Solms-Delta has, since 2005, been regarded by many as a model for transformation in the increasingly contentious and bitter matter of land ownership in South Africa. Their wines have been well regarded on JancisRobinson.com. So I was shocked to read a Daily Maverick article entitled The Solms-Delta way, or, How Not to do Land Reform. It described a wine estate sinking “towards liquidation after more than R65 million of government funding and hollow trusts”. It contained some pretty spectacular accusations that left me quite troubled. I scheduled a call to Mark Solms.
Mark Solms requested that this article, first published on jancisrobinson.com, be published as a right of reply to the Daily Maverick article.
I expected guarded, jaded but well-polished rhetoric from someone who knew his spiel back to front. I thought I might get to ask a couple of questions and that they might be skilfully dodged. I put 20 minutes in my diary for the call. An hour and a half later, with 12 A4 pages filled with rapidly scrawled notes, I put the phone down.
He’d been very willing to talk. He wasn’t slick. But he sounded weary, almost defeated at times. When I raised the Daily Maverick article, there was something close to bewilderment in his voice. Disbelief. The journalist, Marianne Merten, had phoned him. At the end of their call she asked him for evidence to back up his side of the story. He sent her 11 emails and attachments, documenting conversations, agreements, minutes, memoranda and more. When the article appeared five days later on 14 August it contained all the charges he’d refuted and subsequently provided evidence against. It was as if, he said, she hadn’t read a single one of his emails. At the end of our conversation, I asked him if he would forward those same emails to me. He did.
In the interim I’ve combed through what Solms forwarded, along with dozens of other articles and documents and the notes from our interview to piece together the story. I have also contacted two of the worker representatives, their lawyer, the Minister of Rural Development and Land Reform, the Director General of Rural Development and Land Reform, and the Head of Ministerial Office. Replies have been few and far between.
In 2001, Solms moved back to his native South Africa from the UK, where he had worked, inter alia, at University College London and the Anna Freud Centre, and founded the International Neuropsychoanalysis Society. He bought an old farm outside Franschhoek with the intention of planting vines and making wine. It was post apartheid and he believed in being part of this brave new world. At the same time he felt, he told me, deeply conflicted and uneasy about being ‘another rich white landowner on a colonial farm with all its connotations of oppression’. So he decided that he would engage with the people who were already living and working on the farm to try to find a way forward that would benefit them.
This noble, altruistic-sounding aspiration turned out to be a difficult, complex process filled with unexpected obstacles (it’s worth reading the story here) but culminated in a realisation that it all boils down to ‘ownership of land and assets’. More than two centuries of racial oppression, slavery and apartheid had stripped these people of everything and now they lived, extremely vulnerable and in appalling conditions, at the mercy of wealthy people who could kick them out of their hovels and make them homeless at a moment’s notice.
Solms said that at that point he faced a massive dilemma: in order to appease his conscience he had to consider whether he should give up the farm. Instead, he decided to tackle it in a way that recognised his limitations (‘I wanted to keep my farm’). So in 2006 he persuaded his long-term friend, Englishman Richard Astor of the prominent Anglo-American Astor family, who had just bought the next-door farm, to join him in putting their farms up as collateral to secure a loan to buy a third, much larger farm called Deltameer that could sustain the local workers. A 20-ha portion of Deltameer was to form the backbone of the Wijn de Caab Trust, created for the benefit of the employees, their families and dependants living on the farm and in the local area. Responding to a question about whether the Trsut actually owned the title deeds for Deltameer, or if it was merely meant to generate income for those who lived and worked on it, Solms responded:
“When Lubeck was purchased by Richard, the seller was only willing to let go of a portion of the farm (approx 20ha). The subdivision was therefore disallowed, because the proposed farm was too small. Lubeck therefore had to be consolidated with the subsequent purchase of Deltameer; but then the subdivision of the workers’ (20ha) portion was disallowed, for the same reason. We therefore signed a binding sale agreement with the Trust, while we applied for special approval of the subdivision (on BEE – Black Economic Empowerment grounds). This subdivision was only finally approved in conjunction with the 50:50 deal. However, there was never any question between us and the workers as to who owned their farm, since there was a binding agreement between us subject only to the approval (which we were told was a formality; but I am not sure how many readers know that this [farm subdivision and transfer] process takes years).”
