Former Eastern Cape Development Corporation boss Reggie Naidoo received a discount on his R125 000 ECDC debt, courtesy of the ECDC board.
Naidoo was asked to resign as acting chief executive in November after the Daily Dispatch exposed the loan scandal in which he owed R124 530, including interest, incurred over a decade.
The newspaper also revealed Naidoo was one of more than 300 beneficiaries of a massive write-off of debt ofR112-million in 2012, whenhe joined the ECDC board.
Yesterday, the ECDC confirmed its board had resolved that Naidoo, who signed suretyship for his firm, African Integrated Treasury Solutions (AITS), for loans of R700 000 in 2003, would pay half the outstanding amount.
New ECDC acting chief executive Ndzondelelo Dlulane cited an internal proposal dating back to 2005 which recommended that AITS pay half his debt.
However, internal correspondence by chief financial officer Nelisia van Dyk and seen by the Dispatch, highlighted that top executives never signed the 2005 proposal.
Since then, Naidoo did not respond to text messages and letters of demand while AITS was untraceable at the Chislehurst address Naidoo gave.
Sources, who spoke on condition of anonymity, described Naidoo’s discount as a breach of corporate governance laws.
Naidoo came into the ECDC as a board member but failed to declare or settle his loan.
“[Naidoo] was not prepared to pay half. He argued with the board wanted to pay R2 000, saying he was not liable for the debt as AITS was a separate legal entity,” a source said.
“It is quite scandalous the board gave him such a huge discount.”
Naidoo asked that written questions be sent but did not respond by the time of writing.
The source said Naidoo’s discount was “tantamount to giving their own a financial benefit”, which was against the Companies Act. “This is the guy who boasted that he makes millions a day.
“Yet, other people whose businesses have gone under will be expected to pay.”
Naidoo was most recently an former officio ECDC board member, by virtue of being acting chief executive.
Another source, who alleged the R62 000 was deducted from Naidoo’s salary in December, said the discount could create a new set of problems between the ECDC and its debtors.
“In a way, Naidoo and the board finally admitted he owed the ECDC. The board gave preferential treatment its own.
“Will they give other people who are in arrears similar treatment?” the source said.
Dlulane confirmed the ECDC had agreed to let Naidoo pay R62 000 after an internal investigation into the loan found that in 2005 AITS owed R62 000.
– Siya Miti