A bitter legal battle is waging between the head of a forum that claims to represent 4 000 small and medium-sized business owners and leading entrepreneurial specialist and former CEO of Proudly SA, Martin Feinstein, who claims the forum owes R160 000 to small suppliers he helped source for him.
Feinstein, managing director of the Business Place, Investec’s small business support organisation, has since May last year been seeking payment for work his close corporation Traction subcontracted to three small suppliers on behalf of Tebogo Khaas, the president of the Small, Medium and Micro Enterprises (SMME) Forum.
The small suppliers printed fliers and marketing material and arranged publicity for the inaugural Small Business Excellence Initiative, a conference and awards ceremony hosted by the SMME Forum and held on July 23 and 24 last year.
On February 21 the Johannesburg High Court granted a writ of execution against Khaas’s company Corporate SA, which is contracted to do work for the forum, in respect to R158 657,79 owing to Traction. This follows a judgement handed down by the court in January. The court handed down the writ of execution in Khaas’s absence after he failed to turn up.
Feinstein said he had tried “about 20 times” to make contact with Khaas to reach an agreement to settle the monies and said he even approached “high-up government dignitaries” in an attempt to engage with Khaas, but with no success.
The sheriff of the court has been unable to trace him and attach his assets as he vacated his offices suddenly in August last year and also moved house, without telling anyone where he was moving to. Two debt tracing agents and two attorneys on behalf of some of the unpaid businesses have also not been able to locate him.
In an application on September 26 to rescind the judgement order, Khaas denied the existence of any agreement between Traction and himself.
In his application he stated that when the summons were served he was in the middle of divorce proceedings against his wife, who was also his business partner at the time and that this had plunged him into financial “disarray”.
Khaas also argued that the first time he “became aware” of the judgement against him was in September.
On April 21 he received an email from the Industrial Development Corporation’s (IDC) Kefilwe Moreriane, who was employed at the time in the organisation’s marketing department, in which Moreriane informed him of Feinstein’s email to the IDC as well as the judgement he had obtained on Khaas for the outstanding R160 000.
However, in his application claims, Khaas says he contacted Feinstein for a copy of the judgement and that he neglected to send it to him. Feinstein denies ever being contacted by Khaas for a copy of the judgement.
Earlier this year Feinstein alerted both Old Mutual and the IDC of the outstanding monies that Khaas owed to various small businesses.
At the time Khaas had approached the two organisations in the hope of securing sponsorship for the second Small Business Excellence Initiative awards.
In his application to rescind the judgement, Khaas said he was forced to postpone this year’s awards, which were due to be held on October 30 this year at the Thaba Ya Batswana Conference Lodge in Johannesburg, as a result of Feinstein’s “interferences” after Old Mutual declined to sponsor the event and the IDC reduced it’s sponsorship allocation.
Sisa Mbuli, the IDC’s head of marketing, told the Mail & Guardian that no sponsorship agreement had yet been signed between the organisation and Khaas, but that the IDC had decided it would only commit R100 000 to Khaas’s event down from his original request of R300 000 in sponsorship.
In October Khaas took Feinstein to court in an attempt to restrain him from speaking to Old Mutual after he informed the insurance giant’s Tim Cunning that he intended to apply for a garnishee order.
Cunning, managing director of Old Mutual’s corporate segment, said the insurance company had become concerned when Khaas asked that amounts be paid directly to Corporate SA.
“We don’t pay money to events companies. We pay money to associations,” explained Cunning, who said Old Mutual’s practice was to make sponsorship payments directly to an association and not to any other entity, even if that entity was subcontracted to the association.
Khaas, a former executive chairperson of IT company Digital IQ, is an oft-quoted source on small business in several business publications. He is also a signatory on behalf of the SMME Forum and the ICT Black Economic Empowerment Charter.
He claims the forum has 4 000 members, but despite several attempts by email and phone to obtain names of his members by at least two journalists, including this one, he has not been able to supply a single name.
He has formerly reported to this journalist that 60% of his members are small ICT firms and that 90% are black-owned enterprises.
The forum’s website www.smmeforum.org.za remains unpopulated, with only menu bars but blank spaces where text should be.
The forum lobbies government on issues that affect small business, such as government’s slow payment of small enterprises. Members get free internet connectivity through a deal with internet service provider DataPro.
Khaas could not be reached for comment despite several attempts, including contacting his attorney Dennis Sibuyi at Bowman Gilfillan.
This article appeared in Mail & Guardian on 5 December 2008: http://mg.co.za/article/2008-12-08-questions-for-smme-forum.
Stephen Timm is a