In 2007 Solms and Astor handed over 33.3% of the Solms-Delta business (by now a thriving wine estate with a museum devoted to the history of the site and its people, a restaurant, tours and tasting room) to the employees of Solms-Delta. By this time Solms had also built extensive high-quality housing for the workers with indoor plumbing and hot water (something they’d never had) and a satellite TV in every house. The Trust was configured according to clear guidelines, with the money spent on providing new housing, a creche and a clinic on Deltameer farm; healthcare for employees and their families; funding for secondary education, access to bursaries for tertiary education, adult education and training; and sports and recreation facilities. Through the Trust, employees were also given access to counselling, rehabilitation from the substance abuse that is endemic on so many Cape farms, and help in cases of domestic violence.
Such was the lavishness of the spending that when, for instance, they applied for planning permission for the new workers’ housing on Deltameer farm, they were originally turned down because the planning department, seeing the high quality of the houses, believed they were trying to sneak through tourist accommodation. Sussanna Malgas recalled growing up on the farm with 10 to 14 people in one house and bathing facilities outside. Her son Clint has a lung and heart condition and the Trust not only paid for all his medical care up to the age of 18, but put him through both high school and a hospitality training course.
In 2007 Solms and Astor also formed the Delta Trust, which was a separate trust for the broader local community funding projects focusing on culture and heritage through music, festivals, dance, education and sport.
In early 2016, Solms was invited on to Radio 702 to discuss what they were doing on Solms-Delta. Soon after that interview, Solms received a phone call from the Department of Rural Development and Land Reform (DRDLR). “We should be talking”, they said. The discussion centred around the government’s Strengthening the Relative Rights of People Working the Land (SRR 50:50) programme launched in 2013, which aims to give farm employees a 50% share in the farms they work on.
Solms said he was delighted. ‘The idea of sharing is better than buying land and plonking people on it, leaving them to flounder and fail.’ The government presumably viewed this as a flagship project to add lustre to SRR 50:50, one involving far less land but far more people than most of the other 20 or so projects so far sanctioned. Solms-Delta was already well known, the shared ownership had been working there for nine years, they wouldn’t have to start from scratch. For Solms and Astor it was an opportunity to be relieved of the Deltameer farm R46 million loan and its R5 million annual interest payments.
The critical problem, at that point, was that Solms-Delta was running at a loss. Staff costs were high; the company was investing hugely in benefits, salaries and training; and sales were well below what they should have been. One of the major sticking points, according to Solms, was that they were struggling to find decent export markets for their wines.
The Daily Maverick alleges that the business was “operating at a R30 m ‘loss’ per year”, but this doesn’t seem to square with the National Empowerment Fund (NEF) memorandum dated 10 July 2017 in which the accounts of the company from 1 September 2016 to 31 May 2017 show that they made a R6 million loss. Even accounting for the additional three months to year end, there is a large gap between 6 million and 30 million.
Despite these losses, a year of negotiations resulted in a deal with the DRDLR and the NEF, the government bodies behind the SSR 50:50 policy. The deal was that the beneficiaries of the Trust (the employees and inhabitants of the farm and their dependants) would get permanent tenure of 50% of the land and ownership of 50% of the business. The government would pay off the R46 million loan on the Deltameer farm, they would invest additional funds in the business to an initial amount of R65 million (£3.5 million/$4.5 million), and they would work together with the shareholders of Solms-Delta on a turn-around strategy and reconfigure the business to start making a profit.
Several steps were taken in order to make this happen:
- Richard Astor sold a portion of his farm to make 50% (50.8 ha/126 acre) of the land available for the deal.
- Mark Solms sold a portion of his shares to make 50% of the shareholding available for the deal.
The government’s initial offer was:
- R40 million to pay for 50% of the land
- R13.5 million towards a 50% share of the assets
- R11.5 million on an interest-free loan for desperately needed working capital to keep Solms-Delta on an even keel.
It’s critical to note at this point that in the initial negotiations, Solms and Astor assumed that the title deeds of the land would belong to the Wijn de Caab Trust. However, one of the fundamental tenets of the SSR 50:50 policy is that the government, not the workers, takes over ownership of the land. The official policy states that it “provides for government to acquire a stake in the farming enterprise on behalf of the workers and to purchase the land in order to provide tenure security for the farmworkers … Land will be owned by Government, either fully or partially, that is either fully or partially nationalised. Where land is owned by Government the title deed is registered to the State … Where Government owns land (even a portion), farm workers will be given a Land Use Rights Certificate which they will use to enter into the new business arrangements with the previous farm owner.” (See slides 5 and 7 of the SRR policy presentation.)
