South Africa

Working the Land

Land question at the heart of Solms-Delta as liquidation looms again

Solms Delta, Franschhoek, 06 February 2016jbdodane via flickr

The clock is ticking on Solms-Delta, the wine estate near Franschhoek meant to showcase the official 50:50 farm worker empowerment policy, which has been in business rescue for some 15 months now. Liquidation looms, again, after some six weeks of meetings, requests for meetings and meetings not happening. If the issue of who the business rescue practitioner is is not resolved by deadline on Friday, it’s back to court to re-instate the liquidation.

It’s a saga as twisting as vines on the trellis, grafting together transformation talk, officialdom’s predilection for ticking the boxes, smooth manoeuvrings on several fronts and the struggles against rural power relations that frequently leave workers at the receiving end even as government transferred at least R65-million, and as much as R83-million, to Solms-Delta project over the past two years.

In late August 2018, the business practitioner, 13 months into the process, launched liquidation proceedings in the Western Cape High Court. It was successfully opposed by Solms-Delta workers – and staved off amid an agreement to try turn around this 50:50 farm workers equity share empowerment project launched officially in December 2016.

There was broad agreement between the parties, from workers, officials, owners and others, on what was to follow. Except that over the past six weeks turning agreement into legally valid and binding measures has dragged on.

There’s no dispute that PricewaterhouseCoopers (PwC) business rescue practitioner Alison Timme had offered to step down as long as another business rescue practitioner was appointed to take over.

This would ensure liquidation – more often than not it’s a case about getting cents in the rand rather than actual rands back – would stay off the table, and create the space for a turn-around strategy.

Also as part of the process going forward, Solms-Delta owners University of Cape Town Professor Mark Solms and British philanthropist businessman Richard Astor offered to transfer their shares to workers. This would mean workers and the National Empowerment Fund (NEF) would be owners with 95% and 5% shares respectively. The NEF is the primary funder for this 50:50 farm worker empowerment project, and others, countrywide.

It’s technical, and complex, in that different parties need to come together to formally turn undertakings into binding legal agreements.

Now it has emerged the Rural Development Department has appointed another Gauteng-based business rescue practitioner, Mohamed Tayob, after a series of interviews, but apparently without the formalisation of Timme’s resignation.

Alison Timme requested Mr Tayob’s credentials as a precondition to her resignation,” the department said in written responses to questions. “Pursuant thereto she tendered her resignation and the process does not require any stakeholder to formally approve her resignation.”

However, Timme had been appointed from 25 July 2017 by the board of Solms-Delta Wine Estate (SDWE), the main 50:50 project contracting party, whose directors include Solms and Astor. And according to the Companies Act, her stepping down requires a meeting – and decision – by the SDWE board.

Daily Maverick understands that as recent as late September, there had been no such SDWE board meeting amid requests for meetings between the company and department. It could not be independently ascertained whether the SDWE board actually has met or set a date to meet and taken the decision on a new business rescue practitioner as required in law.

This statutory requirement is currently being attended to. The process is on-going and certainly not halted or stalled,” the department said in its responses.

Earlier the NEF also in writing said processes to “regularise” the situation around the business rescue was under way. “A board meeting will be convened as a priority to vote on the replacement of the BRP (business rescue practitioner).”

Both the department and the fund indicated there was a turn-around plan but details would be dealt with between the department and the business rescue practitioner. The department said it “would certainly like to see the farm succeed, the workers empowered and the realisation of government objectives, particularly giving effect to strengthening the relative rights of people working the land.”

It remains unclear whether workers would have a role, and if so, what that role might be, particularly if workers were to own 95% of shares in light of the owner’s offer to transfer their shares.

Rural Development and the NEF both in their separate written responses to questions indicated the “entire shareholding” of the Solms-Delta project was being reviewed and “as part of the new structure necessary changes are being made to the constitutional documents of the entities including the trust deed”.

Neither provided further details, although the department referred this matter to the lawyer representing workers.

Glyn Williams of Chennells Albertyn, who has been acting for Solms-Delta workers, said: “The offer (by Solms and Astor) to transfer their shares to them was accepted by the workers, but the shares have not yet been transferred. Nor has the workers’ trust been restructured”.

As part of the 50:50 empowerment project, the Wijn de Caab trust was the vehicle for the workers’ 45% stake and the 2016 funding agreement with the NEF required a change in the trust deeds. To date the trust deeds still identify “the socially, economically or politically disadvantaged individuals, farm workers and inhabitants of the Franschhoek and Dwars River Valleys, Western Cape…”, not the Solms-Delta farm workers and their families.

Williams said he continued to be hopeful liquidation would be avoided and a solution found to make the project work. “To my mind it’s clear none of the stakeholders want the companies to go into liquidation. It’s a question of all stakeholders fine-tuning… the building blocks are already in place.”

But the longer uncertainty persisted, the greater the potential damage.

Solms, asked about the transfer of the shares to workers and decision on the business rescue practitioner, declined to comment. “My feeling is you, you are not an honest broker and I don’t see why I should talk to you. You are just spinning some story,” he told this reporter. Solms took a different view to the Daily Maverick’s reporting on Solms-Delta and requested a right of reply written by a wine writer.

The clock is ticking to Timme’s Friday deadline to have the Solms-Delta business rescue resolved in line with the agreements of six weeks ago, or face re-enrolment of liquidation proceedings.

Rural Development said it had “consulted counsel and will if necessary challenge any further liquidation attempt”.

Approached for comment PwC through its Africa Chief Operating Officer Fulvio Tonelli said: “PwC is unable to respond to your questions as we are bound by the rules of our profession relating to client confidentiality. The rules prohibit us from commenting on matters pertaining to our clients.”

The business rescue and liquidation processes have raised questions of how land reform, tenure security and worker share equity are conceptualised and implemented.

What happens over the next three days will be crucial. The clock is ticking. Not only for Solms-Delta, but against the backdrop of a robust public debate on land – also for government’s farm worker equity schemes, tenure security and transformative land reform. DM

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