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MikeHampton
 
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Digging for Truth in Hard Times

25 February 2014, 06:54

Does truth have value? And is truth an attribute you believe a leader you vote for should have?

The expectation of truth, however, seems to occur to many South Africans only when it involves the political party they oppose e.g. willful ignorance. In my hometown of Knysna, that expresses itself as several privileged, white DA supporters being mad at me for questioning the lack of truth and transparency we've experienced under DA leadership. I'm not against whites (i am white) or privilege (i wish i was). And i'm not a member of the ANC (which is sometimes their absurd deduction for my demanding of honesty from the DA). I expect truth of everyone which particularly includes every politician and every party.

We're human so we can falter or fall... and rise again so long as we acknowledge our mistake and enact our apology through action. This is what i'm hoping the Knysna DA and its Western Cape leadership will do.

Our town's economic return to reality (what some may call the permanent recession) is tougher for us, the 68 000, than it is for those in the cities.

We're a town of small businesses... or, rather, we were. We're in flux as small businesses die and are replaced by national chain stores in the malls. Our Main Road no longer has the charm that many visited us for. Much of our industrial area emptied. Property, our second biggest industry, bloated with superficiality, took a dive off The Heads with the Lehman Brothers, Fannie Mae and Freddie Mac. Timber, for which we became famous, took the plunge too.

We were already too reliant on tourism and now we are even more so which makes the financial disaster that happened at Knysna Tourism more relevant than ever to our fragile lives. So is the DA's appalling handling of the situation.

The following email, sent yesterday, is subsequent to a meeting this month wherein DA members MEC Alan Winde, Peter Myers and Magda Moos promised to get the truth regards my accusation of gross mismanagement of Knysna Tourism (which led to its bankruptcy and its Directors, including DA politicians, getting off without payment or punishment). During the past 33 months, no promises from the DA became reality so it's impossible for me to get my hopes up but that doesn't mean that i shouldn't try one last time... and give them a chance despite the challenges that also arose from meeting them (i'll tell you more about that later).

Dear Alan Winde, Peter Myers, Helen Zille & Magda Moos

The goal has long been to understand the financial situation and management of Knysna. This email primarily concerns the Knysna Tourism aspect of that. It further serves to assess the credibility of Alan Winde's (MEC for Tourism, Finance & Development), Peter Meyer's (Knysna DA Constituent) and Magda Moos' (Knysna DA Constituent) offer to assist and the DA's claim to transparency and accountability.

I have exhaustively tried to get answers and being repeatedly blocked for almost 3 years by the DA, Knysna Municipality (KM) and the Knysna Tourism Board. It is notable that you, Alan Winde, have been contacted several times the past 2 years. It beggars belief that you, as MEC for Tourism, whose made many visits to Knysna Tourism, are not aware of the problems and controversy they've experienced.

At our Feb 1 2014 meeting at the Log-Inn Hotel, you promised to deliver detailed budgets of Knysna Tourism but have so far failed to do so. However, in an email, you said, "I am aware that Mike's mail below asks for deeper detail on the tourism budgets. Once he gives me the detail needed I will ask for it on your behalf and report back to the group." I'd clearly asked for a budget, as i have many times, that shows exactly who got paid what. Nevertheless, to seize the opportunity for 100% clarity on Knysna Tourism's finances, i've supplied a summary of my previously, unanswered questions (which are 100% relevant).

It is further notable that you, Alan, have refused several requests for an audio copy of the Log-Inn meeting - that recording should have been the foundation for follow-up. It makes no sense (except if the reason is to delay) that i provide the minutes (from memory) of the meeting before you will give me the recording you have in your possession. The recording would be 100% accurate. It shows bias or faked interest that not one person, besides myself, has requested that recording so that this process moved along quicker - where's the sincerity?

Alan Winde, please erase my doubts and worry that this is yet another blockade by the DA. Please respond to this email positively and actively. Please be genuinely helpful. Let's get this matter behind us and look towards the future of Knysna.

