Firm in BEE fronting rip-off

A top Gauteng industrial cleaning company has scored tenders worth hundreds of millions of rand from government departments by fronting its black employees as directors. The Star’s investigation found that black employees of Zevoli Industrial Supplies hold a stake of between 10 and 60 percent in the company, but none of them know the value of their shares. Neither Zevoli’s black directors nor its shareholders have any signing powers or access to the company’s records, including financial statements. Zevoli, which is owned by Danie Scholtz, has a triple BEE rating of 70 percent black ownership and 60 percent black management, according to documents that The Star has seen. One of the alleged fronted employees is Refilwe Patricia Mohlobane, 25, whose directorship status is currently shown as “active” on the Companies and Intellectual Property Commission database, last updated in March.

Her name is listed above the names of other active directors, including Scholtz and his wife Suzanne. Mohlobane’s brother, Lazarus Swarts, is among the four black employees whose directorship status is shown as “resigned”. The Star traced Mohlobane to her home in Tumahole township in Parys in the Free State, where she lives in an RDP house that belongs to her mother, Selina Swarts, 56. Patricia wasn’t at home. When she was contacted by phone, she refused to speak. Her mother was shocked when she was told about her daughter’s shares. “I often see a tag on her clothes written ‘director’. When I ask her, she says she doesn’t know anything about it. She doesn’t even know the money she has from the shares,” Selina added. Mohlobane doesn’t have a house or car of her own or medical aid. She is often heavily in debt.

South African Revenue Service officials visited Zevoli’s offices early last month and questioned the employees about back taxes owed by the company. Patricia was questioned about the status of her shareholding after she couldn’t give an explanation about the tax. Scholtz allegedly fronted about nine black employees between 2007 and 2012, including his domestic worker, who works at his house in Sunward Park, Boksburg. Her name is known to The Star but is being withheld for legal reasons. Zevoli won multiple tenders largely on the basis of its BBBEE credentials from the SAPS, SANDF and the departments of Correctional Services and Home Affairs. It also has contracts with Eskom, Rand Airport and ArcelorMittal. Johannesburg Water has also sourced goods from Zevoli.

The company specialises in industrial cleaning, and supplies goods and services such as cleaning materials and electrical equipment. It also renders services such as catering, fixing toilets and supplying of toilet air fresheners. Highly placed sources estimated the value of the contracts at more than R300m, but The Star couldn’t verify this independently. In 2012, the ANC awarded Zevoli a “certificate of appreciation” for participating in the party’s Progressive Business Forum. The certificate was signed by ANC secretary-general Gwede Mantashe and treasurer Zweli Mkhize. Scholtz admitted that some of the employees – including his domestic worker – owned shares, but said they had resigned. “All these people resigned because they got other things to do,” he said, denying allegations of fronting. “It’s bulls**t. I never front,” he said.

The Star has seen a letter dated May 22, 2015 addressed to Lazarus in which Scholtz gives him “a full and final offer to purchase back the shares” he holds in Zevoli. “R200 000 (only) to be paid to Mr LT Swarts to purchase back the shares held by you as a shareholder at Zevoli Industrial Supplies.” Lazarus has refused the offer.