Home News Interdict over SMME funding withdrawn

Interdict over SMME funding withdrawn


The funds are being sourced from the Northern Cape Economic Growth and Development Fund

Richard Motlalentwa Lesoane

AN URGENT interdict was withdrawn from the Northern Cape High Court roll yesterday, in a David vs Goliath battle where the marketing manager of Ecstacy Communications is attempting to interdict the Northern Cape Economic Growth and Development Fund (EGDF) from paying out any funds to up-and-coming businesses.

The company wants to apply for a court order for the establishment of an arbitration of the EGDF and wants the acting head of the Department of Economic Development as well as the CEO of the Frances Baard SMME Trust to disclose all information relating to which beneficiaries were selected as well as how companies were shortlisted and approved.

The Northern Cape SMME Trust was appointed by the Department of Economic Development and Tourism as a service provider to collect business plans from small businesses in all five district municipalities to be selected as beneficiaries.

The funds are being sourced from the Northern Cape Economic Growth and Development Fund.

Ecstacy Communications was shortlisted by the panel for an interview for funding in October last year and in its court application it indicated that it had not received any feedback, despite attempting to obtain information through the Promotion of Access to Information Act.

The department had stated that the process had not been finalised yet while the Frances Baard SMME Trust had requested an extension until March 15, but had not replied by the deadline.

Ecstacy Communications marketing manager, Richard Motlalentwa Lesoane, stated that the department had meanwhile on March 13 invited SMMEs to apply for funding for the 2018/19 financial year while the 2017/18 applications had not been finalised.

“As a company we find this attitude deplorable and undermining of the rule of law.”

Lesoane, who chose to represent himself in court, explained that he did not have the resources or the “financial muscle” to appoint legal counsel.

“Due to financial constraints as a marketing manager, I took it upon myself as a lay person to seek recourse from this honourable court based on injustice. I will try my utmost to fight against a department with unlimited resources and an acting accounting officer. It is not an easy matter, it takes guts and courage to fight an institution with limited resources.”

Lesoane requested that the matter be postponed if the court deemed it necessary for him to have legal representation.

“I will try to source the funds to appoint an attorney.”

Lesoane indicated that both the department and the SMME Trust were in possession of the letters that he wished to hand over as evidence, which he had handed over to the CEO of the Frances Baard SMME Trust on March 7.

Northern Cape High Court Judge Bulelwa Pakati was concerned about whether Lesoane would be able to handle the matter on his own without any legal representation.

“We can all see that the papers have not been drafted by a legally qualified person.”

She prevented him from handing over the letters as evidence. “The letters should have been included in the main application so that the legal representatives have copies.”

Cost implications

Judge Pakati also reminded Lesoane that there were cost implications for the legal representatives who had “dropped everything” for the urgent application.

State attorney Fhatuwani Dakalo Ramavhale, appearing on behalf of the acting HOD, pointed out that the manner in which the papers were drafted did not provide the basis for an urgent application.

Legal representative for the CEO of the Frances Baard SMME Trust, advocate Diederick Jankowitz, stated that a person could not represent his own company in court.

He advised that the information sought could have been obtained, without approaching the court, through the Promotion of Access to Information Act or by approaching the institution.

“The nature of the application is not clear. The applicant cannot waste the court’s time by asking for a postponement, it doesn’t make sense.

“He could also approach the legal aid board for assistance if he does not have the financial means of appointing his own legal representative. A lack of finances cannot be the reason to waste the court’s time.”

Jankowitz advised that the matter be dismissed with costs.

“If the matter is postponed it will not take the application any further and the application cannot be brought again before court.”

After “extensive discussions”, Lesoane agreed to temporarily withdraw the matter and pay the legal costs of the CEO of the Frances Baard SMME Trust.

“I have amicably agreed with the State attorney to take responsibility for our own costs.”

Judge Pakati advised Lesoane that once he could present the court with properly drafted papers, he could put the matter back on the roll.

“A legal representative will be able to assist in bringing the matter to court on an urgent basis and to prepare the matter properly. I have not withdrawn the matter based on the merits of the case but to allow you to get legal advice.”

Meanwhile, the MEC for Finance, Economic Development and Tourism, Mac Jack, this month commissioned a special audit of the EGDF for the 2017/18 financial year, after receiving several complaints from interested and affected parties concerning alleged maladministration, corruption and favouritism.

The allegations range from irregular expenditure incurred through transfers and allocations from the fund, financial misconduct as well as the abuse of processes.

In some instances money was allocated to beneficiaries who had never applied while no real reasons were given to others who were excluded.

A R3 million payout was approved for the Northern Cape Youth Chamber that is considered to be dysfunctional.

In reaction to the report into the special audit, concern was expressed by the head of ministry, Darius Babuseng, that the investigation had not verified the application criteria or what steps were used to shortlist and select the beneficiaries.