Nafcoc goes on a spending spree

2012-08-11 14:02

Chamber now criticised for ‘competing with its members’

The National African Chamber of Commerce and Industry (Nafcoc) – a non-profit business support organisation which has spent much of the previous decade entangled in leadership squabbles – is on the road to clean up its image by going on a spending spree.

Already ticked off from its shopping list is a 51% stake in emerging medical-aid scheme Medicash, with 3 000 primary members, and a 20% stake of Mobile TV.

The chamber is also preparing to launch a R15-billion infrastructure development project in Midrand, north of Joburg.

The Medicash and Mobile TV investments were done through Nafcoc’s new investment arm Silver Vanity instead of the chamber’s troublesome cash cow Nafhold.

Silver Vanity is also set to finance the Midrand project.

Nafhold has, in recent years, become a source of conflict as Nafcoc members fought for the hundreds of millions that were held in its bank account.

Silver Vanity, which is chaired by Nafcoc president Lawrence Mavundla, is owned by Nafcoc provincial and sectorial trusts.

The chamber’s vice-president, Sinyosi Sikhosana, explained that they bought the Medicash controlling stake for R20 million.

He hoped the acquisition will result in a R50-million net-asset value increase in Silver Vanity.

Before the stakes in Medicash and Mobile TV were acquired, Nafcoc generated R2 million – a bulk of its cash – from the leasing out of the Pan-African Parliament (PAP) building in Midrand to government.

Sikhosana added that the R15-billion infrastructure developmental project would be rolled out in the PAP precinct.

He said Silver Vanity was already negotiating with foreign investors with the aim of having them fund most of the project.

The project would result in hotels and houses for members of Parliament, and offices for international business organisations.

“Our Pan-African Parliament building lease runs out in four years and we want to turn the precinct into a top-class space so that it becomes attractive for the government to renew the lease,” he said, adding that the first stage of the project should start in 2014.

Nafcoc member Tim Tebeila did not support the chamber’s latest investments.

He said: “For a chamber to spend its time making investments instead of helping its members create businesses is going to create conflict in future.”

Tebeila is also the chairperson of coal miner Sekoko Resources.

According to him, chances were high that Silver Vanity could end up being plagued by infighting just like Nafhold. “A chamber must not compete for business with its members.

“Instead of going into business, Nafcoc should focus on helping the government to create policies that will enable small businesses to thrive.”

Sikhosana disagreed that the investments could be a source of conflict.

He said: “The reason there was conflict between Nafcoc and Nafhold is because there were no proper definitions on shareholding within Nafhold.

“Nafhold, for instance, did not have shareholder agreements and we focused more on chasing business deals instead of creating the correct accounting systems on share ownership.”

He explained that Nafcoc will continue to be a beneficiary of Nafhold but that they would no longer use Nafhold as an investment vehicle. This means Nafcoc assets are now controlled by Silver Vanity.

Sikhosana said Nafcoc’s vision was to have Medicash offering a wide variety of products at discounted rates with the aim of competing with the big medical-aid players in the industry.

He added that the chamber’s nine provincial and 11 sector offices would be used as the Medicash branches.

“We also plan to recruit hundreds of agents to do sales across the country. This investment is going to create many jobs.

“Our aim is to grow the company’s portfolio to 10 000 primary members in five years.”


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