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CEO confident Yekani can be resuscitated

Daily Dispatch – Cele says he is in talks with investors, including one from the US Yekani Manufacturing, the R1bn East London hi-tech company being put into liquidation by Standard Bank, might appear to be down but, CEO Simphiwe Cele insists, it’s “definitely not out”. The company is fighting to keep its 500 employees in their jobs despite its failure to open its doors this year. Cele told the Dispatch the liquidation decision was now set down for February 18,…

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Daily Dispatch – Cele says he is in talks with investors, including one from the US

Yekani Manufacturing, the R1bn East London hi-tech company being put into liquidation by Standard Bank, might appear to be down but, CEO Simphiwe Cele insists, it’s “definitely not out”.

The company is fighting to keep its 500 employees in their jobs despite its failure to open its doors this year. Cele told the Dispatch the liquidation decision was now set down for February 18, but he wanted the matter resolved well before then.

“I have already approached three investors, one based in the US. Hopefully they will be both investors and customers.” He said the media had mistakenly intimated that there was bad blood between the company and the Eastern Cape government, which was not accurate, and that the liquidation threat had nothing to do with the province. Our problems were twofold. Demand for the products saw us grow too fast, which put us in cash flow constraints. Coupled with that, we had only two major clients. The biggest, Commscope, supplied our decoders to MultiChoice. It was 90% of our business. The other was Landis & Gyr, an overseas group with an SA office. It supplied Eskom with our smart meters.” Things started to unravel when Commscope took what Cele described as a “business decision” to terminate the relationship. However, he said both companies were still open to negotiating future relationships.

He would not comment on the timing of the decision, nor would he say anything on the rumour that a senior government official was hoping to buy Yekani out of liquidation. “We have been working really hard, and there is light at the end of the tunnel. As I keep stressing, keeping Yekani going is my total focus.” Cele said he would do anything to save the jobs.

But disgruntled staff members, speaking anonymously to the Dispatch, doubt Cele’s words and have asked why it has taken so long to act, and then only in response to Standard Bank’s liquidation intent. Most staff members had not been paid since August and were left in the dark as to why, he said.

The accusation was denied by Yekani, who claimed that there had been meetings and e-mails communicating issues to staff. Additional complaints from staff were that they could not get any response to requests for documents, which Yekani denies. It said many of the documents made available in December went uncollected. Cele said he deeply regretted that no documents were currently available as it was now impossible to provide them because of the liquidation case. Cele said a survey, were it possible, of the 500 staff now sitting at home would reveal that the majority would not question his commitment to make the company work and keep people in work. But staff members questioned this as well.

Cele would not comment on rumours about his position at Yekani and his spending habits, other than saying he was aware of them. Cele admitted he had two Bentleys, but added the first was purchased when he worked for Nedbank, and the second before Yekani was established. He denied that Yekani owed Standard R200m. The real debt was well below this, he said, but declined to give a figure. Standard Bank has since put out a correction, stating the debt is R68m.

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