Helen Zille, i address you (again), as DA Leader and Premier of the Western Cape, as you have also been aware of my complaints and requests for investigation into Knysna Tourism (KT) for over two years. This bad situation has been allowed to carry on for far too long. You've failed to respond to a single complaint and publicly perpetuated the falsehood that i'd been helped. You have failed to address those who've poorly represented us. I can hope that you will finally step in, first by responding with emailed good intention and, secondly, by encouraging all involved (that includes your local councillors) to cooperate. You should extend that goodwill by responding to the petition against Knysna Municipality salary increases, the challenge i made to both you and Alan, and the letter entitled, 'Dear Helen Zille, You're My Disappointment'. These are serious issues that should not be recklessly (or intentionally) disregarded. Your silence conflicts with the DA's promised rules of engagement and accountability and thus, in turn, has become a serious issue itself. Please start upholding the DA's website promise of “a maximum 30-day turnaround time for national correspondence". Your failure to act has cost Knysna a fortune and contradicts the local election promise of austerity.

I've purposely avoided laying criminal charges as i didn't want the defendants wasting taxpayers' money on their legal costs but, if this isn't sorted soon, i will have no choice but to commit to such against all involved. The Prevention and Combating of Corrupt Activities Act does not allow you to ignore maladministration (and i've repeatedly made you aware of the maladministration and possible fraud at Knysna Tourism - ignorance is impossible). You have also failed the Local Government Municipal Finance Act which states "that a municipal entity must investigate allegations of financial misconduct against the accounting officer, a senior manager or other official of the entity".

There has only been silence, delays and reasons why not to answer my questions - that can only be labelled as cover-up. Choose to stop that negative process now. What's in the best interests of Knysna should be in the DA's interests, as the ruling party, too! Honour your claimed DA policy of committing to “efficiency and accountability", "clear complaints and feedback mechanisms" and having “constant and ongoing interaction between the government and its voters at all times”.

Answering these questions and supplying the information requested will bring the public much closer to understanding the health of Knysna Tourism. Although much information has been requested, it should not be used as an excuse for slow delivery. It should all be information you have already filed and a lot of it should/would have been bulked together for the investigation that led to the dismissal of Knysna Tourism's ex-CEO, Shaun van Eck. Additionally, i've asked for most of this for years.

Please provide all by March 5 which is 9 days from now. You can provide information as you source it e.g. section A & B could be emailed tomorrow (please label appropriately).

But the first email, which you could send today if you so chose, could/should say that you will gladly cooperate (because you believe in transparency).

I implore your full cooperation and assistance.

KNYSNA TOURISM QUESTIONS

First dispel the lie that the many millions as grant-in-aid you've given Knysna Tourism (KT) for 14 years, as the bulk of their funding, doesn't fall under the MFMA (Municipal Finance Management Act). Do you agree that all taxpayers' monies require oversight? Knysna Tourism is inextricably linked with Knysna Municipality:

1. Deseré Barnard, the Chairperson of the Disciplinary Hearing for the ex-CEO, said: A: "It is important to bear in mind, that 70% of Knysna Tourism’s budget is provided for by the Municipality and constitutes public money"; B: "It is common commercial good practice to ensure that agreements are in place when funding is provided, especially when such funding would come from public funds"; C: "Knysna Tourism was largely funded by the Municipality and this was common knowledge."

2. The agreement with KM in 2000 stated: "The municipality will further facilitate the new dispensation by the continuation of the current levy of businesses in Knysna by the municipality and the payment of this levy income to Knysna Tourism.The parties record that levies are presently collected by the municipality from the businesses of Knysna in accordance with and for the promotion of local tourism for the area of the district served by the municipality in terms of the Local Government Municipal Structures Act 1998 and the green paper on Tourism. Upon the registration of Knysna Tourism, the municipality shall continue to impose and collect levies as in the past and, to the extent that it is empowered to do so, shall pay over the nett proceeds so received to Knysna Tourism to be dealt with in accordance with the latter's memorandum and articles of association."

