Bankrupt company that belongs to the government pension fund paid lawyers R123.9 million

Daybreak Foods, which is in severe distress due to corruption and mismanagement, has paid one law firm R123.9 million over two years.

Member of the National Assembly, Andrew Bateman, shared these details in a press statement regarding Daybreak Foods.

Daybreak Foods, in Bela-Bela, Limpopo, is currently under business rescue after the Public Investment Corporation (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.

Bateman said that Daybreak Foods’ collapse had devastating consequences, including 1,900 workers losing their jobs and the investment losing its value.

As the PIC manages money on behalf of the Government Employees Pension Fund (GEPF), pensioners lost the most.

As more details about the collapse at Daybreak Foods emerge, stakeholders can see where the money went.

Fundudzi Forensic Services reported that numerous amounts were billed by Malahlela Attorneys for “Daybreak – State capture analysis and legal advisory”.

One of the beneficiaries was Malahlela and Company Attorneys, which, according to Bateman, received R123.9 million over two years.

“Daybreak’s Business Rescue Plan later records that Nexus found approximately R123.9 million had been paid to Malahlela Attorneys over two years,” he said.

“R39.9 million could not be matched to invoices, and another R8.8 million was suspected to be duplicate payments.”

“The complaint also raises allegations that approximately R57 million was spent on legal action involving employees who had raised concerns at Daybreak.”

He has lodged a complaint with the Legal Practice Council (LPC) against attorney Pulane Jimmy Malahlela and Malahlela and Company Attorneys.

He asked the Legal Practice Council to investigate excessive legal bills, duplicate payments, and millions in payments that could not be matched to invoices.

“The council should also investigate allegations that lawyers were used against employees who raised concerns at Daybreak,” he said.

“It also raises a question of why a poultry company was paying lawyers for work relating to State Capture.”