Daybreak disaster: R2 billion gone, 1,900 workers lost their jobs, and 350,000 chickens had to be killed

President Cyril Ramaphosa was asked to authorise a Special Investigating Unit (SIU) investigation into the collapse of Daybreak Foods.

Daybreak Foods, in Bela-Bela, Limpopo, is currently under business rescue after the PIC invested over R1.6 billion in the poultry company.

Before the company was bought by the PIC, it was rated among the top poultry producers in the country.

However, after the acquisition, it experienced financial distress due to poor financial controls, irregular expenditure, fraud, and corruption.

The Public Investment Corporation is now financing the business rescue process in hopes of reviving the business, which created thousands of jobs in the area.

Some of the early interventions by the Business Rescue Practitioners (BRPs) included scaling down operations and retrenching over 2,000 workers.

The company also suspended its Chief Financial Officer (CFO) and is trying to raise capital through strategic equity partners.

The Standing Committee on Finance described the collapse of Daybreak as horrible and disappointing, and called for action against those responsible.

Committee Chairperson Joe Maswanganyi said it was unfortunate that such an important investment project collapsed due to fraud and corruption.

“There must be consequences. It cannot be that such an important company collapses and no one is held accountable, and the workers’ money just disappears,” he said.

Cyril Ramaphosa asked to authorise a Special Investigating Unit (SIU) investigation

The Democratic Alliance has now asked Ramaphosa to authorise a Special Investigating Unit investigation into the collapse of Daybreak Foods.

This request followed allegations of irregular expenditure and failures of oversight at Daybreak Foods.

Member of the National Assembly, Andrew Bateman, said that Daybreak Foods’ collapse had devastating consequences.

“Approximately 1,900 workers lost their jobs, more than 350,000 chickens had to be put down, and the PIC’s R2 billion investment was placed substantially at risk,” he said.

He wants the SIU to investigate allegations surrounding the appointment of the Daybreak Foods board.

It also wants the SIU to look into inflated payments for legal services and marketing, as well as the orchestrated litigation against executives who raised concerns.

The commissioning of a sham forensic investigation against executives and interference with a further forensic investigation must also be probed.

“The SIU must also establish whether people benefited improperly and whether the PIC adequately discharged its fiduciary and oversight obligations,” he said.

Bateman said that they had obtained documents purporting to be Blue Apple invoices and a Fundudzi Forensic Services report.

The invoices include millions for CEO induction events, newsletters, promotional items, and rugby game hospitality. It also included a branded party bus.

“South Africans deserve to know where the money went, who benefited, why investigations were halted and why warnings were not acted upon,” he said.

“An SIU investigation is now necessary to establish the truth, recover losses where possible and ensure accountability.”