3. 3-4 municipal representatives have been present on the Tourism Board for years. This has included the Municipal Manager, DA Mayor, DA Deputy Mayor and DA Speaker. The Municipal Director of Finance, Grant Easton, is on the Knysna Tourism Finance Committee.

4. 2012/2013 budget speech, Mayor Georlene Wolmarans: "The main Grant-In-Aid allocation given by this Council is to Knysna Tourism which is budgeted to receive only R4 million in 2012/13 as opposed to the amount of some R4.3 million for the current year."

5. Mayor Georlene Wolmarans also said: "Last year Council introduced a new Grants-In-Aid policy which first requires a committee of senior Directors including the Director: Corporate Services and the Chief Financial Officer, and chaired by the Municipal Manager, to vet all applications according to approved criteria. This has immediately begun to cut out random applications or awards which have limited merit and potentially limited impact and going forward further criteria will be developed to ensure the process becomes relevant to the whole community."

6. The agreement between Knysna Tourism and Worldsport, for Pick 'n Pay's involvement in the Knysna Oyster Festival, stated the Knysna Tourism is the official body appointed by the City of Knysna.

7. Knysna Tourism Corporate Governance states that "the company has been set up as a PUBLIC private partnership between Knysna Tourism and Knysna Municipality."

8. Knysna Tourism Corporate Governance code of practice states: "Knysna Tourism acts on behalf of the Knysna Municipality in promoting tourism for the area, and as such the Municipality is the primary source of funding for the company. A service level agreement (SLA) determines the formal responsibilities of both parties covering the funding arrangements provided by the Municipality, and the audit, reporting, business planning, compliance and performance evaluations placed on Knysna Tourism.

9. Knysna Tourism would not exist without taxpayer's money which is the bulk of its budget.

10. The investment Knysna Tourism makes into the Oyster Festival is from taxpayers via a levy imposed by Knysna Municipality.

Admitting there's a problem is the first step to fixing it so please start by admitting there was a financial disaster at Knysna Tourism under a Board of Directors which included staff and politicians from the DA-won, Knysna Municipality (Mayor Georlene Wolmarans, Deputy mayor Esme Edge, Speaker Michelle Wassermann, Councillor Richard Dawson).

1. Claire Kretzmann (Director Michaelides & Co Inc.) stated in the independent Auditor's report: "We draw attention to the director's report which indicates that the company incurred a net loss of R302 709 for the year ended 28 February 2013 and, as at that date, the companies liabilities exceeded its total assets by R148 668. The director's report also indicates that these conditions, along with other matters, indicate the existence of material uncertainty which may cast significant doubt on the company's ability to continue as a going concern. The most significant of these is the ongoing support of the Knysna Municipality through the Municipal Grant-in-Aid." Notably, thereafter, KM granted an advance of R500 800 to KT.

2. Despite the gravity of the situation, the Knysna Oversight Report 2011-2012 only gave Knysna Tourism one line. Why?

Notably, Lauren Waring, Knysna's Municipal (KM) manager stated, "The MFMA is the foundation of the municipal financial management reforms which municipalities are implementing. Knysna was designated as a pilot municipality for the reforms and is engaged in a partnership arrangement with National Treasury." The MFMA requires a Council to adopt three-year capital and operating budgets that take into account, and are linked to, the municipality’s current and future development priorities and other finance-related policies (such as those relating to free basic service provision). These budgets must clearly set out revenue by source and expenditure by vote over three years and must be accompanied by performance objectives for revenue and expenditure, a cash flow statement and any particulars on borrowings, investments, municipal entities, service delivery agreements, grant allocations and details of employment costs. The budget may be funded only from reasonable estimates of revenue and cash-backed surplus funds from the previous year and borrowings (the latter for capital items only). Consequently, what is the 3-year funding allocation for Knysna Tourism?

What is the 3-year plan for Knysna Tourism? Why has the future functions of Knysna Tourism in terms of economic development still not been finalised 15 months after they were work-shopped?