The employees (or “workers” as they are referred to throughout South Africa, even in government documents) would become tenants and pay an annual rent of 2% of the price of the land. In addition, in order to appropriately manage their investment, the NEF would be given a 5% share of the business (ensuring them a seat on the board and access to decision-making). This 5% share would be effectively ‘warehoused’ by government on behalf of the workers, and returned to them after five years, at which point the NEF trustee director would be replaced by a worker trustee director.
Solms was very unhappy that the land was not going into the Trust. His exact words to me were: ‘we screamed blue murder’. They were told that the DRDLR was not prepared to budge: this was the policy. The government would buy and own the land.
The Daily Maverick‘s accusation here is that, “Ironically, despite the talk of farmworker empowerment, transformation and rural land reform, the one thing the Solms-Delta workers never had in their grasp was the land. That land has been registered in the name of “National Government of the Republic of South Africa”, according to Deeds Office documents, since July 2016 at a R18.8-million price tag.” The article makes no mention of the fact that this is the case for every single SSR 50:50 deal that the government makes. So far the government has acquired a total of 22,123 ha (54,667 acres) of land through SRR 50:50 projects.
It’s at this point that Merten’s article in the Daily Maverick notes that ‘the numbers changed’. The final deal from the government was:
- R18.8 million to pay for 50% of the land
- R37.4 million towards a 50% share of the assets
- R11.5 million on an interest-free loan.
Merten insinuates that there was some underhand dealing: “One of the issues the parliamentary State Capture inquiry into Eskom [see here for background details to that] has shown is how documents can be tailored to suit certain outcomes. It remains pure speculation at this stage what, if anything, happened in the back rooms”.
I asked Solms how R40 million became R18.8 million. R40 million was apparently the valuation that an independent property valuer estimated for the land. The government appointed their land-valuation surveyor who made his valuation based on the most recent property sold in that area: a disused quarry. In a nutshell, the government bought land – for themselves – at less than half what it was worth. In order to make the balance up to the R65 million, the asset contribution was bumped up to R37.4 million. According to Solms, the money they received from the government to pay for the additional land (from Astor) and the additional shares (from Solms) went straight back into Solms-Delta to pay off the debts.
In August 2016 Solms-Delta and the Wijn de Caab Trust were reconfigured and the deal signed. The Solms-Delta workers were now owners of 45% of the business and lifelong tenants on state-owned land for a rent of R376,000 per annum. Their shareholding, together with 5% belonging to the NEF, 22.5% to Mark Solms, 22.5% to Richard Astor, and 5% to Craig McGillivray (CEO of Solms-Delta and minority shareholder since 2010) made up a NewCo. The official guidelines for a SRR NewCo state that, “the state of the company has to be critically analysed, so that facts on threats, risks and opportunities are well understood before ushering the business into the new era … The NewCo should not be overburdened in its formative stage – it has to succeed”.
Merten also calls into question the structure of the board of trustees. She writes: “Of the five founding trustees, only two were workers and although by January 2018 the number of trustees has increased to 10, only three are workers at the wine estate. Why would this be important? Because the core of the trustees – Solms and Craig MacGillivray, joined a year later in 2007 by Astor – are also among the directors of the central company, Solms-Delta Wine Estate (Pty Ltd), contracted to the government’s 50:50 policy project. That trustees are also directors is arguably tantamount to transacting with oneself while pretending to be two different entities. And that the same people are in the trust that is actually meant to be for the workers (45%) as well as part of the company (50%), undermines the intention of the equity shareholder structure. (The NEF holds the remaining 5% due to its financial contributions.) Why no one in either the Rural Development Department or the NEF queried that, or moved to help establish a trust truly representative of the farmworkers, remains unclear.”
I put this to Solms who explained the board make up as follows. Before the 50:50 arrangement, the board of trustees comprised Solms, Astor, an independent lawyer (a black female), the local ward councillor (a directly elected local official, black male), the mayor of the Cape Winelands (an elected official, black male), local citizens’ advice advisor (a black female), company accountant (a white male). In total, there were three white males, two black females, and two black males. There was no worker on the board of trustees, according to Solms, for the simple reason that beneficiaries of a trust are not normally trustees. Instead there was an elected committee of workers who met in three-hour monthly meetings to report and represent the requests of the beneficiaries to the Trust.
