Yekani Manufacturing has closed its doors, potentially putting 500 skilled workers out on the street.
YM, part of the Yekani Group, was once the mainstay hope of East London becoming a job-creating fourth industrial revolution capital.
The East London Industrial Development Zone factory never reopened on Monday after the festive season break.
Standard Bank is calling in a loan of R200m. After YM's failure to make repayments, liquidation processes are under way.
Standard Bank spokesperson Ross Linstrom said the bank could not comment, as it was against policy to discuss client details.
The R1bn information and communication technology plant was punted as the largest of its kind in southern Africa when it was launched in June 2018 to much fanfare by then trade and industry minister Rob Davies and former Eastern Cape premier Phumulo Masualle.
Employees who spoke to the Dispatch on condition of anonymity, fearing they might be victimised should Yekani and Standard Bank come to an arrangement, said staff had not been paid since August.
In a written response to the Dispatch, Yekani Group legal adviser and company secretary Akhona Mafani said that while Standard Bank had brought an application for Yekani's liquidation, the matter was sub judice and he could not comment.
But Mafani did concede that if the bank put Yekani into final liquidation, 500 people would be out of work.
He would not comment on whether it was Standard Bank that locked Yekani’s doors on Monday.
The employees who spoke to the Dispatch said Yekani had 11 production lines, each costing R40m. Four were decommissioned, dismantled and removed.
Mafani said: “Yekani had 11 lines of which only eight were commissioned. Of the eight, two are fully paid and belong to Yekani. Two are financed through Standard Bank and are not yet fully paid. The four recently removed were bought through a Panasonic agent and are not yet fully paid as well, and some have been removed by Panasonic from the Yekani premises. Their whereabouts are not known to Yekani.”
The sources said Yekani directors had repeatedly failed to communicate the true financial and cash flow situation to employees. They also charged they had been blocked from accessing company computers by Standard Bank.
Mafani denied this, saying a week before closing for the Christmas break (December 12) “a staff meeting was called where the staff was updated on everything”.
But employees said aside from the occasional e-mail, which did not offer details, people were kept in the dark.
At the height of its production, the company was reportedly producing electricity pay meters and up to 7,000 satellite decoders a day, and had capacity for more. It also made cellphones and produced 6,000 tablets for the Gauteng education department.
Mafani said: “Without confirming any of the statements made (by disgruntled employees), the tablet orders were one-off orders from resellers. Yekani did not have a contract directly with the government and therefore would not have any information of any alleged cancellation and the authorisation thereof.”
Complaints that staff could not get any information from Yekani as to their to UIF, income tax, pensions, medical aid, accumulated leave and other documents were unfounded, said Mafani.
“[They] were provided with UI19 forms before the break but [most of them] did not go and pick them up. They were also informed about the status of their medical aids. Yekani had not yet introduced pension funds as there has never been one since the days of Vektronix [the East London company purchased which became Yekani].”
He said he was unaware of any requests from staff over income tax and refuted allegations that Standard Bank had blocked access to company computers.
Mafani would not comment on allegations that most staff had not been paid since August. Rumours that some staff were still being paid — as much as R100,000 per month, and up to R350,000 at director level — were not true, he said.
When asked what was salvageable from the R1bn investment, Mafani replied: “The question is loaded, kindly simplify.”
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