The letter indicated that the trade fair was the brainchild of Mpitsang, who approached the department in June for sponsorship
A PUBLIC and trade relations, marketing and communications company, Optirel8, which was contracted to co-host the Agro-Processing Investment and Trade Fair, intends taking legal action against the Northern Cape Department of Agriculture, Land Reform and Rural Development in a R5 million to R8 million lawsuit.
The two-day trade fair, which was scheduled to take place at the Mittah Seperepere Convention Centre in Kimberley from tomorrow, was cancelled on Monday due to a “legal dispute with the organising partner”.
The spokesperson for the Office of the MEC, Ali Diteme, in a statement, apologised for “any inconvenience that this may have caused”.
In a lawyer’s letter that was sent to the department last week on behalf of Optirel8, it was indicated that should the matter not be resolved amicably it would be escalated to the law enforcement agencies, chapter nine institutions, the Office of the Public Protector as well as the commission into state capture.
It pointed out that the agreement entered into was cancelled on November 2, when the director of Optirel8, Brenda Mpitsang, enquired about the development of the trade fair.
“To her surprise, the letter was addressed to her from Nieuwoudtville Rooibos (Pty) Ltd. It also came to our client’s attention that the registered directors of the company are persons occupying high positions at the department. It is our instruction to enquire from the department as to the involvement of Nieuwoudtville Rooibos (Pty) Ltd.”
The letter indicated that the trade fair was the brainchild of Mpitsang, who approached the department in June for sponsorship,
“The department bought into the idea and the MEC of the department, Norman Shushu, advised her that he would approach Cabinet for approval. Our client received a letter from the MEC on June 19 that the Ministry and the Department of Agriculture, Land Reform and Rural Development endorsed the partnership with the director of Optirel8 (Pty) Ltd to host the agriculture and investment conference.”
The attorneys added that the chief financial officer (CFO) had on September 11 opened a joint private bank account with Mpitsang, for the implementation of funding for the event.
The trade fair was supposed to provide a platform for investment opportunities for farmers, promote beneficiation, job creation and create sustainable investment partnerships both locally and internationally.
A list of 39 potential sponsors and partners were also provided including banks, agricultural chambers and co-operatives, various universities, state parastatals including Eskom, SAA and Transnet, hotels, private businesses and Anglo American Platinum.
The Nieuwoudtville Rooibos website advertises the trade fair and sponsors are invited to deposit funds into the joint bank account.
The cost for local delegates was R1 800 and international conference delegates would pay R3 500 each. The options for sponsors ranged from Platinum sponsors, who would donate R500 000, Black Gold sponsors, who were expected to donate R250 000 for the welcoming breakfast and beverages, Bronze sponsors, who would donate R50 000 for co-branding purposes, and Brown sponsors, who would donate R15 000 for the exhibitions.
Sponsors for the gala dinner, which would have been held tomorrow night, would donate R125 000, while Blue sponsors were liable for R25 000, Green sponsors would pay R20 000 towards programme adverts and those sponsoring tea and lunch would donate R75 000.
White Gold sponsors would donate R100 000 for the thematic and side events sponsorship.
Meanwhile on the department’s Facebook page exhibitors were advised that they could hire stalls at a cost of R500 per square metre, where refunds were “inadmissible”.
The bank account details provided for booking stalls, indicated as Nieuwoudtville (Pty) Ltd, differs to the joint bank account opened by the CFO and the director of Optirel8.
Exhibitors were instructed to e-mail proof of payment to an official at the Department of Agriculture and Land Reform.
Mpitsang stated that upon enquiry, she was informed that Nieuwoudtville Rooibos (Pty) Ltd was “100 percent owned by the Department of Agriculture and Land Reform”.
“A service level agreement was drawn up between Nieuwoudtville Rooibos (Pty) Ltd and Optirel8, which I refused to sign. A second agreement was then compiled between the Department of Agriculture, Land Reform and Rural Development represented by Nieuwoudtville Rooibos (Pty) Ltd and Optirel8.”
The address supplied on the one service level agreement is listed as the Department of Agriculture, Land Reform and Rural Development in Kimberley.
The address in the second contract is listed as the Nieuwoudtville Rooibos (Pty) Ltd Factory in Nieuwoudtville, while the address of the Nieuwoudtville Rooibos private company, which is registered on the Companies and Intellectual Property Commission, states that the address is 19 Hoop Street, Calvinia.
Mpitsang added that she was made to sign a profit sharing agreement where she would receive 60 percent in respect of a management fee and 40 percent of the income generated would be paid over to Nieuwoudtville Rooibos Factory.
Rooibos Factory had committed to pay R170 000 as the management fee to the service provider.
In terms of the agreement, the department would provide the necessary authority, support and resources.
The CFO at the department was appointed as the Rooibos Factory liaison officer.
The department would claim a 60 percent management fee that would be paid over to the service provider to “correct defects or corrections to the work the supplier was supposed to perform”.
The department would withhold 60 percent of the remainder of the income generated from sponsors and registration fees after all expenses for the event were paid.
Mpitsang stated that she was aware of 300 delegates who had expressed an interest and had paid their registration fees to attend the trade fair.
“I already sent out invites to the minister of Rural Development and Land Reform, the premier and the MEC for the Department of Agriculture, Rural Development and Land Reform, as well as dignitaries from Botswana, Zimbabwe, the Department of Trade and Industry and BRICS ambassadors.”
She indicated that the reason provided for the cancellation of her contract was that “not enough sponsors had been sourced”.
“I approached sponsors for donations but have no record of how much was paid over as I cannot access the bank account without the CFO. I have no knowledge as to into which bank account the registration fees were deposited.”
Mpitsang added that she was to be held personally liable for any risks, damages or claims against the factory.
“I had no input in the appointment of service providers, such as the marquee tent hire, to ensure health and safety compliance. In the event of injury I would be held responsible. The venue and caterers were paid for by the department.”
Mpitsang indicated that she had turned down the offer on Friday to continue with the event and was currently in discussion with her lawyers. “The R250 000 that I received in respect of the management fee is considered to be more of a sponsorship.”