Melony Paulsen, as legal representative to KM, stated to Bruce Wessels (the investigator from the Public Protector's office in George) that the Knysna Municipality has no shareholding in Knysna Tourism so all correspondence must be sent to the latter (i.e. they would not help the PP). It translate as: "We give millions of taxpayers money away and don't care what's done with it." Considering the MFMA, the vast bulk of Tourism's funding being derived from KM, KM's Director of Accounting being on the Finance sub-committee of KT, and the Municipal Manager and politicians serving (or having served) on Tourism's Board of Directors, how can this be considered as a valid excuse not to assist the investigation?

The Oyster Festival is owned by Knysna Tourism. Why did the auditors, Michaelides & Co Inc. (now part of Grant Thornton SA) not audit it as well?

In terms of the Service Level Agreement with Knysna Municipality, why was 20% of the budget not allocated to Development? Why did the Knysna Municipality not ensure that the SLA was complied with. Greg Vogt stated: "We submit reports as required by the Service Level agreement to the Municipal Manager timeously."

1. Reggie Smit (Corporate Services Director - Aug, 2011): "20% of the budget allocation from the municipality must be spend on tourism development."

2. Glendyrr Fick (Tourism Development Officer - Dec 2012): I am aware that 20 % of our budget should be spent on Tourism Development Initiatives."

The biggest complaint from a feedback session i ran for Knysna Tourism in 2011 was that black and coloured people do not consider themselves part of Knysna Tourism's plan for the town. What investigation has there been into the viability of workshops and other initiatives held? How much money has been spent with no legacy gained?

Explain the legal position that allows Knysna Tourism running without a CEO since September 2012.

When will Knysna Tourism appoint a new CEO?

The rules of Knysna Tourism clearly states that the board is responsible and accountable for finance and governance, part of which includes: "The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board of directors sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner". Why has all the blame being laid on the ex-CEO? Why have the directors, which include DA members, not being held accountable? Surely you have to be aware that spending over R400 000 on legal costs, paying the ex-CEO R270 000, and refusing to be transparent suggests a cover-up???

Why have DA members on the Knysna Tourism Board allowed changes to the constitution and illegal payments to their chairman, Greg Vogt?

1. KT's Articles of Association are the guiding documents of the organisation and represent the basis of the organisation partnership. The conditions imposed in this document can only be changed by a General Meeting.

2. Similarly, the King Commission guidelines on Corporate Governance specifically state that any change from voluntary Chairman to Executive Chairman (as Greg Vogt has been profiled in the media) and payment to such person must be approved by the members. This would be especially relevant where Mr Vogt led the proceeding against the previous CEO and now runs his affairs and those of KT from the KT offices.

3. How could your Councillors and Municipal Manager on the Board encourage and allow him to be paid in violation of basic Corporate Governance procedures?

4. Additionally, the Company Act states that, "Shareholders should approve non-executives director's fees in advance." and that that period is 2 years ("in accordance with a special resolution approved by shareholders within the previous two years").

What is the truth behind the fact that no new members could be voted onto the Board at the AGM as all Board Directors were remaining but then had several resigned shortly after? It appeared to be a blocking move to exclude Tourism’s members voting in new Directors, thus allowing the current controversial Directors, who've refused public information, to co-opt Directors they wanted (which, essentially, would have given Knysna Municipality majority shareholding as new Directors would not have initially had voting rights).

What truth is there to allegations of political interference in Knysna Tourism. In 2012, Greg Vogt, Chairman of the Knysna Tourism Board, wrote to Dirk Joubert, a consultant, that after a meeting with previous chairpersons (Mike Mills, Clive Battell, Mike Griffiths, Jenny Smith, Leslie Peters and Colleen Harding) that it was determined that: "Each tenure dealt with very specific municipal challenges pertaining to the political leaders at that time, the Municipal Manager and the Municipal Manager's views." Regards the Councillors, he added that "there always seems to an us and them."

Why did the Tourism Board, which included DA members, instruct Shaun van Eck to spend the surplus in the budget (note that i have the minutes)? This must have contributed to the financial disaster that followed.

