It took only a week in May 2018 to move hundreds of millions of rands in public monies from South Africa’s Unemployment Insurance Fund to an array of offshore entities incorporated in places like Malta and the British Virgin Islands.
What makes this particularly troubling is the fact that Bounty Brands’ founding shareholder — and the largest beneficiary of the dividend — later defaulted on these very debts, triggering a crisis that eventually torpedoed the UIF’s investment. This left several creditors wondering why some of the UIF’s investment hadn’t been used to settle their debts.
However, he chose not to answer several detailed queries regarding the complex series of transactions that effectively converted a portion of the UIF investment into a dividend for Bounty’s shareholders. Von Holdt, Botha and Crispian Dillon, Shayne’s co-founder in Coast2Coast, have all seemingly gone to ground.tried to phone the trio for comment, but they didn’t answer our calls. They also appeared to have read requests for comment sent on WhatsApp, but failed to respond.
The decision to pay the dividend with monies that stemmed from the UIF’s investment warrants serious scrutiny in light of Bounty Brands’ and Coast2Coast’s huge debt load., this debt load sparked a crisis when Coast2Coast Capital and its associated entities defaulted on certain liabilities.The defaults nearly sank the entire group and required a drastic restructuring that ultimately rendered the UIF’s investment next to worthless.
However, as this investigation will demonstrate, Shayne’s broad denials fail to address vital aspects concerning Shepstone Capital’s usage of the UIF’s money. Included in this collection of businesses were well-known brands like Tuffy homeware products and popular apparel labels like Vans, Diesel and Hurley.
Greg von Holdt and Lawrence Mulaudzi, the PIC dealmaker who brought the UIF’s R1.37-billion investment to Coast2Coast. It was from BBH that the group’s shareholders in May 2018 received dividend payments totalling about R580-million, largely bankrolled with the R530-million that came from the UIF investment.
The buy-back deal was concluded before K659 received the UIF’s money, so the outstanding monies owed to Brainspan sat in K659’s books as a loan. The value of Brainspan’s 15% stake in K659 had therefore effectively grown from just R2,250 in 2015 to a staggering R430-million in 2018. But there is a key consideration one has to keep in mind regarding the value of Brainspan’s stake and the R430-million in UIF funds K659 forked out to buy back those shares.
Meanwhile, Brainspan Ventures now sat with R430-million because it had effectively cashed in on its shares in K659, a transaction K659 had financed with the UIF investment. Using the full R430-million, along with additional funds Brainspan had received from K659 through an unrelated dividend, Brainspan forked out €32-million for a stake in Coast2Coast Communications, an entity incorporated in the British Virgin Islands .
This would have given Coast2Coast Communications a valuation of roughly €290-million, or nearly R4.3-billion, a massive figure for a rather obscure-looking entity.How was Brainspan’s €32-million investment in the BVI entity justified? Each payment in this series of transactions was treated as a “shareholder loan”, according to the documents in our possession.This string of transactions we’ve detailed up to this point may seem confusing, but the key takeaway is this:
Meanwhile, having received the €32-million on 16 May 2018, Shepstone Capital immediately utilised this entire amount to subscribe for shares in BBH .Over the years, though, the size of the stake decreased as other investors put money into the group in exchange for equity. To fully explain how this happened, we need to jump back to the period between 2015 and 2017, when Bounty Brands acquired several consumer goods businesses, or vendors, in its South African portfolio.within the broader Bounty Brands and Coast2Coast groups partly stemmed from the manner in which these deals were structured.
Exactly the same thing was done with the outstanding debts owed to four other businesses Bounty had acquired.
PLMyburgh These guys must be arrested and rot in jail for stealing from the poor. Unfortunately when smart white guys steal they always get away, they seem to hire the right legal eagles and not Dali Mpofu
PLMyburgh Great work! 👏👌
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