The post-50:50 board comprised Solms, Astor, the company accountant, the NEF representative and two employees. Solms and Astor represented their 45% share, the NEF represented the government’s 5% share, and the two employees represented their 45% share. There was also an alternate director, a third employee, who in rotation would attend some of the meetings and ultimately replace the NEF trustee when the 5% was transitioned back to the Trust. The structure of the board was indeed 50:50, according to Solms.
From August 2016 the directors and the NEF started to design a turnaround strategy and by January 2017 they had basic ideas in place. Their Achilles heel was the lack of a proper sales team, although there are other issues cited in different reports by the South African Government News Agency such as inefficiencies in the management of the hospitality side of the business and lacklustre wines. They needed to fund a proper marketing and sales strategy and they needed to focus on resourcing the hospitality business (museum staff are seen below). This required money.
The R65 million from the government had been spent on paying off huge debts (including the R46 million for the workers’ farm) and basic operating costs. In the original negotiations, they had identified that they needed R21 million working capital to get off their knees. The government awarded them an interest-free loan of R11.5 million. Now, more than a year down the road and with monthly losses running at between R1 million to R3 million (since this covered the high-cost harvest period), the need for investment in this turnaround strategy was becoming ever more urgent.
The NEF, after a series of engagements with the board of directors, determined that the company needed an investment of R30 million over four years in order to implement the turnaround strategy. This would be kicked off by an initial investment from the government of R7.5 million, matched by an investment of R7.5 million by Solms and Astor. The NEF report confirmed that this additional funding was approved on 6 June 2017. The report reads: “The disbursement of the Solms-Delta funds is critical for the implementation of the turnaround strategy and these funds are required as a matter of urgency. If such funds are not released by the 12th of July 2017, the business runs the risk of losing orders to the value of R1m.” In addition, the report says, :Further to this, MCM [Ministerial Coordinating Committee] approved R1.5m for the appointment of a turnaround specialist for 12 months.”
(At this juncture I can’t quite work out whether the court or the government or Merten have a problem with simple addition. Those interested in the detail should see here. )
Solms provided me with a run of emails dating from 11 May 2017 up until 22 July 2017. These track increasingly desperate calls on the Minister of Rural Development and Land Reform, Gugile Nkwinti, to release the funds approved by the MMC. An email on 12 July 2017 reads:
Dear Minister Nkwinti
As much as I hate writing to you again, I am afraid I have no choice.
I understand from George Phiri and Jabulile Masilela (NEF) that your department, at an MCM meeting on 6 June, approved funding of the 50% workers’ share of our current capital needs – an amount of R7.5m (plus R1.5m towards an independent team to oversee the turnaround plan of the business). Since then, George and Jabulile have tried repeatedly, without success, to have released into their control DRDLR funds already in the bank account of NEF for purposes of the 50/50 SRR program, so that they can implement the decision taken by the MCM. Their efforts have apparently been blocked by your department’s CFO and/or ADG.
In the absence of immediate access to (at least some of) the agreed funds, we now face the following – over the next few days:
(i) Disconnection of power, sewerage services and telephone services – impacting all families living on the farm, not just the business; (ii) Legal action from our creditors (and possible application/s for liquidation); (iii) Freezing of business operations; (iv) Loss of our key customers and a pipeline of committed orders; (v) The board being forced to apply for business rescue (if funding from a borrower for such process can be secured) or to apply for liquidation.
If you can intervene, please, I must ask you to do so by tomorrow.
Emails in this tone continue, until 18 July 2017 when Solms writes:
With reference to my email of 12th July, I am afraid we have now reached the end of the road. Please see the attached minutes of today’s board meeting, which describes the desperate situation caused by the lack of action following your 6th June MCM decision, and the opportunities tragically lost.
Our lawyers now advise that we can delay no longer; the only way we can protect Solms-Delta from its creditors (i.e., avoid liquidation and keep trading) is to enter ‘business rescue’. We are holding an emergency board meeting on Thursday morning to formally resolve this. I am aware of the enormous embarrassment this outcome will cause you and your department, especially considering the media spotlight described in my email of 2nd July; so I feel duty-bound to inform you that we have only 24 hours left to prevent this completely unnecessary outcome. Please understand that we (including George and Jabulile) have done all that we can to get your officials to act – but to no avail. If there is anything that you personally can still do, now is the time!
