EXCLUSIVE: Bosasa CEO Gavin Watson paid a R5m 'bonus' amid job losses

2019-03-12 11:20

Two weeks before corruption-accused African Global Operations (AGO) - formerly known as Bosasa - was placed under liquidation, the company paid its CEO Gavin Watson a R5m "performance bonus" - over and above his monthly salary of R5.7m.

AGO's board placed the company under voluntary liquidation on February 12.

In a supplementary affidavit provisional liquidator Cloete Murray reveals that the board took a decision to pay Watson the bonus of R10m on January 21, 2019.

He was paid the R5m, over and above his usual remuneration, on January 30, 2019.

WATCH: Gavin Watson belittles Bosasa staff, talks of his tender 'networks'

AGO's 4 500 employees are now facing possible unemployment as the allegations of corruption against Watson and his co-directors directly led to the company's accounts being closed by its banks.

Watson read but did not respond to texts sent on Tuesday seeking his comment on the matter.  

Three family members added to payroll

Murray's affidavit was filed in respect of proceedings that are under way in the South Gauteng High Court in Johannesburg. AGO's directors filed an urgent application on March 4 to try and reverse the liquidation.

Murray is opposing the application, arguing that the directors, including Watson and AGO chairperson Joe Gumede, no longer want him as a liquidator because he is investigating their affairs.

Watson, Murray further reveals, added three of his family members and alleged long-time girlfriend Lindie Gouws to the payroll of AGO, and they were paid unknown amounts ostensibly as "salaries".

"The distinct impression is created that the appointment of [Murray] was not anticipated by the actual protagonists behind the subject companies and that manifestly, due to the fact that he has directed a magnifying glass to their affairs, he is considered to have overstayed his welcome," the affidavit reads.

Murray, in a 107-page liquidator's report, also points out why the companies are indeed insolvent.

Due to the cancellation of the company's banking facilities by FNB and ABSA, Murray argues the "inescapable conclusion" is that the companies under the AGO banner have no prospect of being commercially revived.

Independence of provisional liquidator questioned

Both banks decided to sever their relationship with AGO and its various subsidiaries following two weeks of explosive testimony before the state capture inquiry by Angelo Agrizzi, the former chief operations officer of AGO.

Agrizzi revealed how, led by Watson, the company paid millions of rands in cash bribes to various government officials and political leaders in exchange for securing multibillion-rand contracts from a number of state departments.

MUST READ: Bosasa goes bust as state capture inquiry lifts lid on bribery, corruption

Murray argues in his report to the court that it is for this very reason that any attempt to remove him should be viewed in a serious light.

He also included references to a letter Agrizzi wrote to the Master of the court which questioned the independence of his fellow provisional liquidator, Ralph Lutchman, who was appointed based on a number of requisitions signed by AGO chair Gumede.

Lutchman told News24 his appointment was also supported by requisitions signed by roughly 200 employees of Bosasa as well as five unions who represent roughly 700 workers. 

Agrizzi raised concerns in his letter over whether Lutchman will do the job of a liquidator properly, considering he was appointed by the same individuals he would have to investigate.

"There are sinister aspects in the management of the companies' affairs which ought to lead one to the conclusion that liquidation proceedings are in fact required under the prevailing circumstances," Murray argues.

According to his report, AGO made a gross profit of R266m for the financial year ended February 2017.

Since the allegations by Agrizzi, AGO's main revenue stream - two contracts with the department of correctional services - has been cut off.

Department of Correctional Services officials confirmed to Murray that there is no possibly of the contracts being revived.

The matter continues in court on Tuesday.

Update: The application was scheduled to be heard on Tuesday, but was postponed until Wednesday morning. 

*This article was updated to accurately reflect that it was Mr Agrizzi who questioned Mr Lutchman's independence. In court papers, Mr Murray simply refers to a letter written by Mr Agrizzi.

Read more on:    bosasa  |  gavin watson  |  angelo agrizzi  |  state capture  |  corruption

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