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South Africa – Recruiter Kelly Group accused of fraud

31 May 2013

South African recruitment firm Kelly Group has been accused of cheating on its black economic empowerment (BEE) partner, Ndaba Ekude, according to local media reports. South African companies are required by law to boost black ownership to rectify the imbalances of apartheid.

It is alleged that the recruiter has swindled Ndaba Ekude of the profit generated by the partners' joint venture, Marula Staffing, which was created by the two parties to secure a tender for the post office.

Ndaba Ekude claims that at least ZAR 264.9 million (USD 26.7 million) in revenue was not declared between 2005 and 2012 and that Kelly charged Marula Staffing ZAR 54.4 million (USD 5.5 million) in unauthorised group charges. The firm’s BEE partner also alleges that ZAR 59.9 million (USD 6.0 million) was transferred from the Marula Staffing account to the South African Post Office without any explanation.

The BEE partner, which owns 51% of Marula Staffing, is accusing Kelly of misappropriating funds, forcing Marula into insolvency. It is also claimed that the staffing firm refused Ndaba Ekude access to Marula Staffing’s bank accounts.

Ndaba Ekude has demanded an independent investigation into Kelly’s application to liquidate Marula, a move that it opposes. Kelly declined to answer questions as the case has now gone to court and chief executive, Gareth Tindall, said: “Not only do the questions raised by you go to the very root of the ongoing opposed high court application, we are not at liberty to answer the questions posed by you as we are prohibited from doing so by the confidentiality provisions in the shareholders’ agreement.”

Court documents allege the recruiter “arbitrarily misappropriated Marula Staffing's funds; is extensively mismanaging Marula Staffing; is extensively mismanaging Marula Staffing's bank account; and monies to which Marula Staffing is entitled.”


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