He received no reply. On Saturday 22 July 2017 he wrote to inform the minister that Business Rescue proceedings would commence on Monday. As they did.
On 31 July 2017 an email marked URGENT arrived from the NEF to the directors of Solms-Delta. “We received a call from the senior officials of the Department’]”, it said, “to request that the Business Rescue proceedings be reversed/withdrawn since the process of releasing funds as approved by MCM is underway.”
With clearly no understanding that business rescue, once under way, is a process that cannot be reversed, the department had dragged its heels for no discernible reason over releasing agreed and approved funding that would have saved a business supporting 250 vulnerable people.
The funding came too late. Business rescue was in place and PricewaterhouseCoopers, or PwC, appointed Alison Timme as business rescue practitioner.
The deep frustration with all of this, as is evidenced by the board meeting minutes which I have seen, is that thanks to the turnaround strategy, the business was beginning to respond. Sales were showing improvement, costs were being cut. But, critically, the money was needed to give this strategy a chance to fully develop and take wing, and it was proving impossible to resource the sales team, allocate a marketing budget, equip and resource the hospitality team to improve front of house and hold large money-spinning events such as weddings when there wasn’t enough money to pay the electricity bill and the water bill, let alone the company that provided bottles for their wine. Suppliers were instigating legal action. Key staff, starting to get nervous about their futures, were leaving. First the chef, then the front of house manager, then the winemaker. Solms-Delta were unable to pay their grape suppliers and lost key growers. They were unable to bottle and they lost orders.
Business rescue turned out to be a devastatingly painful process, sending the company into a downward spiral. Timme closed the bank accounts and a R1 million payment from an export order bounced. The staff, used to a relaxed, non-confrontational atmosphere, responded badly to her hard-headed business approach. She wasn’t interested in connecting with them: she was there to do a job and her job was to cut the fat. It didn’t go down well. The trust and good relationships so hard won began to erode in an atmosphere of tension and fear. The sales manager who’d begun to turn things around left; there was no money to retain her. Solms told me, “It badly unravelled, and fast. But you can’t blame people. I don’t blame the business practitioner. I don’t blame the workers. They were all just doing their jobs.”
It didn’t help that about this time things turned sour between Solms-Delta and the government. It started with a South African Sunday Times article, which Solms believed he had to respond to. Solms told the government that he had to tell the truth: “You didn’t release the turnaround strategy funding you’d committed to; the minister was ill [this, apparently, was the reason he’d had no response from the minister for two months]; everyone was too scared to make decisions in his absence”, he told the DRDLR. Their lawyer came back immediately (no delay in answering emails, all of a sudden) and told him he could not say that, because the newspaper would use it to blame government. “What do you suggest I say?” Solms asked. “We were finalising the turnaround strategy”, was the answer. It was not true, but Solms complied, gave government-approved answers to the Sunday Times journalist, and in the wake of the ensuing bad press, as Solms-Delta took the flack financially and morally, tension grew.
By now Solms knew his best option would be to fold the business and sue the government. But for the sake of his employees he believed he needed to persist in finding a long-term resolution. Timme, the business rescue practitioner, advised them there were only two possible plans:
Get an external investor.
Government funds a turnaround.
She found an external investor: a black businessman ‘with deep pockets’. But understandably he was nervous. He didn’t want to share his business with the government owning 50% of the land and 5% of the shares. It didn’t help that when she set up negotiation meetings with the government, the DRDLR minister and representatives didn’t bother to attend.
On 31 May 2018, without any warning, the DRDLR pulled the plug on Solms-Delta. The South African Government News Agency made an announcement on its website that ‘Government has announced its decision to cease the continued funding of the Solms Delta Wine estate project’. It was the first that Solms, Astor or any of the shareholders or the business rescue practitioner knew of this.
The press release mentioned nothing about the withholding of vital (promised and approved) funding due to ministerial absence. There was no hint of the barrage of desperate emails from the company that had been ignored for months. There was no mention of the turnaround strategy that was starting to show promise and may well have worked had the government funding been provided as promised.
