One of SA’s biggest sports retailer, The Cross Trainer, has been rocked by fraud, fronting and money-laundering allegations.
The company, which opened its doors more than a decade ago, and its directors – specifically one of the founders Mark Frame – have been reported to Sandton police station by a fellow director, Jappie Nhlanhla Nhlapo, who alleged that the company and Frame used his names to enhance their broad-based black economic empowerment credentials in order to score a R142-million tender at the Airports Company South Africa (Acsa) in 2007.
The case has since been transferred by the police to the Hawks for further investigation due to its commercial nature, especially the fraud, money laundering and fronting charges.
Nhlapo works for the company as a regional manager. He said he has never been paid any dividends or attended any shareholder meetings despite being listed as a shareholder and director of The Cross Trainer Airports, the company that runs stores at the OR Tambo and Cape Town international airports.
Sunday World has seen CIPC (Companies and Intellectual Property Commission) documents, including the shareholders’ agreement, that shows that Nhlapo was indeed a shareholder and director of the company. Nhlapo said he was not aware that he was a director until he began to question why he was always being asked to sign documents.
The only benefits Nhlapo received from the company, the statement shows, was a Ford Ranger bakkie, a company credit card and a company phone, but he said these have nothing to do with him being a shareholder.
The police affidavit further shows that Nhlapo also accused The Cross Trainer and Frame of laundering money using employees accounts and a company called ML Shopfitters.
According to CIPC records M.L Shopfitters is owned by Moegamat Karriem, and another director Lynnette Karriem, was listed as having resigned from the company.
Karriem had not responded to questions at the time of going to print Nhlapo said Frame deposited R1-million into his personal account last year and later asked him to transfer it to his son’s account, who was based in the UK.
“When looking into the transaction, it amounts to money laundering. He did not want the authorities to trace where the money came from. My account was a vehicle to launder the money,” reads Nhlapo’s statement.
In the same statement, Nhlapo said Frame had deposited R1.8-million to ML Shopfitters, which then paid back Frame R1.3-million. “ML Shopfitters was a conduit to launder money on behalf of Mark Frame,” he said.
Nhlapo, in his statement, added that he never gave Frame the permission to use him as a front. “He benefitted and I never benefitted anything except the salary as an employee of The Cross Trainer. I request the South African Police Service to investigate based on the information provided and prosecute anyone who perpetrated these offences.”
Sunday World has seen a sales report of The Cross Trainer at OR Tambo, which shows that the branch made a profit of R34-million between September 2008 and March 2016.
Nhlapo’s lawyer, Mahlatse Gwebu, of Gwebu Inc said: “The allegations levelled against the Cross Trainer Group of companies by our client are extremely serious and our client will not stop pursuing the matter because it violates his rights as well as the policies and the efforts of the government to properly empower black people through the broad-based black economic empowerment framework. Our office has been instructed by our client to immediately proceed with all the necessary legal action to obtain relief for our client’s cause.”
The Cross Trainer and Mark Frame’s attorney, Gary Rachbuch, confirmed knowledge of the dispute. “In as much as there’s a case opened, there are no charges pending against my clients. In as much as he accused my clients of fronting and
money laundering, the allegations are spurious and we will sue him for defamation because there’s no truth to the claims,” said Rachbuch.
Provincial police spokesperson Kay Makhubela confirmed that a case of fraud, fronting and money laundering was opened but it was transferred to the Hawks for investigation.