Shaun van Eck was charged for gross insubordination for loaning money to local businesses (e.g. Lightley's House Boats) yet the hypocrisy of the Board is evident by the fact that they were aware of several previous loans (complicit because it had to have had their approval). They deliberately failed to supply this fact to the media. Only when they believed that the latest round of loans wasn't to be returned, did they complain. Deseré Barnard, the Chairperson of the ex-CEO's Disciplinary Hearing, stated: "I have already dealt with the fact that the majority of funding for KT constitutes public funding. There is simply no basis for Shaun to assume that he would have the authority to extend credit on behalf of this organization." By the same token, why has the Board not being disciplined?

What is the status of the twinning plan with France and Jamaica? Knysna Tourism can't be oblivious to the Municipality's actions regards France when something so clearly impacts on tourism.

How well does Knysna Tourism understand it's market? What statistics do they work with e.g. how many holiday homes, B&B's, self-catering options are there in Knysna? How many are for sale or unoccupied during the holiday season? How many accommodation establishments have closed down since 2010? How many have opened? How many accommodation queries have been received through Tourism since 2009 and what is the breakdown in referrals?

You, Alan Winde, and Helen Zille, both stated that i'd been helped when in fact i hadn't been. Either you lied or you were lied to. If the latter, who lied to you and state what follow-up action will be taken against them.

It is illegal for Ward Committees to not accept a complaint. With regards Ward 10, which is comprised of DA members (fundraisers and politician), what action, in the spirit of democracy, will be taken against them for refusal to do so.

Is there any truth to the rumours that Knysna Tourism's grant-in-aid is to continue to be reduced?

Is there any truth to the rumours that Knysna Tourism is to either be eventually closed or that it's current format will be altered e.g. Alan Winde's alleged plan to centralise all tourism in the Western Cape so that they're answerable to an office possibly based in Cape Town?

Is Alan Winde to remain MEC of Tourism after the upcoming General Elections? If not, who will replace him and will co-operation be continuous as opposed to this process of questioning starting again?

Is it in the best interests of Knysna for the Marketing Manager (Johan van Schalkwyk) to state that only national creative agencies would be used and not local agencies?

Why did the DA Corruption and DA-led Eden Corruption hotlines not respond to my complaints?

KNYSNA TOURISM INFO REQUEST

A:

Knysna Tourism Corporate Governance code of practice and conduct.

All SLA documents between Tourism and the Municipality (including the current draft).

Grant-in-aid figures (monies received from Knysna Municipality from Feb 2000 to Feb 2013).

B:

The consultant contract with Greg Vogt and Conservation Global.

Amounts paid to Greg Vogt and Conservation Global.

Agreements/contracts with all Board Members (including those who had no voting rights).

C:

All emailed correspondence between Greg Vogt and Public Protector Bruce Wessels.

D: Corporate Governance states that "the Company Act requires the appointment of independent auditors for the company. Their primary role is to report on whether the financial statements truly reflect the true state of business... Directors are responsible for ensuring that accounting records are kept."

Monthly financial breakdowns for 2009-2014.

Service provider agreements from 2009-2014.

Proof of tenders and quotes submitted from 2009-2014.

Service provider list, tenders, contracts and exactly what amounts they received (and for what!!!).

Expenditure detail for Judah Square (2009-2013).

Tourism Development Initiatives breakdown with monies spent for Feb 2000 to Feb 2013.

Tenders submitted for the auditor's position (for Basil Michaelides and his replacement).

Contract with the auditors (for Basil Michaelides and his replacement).

Resignation letter from Basil Michaelides and the company his now works for, Grant Thornton SA.

E:

Expenditure detail for Glendyrr Fick's Jamaica trip (ex-CEO's Disciplinary Chairperson said, "It is difficult to understand how [the ex-CEO] could make a decision to send an employee on an expensive trip to Jamaica even if [he] believed that the experience gained by the employee would be to the benefit of KT).

All 2012 communication with and by Glendyrr Fick regarding her Jamaica trip (motivation letter etc.).

The twinning agreement between Judah Square and the Rastafari Indigenous Village in Montego Bay.

All meeting minutes and correspondence with Judah Square regards the twinning before and after Glendyrr Fick's trip.