There is a terribly poignant email trail that I could summarise but feel is best read as it is. I have deleted email addresses for privacy and the names of all those cc’d for the sake of (some) brevity:
From: Nico Jansen [the longstanding farm manager in the far right of the picture above from the Solms-Delta website; Fanie Karolus is between Mark Solms and Richard Astor] Sent: Friday, 01 June 2018 15:04 To: Rendani Sadiki (Acting Rural Development Director-General) Cc: ‘Alison Timme’; Fanie Karolus; Mark Solms
Dear Mr Sadiki.
We were surprised to discover in the Cape times this morning that DRDLR have decided to discontinue funding Solms delta in our current form. We have being advised by Ms Allison Timm that She is now legally obliged to liquidate the Company and ceased all operations. This will mean that We are now out of work from tomorrow and close our doors to customers. This could also be bad publicity. Is this what the DRDLR intended must happen?
We would much rather keep going a little longer so that We could All meet (including the Shareholders together with Ms Timm) to come up with a practical solution. We wrote on Monday the 28th requesting an opportunity to present our own plan to You but haven’t received any reply back.
We really hope that You will consider our request of a urgent meeting!!!
With Kind regards.
Nico Jansen and Fanie Karoles as representatives of the workers and residents of Solms delta.
From: Mark Solms Date: 2018/06/01 To: Rendani Sadiki (Acting Rural Development Director-General) Subject: URGENT
Dear Ms Sadiki
We would like to join Solms-Delta’s workers (whose letter is copied below [above]) in appealing to you to meet with us urgently, to address the fall-out from the bombshell your department dropped on Thursday, which took us all by surprise. Your unilateral announcement had unintended consequences of the kind that Nico and Fanie described – namely the fact that the BR practitioner has now closed our doors to customers and put everyone out of work. We appeal to you to continue funding the existing operations until we have jointly agreed the way forwards.
I assure you that we do not have any intention of profiting from this venture. We (the ‘white’ shareholders in Solms-Delta) have lost well over R250 million, and the deal with the DRDLR has (to date) cost us about R10 million more – but we are certainly not seeking to recover these financial losses or benefit financially from any future plan. Our aim remains to contribute as best we can to a solution of the pressing problems of our country – to support the idea that South Africa belongs to all who live in it – and thereby to its overall prosperity.
We – and surely you – simply cannot allow our (highly publicised, around the world) attempt at a genuine partnership to fail, so long as there is any prospect of it still succeeding. We and the workers still believe we can succeed. Please do not fail us now! The damage done to the ‘brand’ of Solms-Delta (by which we mean all that it stands for – socially, ethically and politically – including the 50/50 policy) can still be reversed. Indeed, it can still lead the way, showing that working together is the only viable way forwards for South Africans, white and black, even (and perhaps especially) in the highly charged arena of land reform.
We and the workers need to meet with you (and the BR practitioner) ASAP. Please. Everything is at stake.
Mark Solms and Richard Astor
From: Mark Solms Date: 2018/06/03 21:54 (GMT+02:00) To: Mashile Mokono (Head of Ministerial Office) Subject: URGENT
Dear Mr Mokono
I am writing to you at the suggestion of Cameron Dugmore [a white ANC member of parliament]. Please see below an urgent email sent today to the ADG. We are facing a catastrophe here which will have very bad consequences, including for government, at this sensitive moment in our country, which I am sure the ADG does not intend. For example, we have a German television crew right in the middle of making an hour-long documentary about Solms-Delta and all that it has achieved!
I would be most grateful if you could alert the Minister to this crisis. I and the Solms-Delta workers need to meet with her and the ADG very urgently. They feel utterly betrayed, and I cannot keep a lid on this for more than a few days longer.
From: Mashile Mokono Sent: Monday, 04 June 2018 01:32 To: Mark Solms; Rendani Sadiki Subject: Re: URGENT
I have been informed by the Ms. Rendani Sadiki, Acting DG that you are meeting her on monday morning on the Solms-Delta issue and the Ministry will be part of that meeting.
Mashile Mokono Head of Ministry Department of Rural Development and Land Reform
From: Mark Solms Sent: Monday, 04 June 2018 07:42 To: ‘Mashile Mokono’; ‘Rendani Sadiki’ Subject: RE: URGENT
Dear Mr Mokono
Thank you for this. Unfortunately, she has not been in touch with me.
