Johannesburg - Two more Spar executives face possible charges of fraud and perjury for their involvement in the alleged unlawful takeover of Spar supermarkets owned and operated by the Giannacopoulos Group.
According to AfriForum’s Private Prosecution Unit’s statement, five senior management members have now been implicated.
"In December, AfriForum’s Private Prosecution Unit helped Chris Giannacopoulos and his family’s group of companies file criminal complaints of fraud and perjury against executives in Gauteng. Now, Harry Giannacopoulos has filed a criminal complaint in KwaZulu-Natal. The case was opened on Wednesday, March 29, at the Pietermaritzburg police station," added the statement.
The allegations point to the Spar Group, through its executives, falsely claiming in affidavits in 2019 that companies in the Giannacopoulos Group owed it money in order to convince the courts to grant the Spar Group control over the supermarkets owned by the family’s companies.
AfriForum said these alleged misrepresentations were confirmed by the very same high court when the Giannacopoulos Group successfully challenged the unlawful takeover bid.
"In the Gauteng case, two of the implicated parties who filed affidavits in the legal matters in 2019 are Spar’s managing director Desmond Borrageiro and chief executive Brett Botten. The former chairperson of the Spar Group, Graham O’Conner, signed certificates of balance in support of summonses. The alleged misrepresentations — attributed to ignorance by their legal team — have been admitted by some of the suspects and described as an ‘honest and unfortunate mistake’," read the unit’s statement.
Head of AfriForum’s Private Prosecution Unit, advocate Gerrie Nel, said that they were approached by the Giannacopoulos Group because of the skills and expertise that they offer in order to deal with what may be perceived as corporate bullying.
"The impact of the alleged false statements and misrepresentations in court papers has been immeasurable, not only financially, but emotionally too. We have been briefed to monitor the matter and consider private prosecution, should the National Prosecuting Authority fail to prosecute," said Nel.
In a January press release by its board regarding these allegations, the Spar Group said that, in respect of the fictitious and fraudulent loan, Spar’s auditors, PricewaterhouseCoopers Inc., notified the company that they believed the loan to be a reportable irregularity, which required them to report the matter to the Independent Regulatory Board of Auditors (IRBA).
The Spar board of directors then engaged a legal team together with an accounting expert to fully investigate and provide the board with their professional opinions. Over the past month, Spar and the external auditors have conducted investigations into the matter.
At the end of the process, the board agreed with Spar’s auditors that a reportable irregularity had occurred.
"The Board advises that a written loan agreement was entered into between a willing lender and borrower through a commercial bank at normal interest rates with fixed terms of repayment. However, the Board concluded that the loan did not seem to have served any real commercial or economic purpose and should not have taken place," read the statement.
According to the statement, the board confirmed that the extensive review of all loans arranged by Spar for retailers identified two other transactions of a similar nature.
"The combined value of the three loans totalled R11 million. These loans were isolated and occurred five years ago. This arrangement is not Spar practise, and there is no evidence to support any allegations of accounting irregularities with any other loan transactions," said the board.
The Star