The wealthy Bakgatla Ba Kgafela Traditional Council (BBKTC) risks losing control of its entire empire, worth hundreds of millions of rands.
This could happen if the judicial commission of inquiry probing its affairs decides to follow the recommendations contained in a report written by an independent forensic expert.
The report’s author is chartered accountant George Papadakis. He says that the BBKTC and its subsidiaries should be placed under administration and that criminal charges should be considered against some of the custodians of the entities.
“The basis upon which the financial information of the BBKTC has been presented warrants a reasonable conclusion that the financial affairs of BBKTC have been conducted in a reckless manner,” reads one of the conclusions contained in the document.
Papadakis writes that representations contained in management reports had been made with “complete disregard” of their veracity.
The report details how a large web of companies, most of them wholly owned by the BBKTC, were mismanaged over a number of years.
Various management reports and unsigned financial statements show that the BBKTC had 11 sources of income over the eight years ending 2013, and that they earned a total of R929 million.
Papadakis mentions loans being made to one of the directors without there being any evidence of repayment, reckless loans being made to related entities and discrepancies between management reports and annual financial reports for most of the council’s subsidiary companies.
By the end of 2015, outside the holding group, BBKTC owned R154 million in shares in six other companies, including free-to-air television company Siyaya.
North West Premier Supra Mahumapelo established the commission of inquiry into the traditional leadership disputes in respect of the Bakgatla Ba Kgafela community in 2016.
It was chaired by Judge George Maluleke, until his death in August 2017. Advocate Sesi Baloyi then took over from him.
Another company that raised the commission’s eyebrows when the report was presented, was BBK Financial Services. It was offering financial services, allegedly under another company’s licence, but was not registered with the Financial Services Board (FSB).
According to the Financial Advisory and Intermediary Services (Fais) Act, this amounts to an offence under section 36, offences and penalties, reads the report.
Jabhile Mbele, FSB head of Fais registration, told City Press that the company was not listed on their system.
Questions sent to Kgosi Nyalala Pilane went unanswered. BBKTC spokesperson Nonnie Letsholo said it was too early to comment.
“We are unable to respond to your questions as the matter is before the commission, which has not yet made its findings. Once the commission is concluded it will consider representations from all stakeholders. It will therefore be premature to make any comments at this stage.”
The commission received another report last week, from auditors SizweNtsalubaGobodo, which confirmed a number of matters contained in the Papadakis report.
This document, compiled by the company’s Itumeleng Serithi, details how a temporary pass-through account held by Johannesburg-based law firm Cliffe Dekker Hofmeyr, received more than R1.5 billion in deposits, including from three major transactions. However, it was then drained of funds until it was left with a balance of R60.
“BBKTC have not accounted for the majority of transactions processed from the escrow account,” Serithi states in his report.
The commission is sitting in Rustenburg and is expected to conclude its work at the end of this month.
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