All correspondence (emails, minutes etc.) regarding Knysna's sister city program with France.

Total amount spent per year on Development, as a figure and as a percentage of the grant-in-aid.

The amount spent on each development project (and with a description of the project).

F:

It appears that 355 members have left Knysna Tourism members. How many are there currently?

How many Tourism members have been lost and gained for each year since 2009?

Provide proof via membership letters and emails that Knysna Tourism consulted, or explained to, it's members that its constitution had been altered and that Greg Vogt was being paid as a consultant.

A list of all Knysna Tourism Board meetings and the subsequent minutes from 2009-2014 unless a lessor time period specified. This should include but not be exclusive to:

F:

Audit & Finance and Governance sub-committee minutes and reports.

Minutes of Executive Committee (EXCO) meetings.

2010 Knysna Tourism AGM Minutes (Mike Mills).

2011 Knysna Tourism AGM Minutes (Clive Battell).

Knysna Tourism Board Review & Office Report 2011.

Knysna Tourism Board Review & Office Report 2012.

G:

Monthly reports submitted to Knysna Municipality.

Municipal Financial Committee meeting minutes and emails regarding Knysna Tourism.

Knysna Municipality Oversight Report 2011-2012.

Auditor's report May 16 2013.

Financial Committee meeting minutes 2009-2012.

Names and contact details for each accountant who worked for Knysna Tourism since 2009.

H:

The full investigation by the Board of Directors into Shaun van Eck.

The independent investigation into Shaun van Eck (as referred to by Greg Vogt in the Knysna Tourism Board Review & Office Report 2013: ""Independent investigation has highlighted the fact that the previous CEO [Shaun van Eck] had conducted himself in a similar manner in his previous position and had we known those details i do not think Knysna Tourism would have employed the previous CEO."

Board Room minutes involving Shaun van Eck and the Knysna Tourism Board (including the Finance and Governing sub-committees).

Minutes of Pre-Disciplinary Hearing Meeting between Tourism Board and van Eck (11 Oct 2012)

Minutes of Disciplinary Hearing Meeting between Tourism Board and van Eck (11 Oct 2012)

Shaun van Eck Evaluations and Findings

Agreement between the Knysna Tourism Board and Shaun van Eck that precipitated the latter's departure from his post as CEO.

All communication between Greg Vogt and Dirk Joubert (consultant).

All correspondence from Ian Perryman (ex-Board Chairman), Mike Mills (ex-Board Chairman) and Clive Bartell (ex-Board Chairman) involving Shaun van Eck and the alleged mismanagement of Knysna Tourism.

I:

Oyster Festival financials from 2008-2013 with a breakdown of who received each amount.

Oyster Festival service provider agreements and proof of tenders and quotes submitted from 2008-2013.

Breakdown of charity fundraising - breakdown of how they are raised (events, stalls etc.), distributed and followed up on to ensure spent correctly (2009-2013).

The amount of money (excluding charity monies), per year (2009-13) that has been spent on development of disadvantaged communities and the Local Loerie program.

The percentage, per year (2009-2013) that the above amounts are of the total of monies received by the Knysna Oyster Festival.

Worldsport contract with Nicci Rousseau-Schmidt of Knysna PR.

Knysna Tourism contracts (current and previous when she was also PR for Knysna Tourism) with Nicci Rousseau-Schmidt of Knysna PR, breakdown of monies she received for her PR service as well as any other monies received e.g. Knysna Oyster Festival.

Let's love Knysna, address these issues, and move forward positively.

Thank you.

Mike Hampton
Knysna, the Prettiest Town in South Africa
Our Facebook - facebook.com/loveknysna
Subscribe to Love Knysna! - loveknysna.com
Knysna Crime Watch - knysnacrimewatch.co.za
School News and Directory - knysnaschools.co.za
One Knysna, Our Knysna - loveknysnaprojects.co.za
Knysna Website Design - knysnawebsitedesign.co.za
Local Politics, News & Social Issues - knysnakeep.org
Home of the Knysna's Rastafarians - judahsquare.co.za
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