
She claimed that during her signing of the acceptance of funds at the fund’s office in Durban, which was being processed by the then chief executive Lwazi Zondi, a call came in on Zondi’s phone and he went out but after a few minutes he came back and handed over the phone to her, saying “my boss wants to speak to you”.
She claimed it was the same board member who had previously asked to meet her and he reminded her about the meeting he had requested and insisted that they meet before the end of the week – as they both needed to discuss something but not over the phone, which again she did not honour.
“After failing to honour this meeting I realised the payment was not being effected and when I followed up I was sent from pillar to post with no explanation as to why my funding was not being paid. Thereafter there were many strange things happening and one of them was when the fund contacted my suppliers and asked for their banking details,” she claimed.
“This was strange because one of the conditions the fund wanted me to meet was to hire the services of the quantity surveyor and the project manager whom the fund would liaise with and process the payment and these services were costing my company R500 000 a month yet the fund bypassed them and wanted to pay suppliers directly. At one point I discovered that the fund had arranged to pay me through a consultant and I objected to the use of a middleman and for me that was a breach of contract since conditions were that I hire a quantity surveyor and project manager,” Gumede further claimed.
She claimed she was eventually paid R19m in December of the same year and there was no explanation as to when the balance of R27m would come, which she said to date she had not received, let alone the full amount of R72m the fund had allegedly approved.
“Goodlife is in the process of computing any damages it may have suffered as a result of the KZN Growth Fund’s non-performance under the agreement and reserves its right to take appropriate steps once such damages are computed,” read her affidavit.
KZN Economic Development, Tourism and Environmental Affairs MEC Siboniso Duma said although he could not comment in detail since the matter was in court, he had requested a report from the department head to familiarise himself with the matter.
“Notwithstanding this, we wish to reiterate our position that we are committed to ensuring that Growth Fund plays a leading role in ensuring a spatial distribution of its funding. It is therefore important to see progress by the entity towards the creation of black industrialists,” said the MEC.
Equity investment head Xolani Nhlapho said since the matter was before the court the fund would not comment.
Daily News