From: Mark Solms Sent: Wednesday, 06 June 2018 12:52 To: ‘Mashile Mokono’, ‘Rendani Sadiki’ Subject: RE: URGENT
Dear Ms Sadiki and Mr Mokondo
I am very surprised and disappointed that you are not responding to all my requests for an urgent meeting. The only information that Richard Astor and I (as fellow shareholders) have about your plans regarding Solms-Delta has been obtained from your press announcement — and hearsay from some of the workers you have spoken to.
The recent actions of the DRDLR make no sense to me; and I cannot square what you are doing with your press statement (which, incidentally, contains significant inaccuracies and omissions as to how we actually reached the crisis we are now in).
My most urgent problem now is that I have been declining numerous requests from the media – to make a statement, be interviewed live, answer written questions, etc. – and I cannot do so any longer. I truly do not want to embarrass you, but I am afraid I also cannot lie or pretend to understand why you have reneged on everything we jointly agreed to in March last year (and on what you promised to do in your November 2017 press release).
My goal and Richard Astor’s is to continue to advance the cause of real transformation in our country and our sector. I cannot understand why you are treating us like this.
Please have the courtesy to reply, urgently.
Professor Mark Solms
The meeting never happened. Facing liquidation and the unimaginable consequences this would have for the worker shareholders of Solms-Delta, Solms and Astor met with the workers’ representatives and their lawyers on 11 June 2018. They offered to give them all their first-class shares, and ‘to forego any financial benefits in the companies as a result of the shareholding that they control’. The letter, addressed to business rescue practitioner Alison Timme, and of which I have a copy, asked for her approval of the agreement of the parties holding a 95% share of the company (ie the workers, Solms, Astor and MacGillivray), and it asked her to ‘delay the institution of proceedings for the provisional liquidation of the companies’ until this matter could be discussed with the government.
Merten’s final paragraph in Daily Maverick implies that the workers are fighting for their lives, abandoned by their starry-eyed transformation-lore-chanting bosses. She must have mistakenly deleted the email sent to her by Solms on Thursday 9 August 2018 at 20:40 with the letter from lawyers Chennells Albertyn, outlining the meeting above.
The response from the government (Sadiki), however (as reported by Merten), was, “Our continuation in Solms-Delta would be viewed as fruitless, wasteful and irregular expenditure … We don’t see (the plan proposed by the workers’ lawyers) as a viable option”.
The liquidation court hearing began on Friday 24 August 2018.
When I asked Solms, at the end of our long phone call, whether he regretted ever starting down this road, he hesitated for a moment. “No”, was the reply, followed by a pause. “The only regret I have is that I didn’t take better business advice.”
He went on to say, “Neither myself nor Richard had to incur any debt in the first place. We could have bought our farms and enjoyed them. We wanted to do the right thing. There was no financial gain to us to do this. It is madness to think for one minute that we did this for our own benefit, in any way. We’ve lost millions. It has cost a huge amount of time, money and anguish.”
When I pressed him about why the business did so badly, he explained: “We poured millions into training, housing, medical costs, improving the standard of living. The whole purpose was to employ and train the people who lived there, to give them opportunities, not to run the most efficient money-making machine ever. We had failures and we had huge successes.” Then he stopped. And there was a moment of silence.
“We’re not business people”, he said. “We don’t know what the fuck we’re doing!” “Can I quote you on that?”, I asked. ”Yes!” he laughed. “I kept believing that it was going to turn a profit. But it never did. And I accept responsibility that you can’t have a thing like this if it always makes a loss.”
Did he try to do too much? To help too wide a group and fix too many problems? Possibly. Should he have employed someone, or some people, who were more ruthless and hard-headed and business-focused than he was? Definitely, and right from the start. Did the lines between charity and business become too blurred and end up failing on both counts? Probably. Was the board of directors and the board of trustees lacking enough representation of both business and workers? Maybe. Did he wait too long before seeking help? Likely. Was the South African government a dangerous bedfellow? Almost certainly.
Ironically, should liquidation go ahead, the South African government will walk away with R40 million worth of land for which they paid less than R19 million. Solms and Astor will walk away having lost R260 million between them. The workers may well lose their homes, their livelihoods, their medical cover, their education, their opportunities, their dignity, their hopes.
The South African government may view the lives of 250 people as “fruitless, wasteful and irregular expenditure”. But I don’t believe that Mark Solms or Richard Astor, whatever their mistakes, hold that view. DM