Johannesburg- Popular South African sneaker brand Drip has been muddied by a share-ownership battle between its founder and a Pretoria investor, who wants a third of his business after he had paid him back more than half a million for a loan of R45 700.
Alfred Mashiya has dragged the footwear architect Freddy Lekau Sehoana and his company Drip Footwear to the Joburg High Court to demand that he transfer 34% of the company’s shares to him.
In his founding affidavit, which we have seen, Mashiya said he met Sehoana on November 18 2019 at Menlyn in Tshwane, where they entered into a “contract of investment” to loan him and the company R45 700 to pay for 200 pairs of sneakers, which were manufactured and ready to be sold.
Mashiya said Sehoana was supposed to repay the loan together with R18 000 interests before December 31, 2019, and also pay him R100 from every pair of the first 5 000 sneakers sold.
View this post on Instagram
He said they agreed that in the event that Sehoana delayed paying him, he would then be entitled to gain 5% of shares after 24 hours of non-payment and 1% for each day the payment was delayed.
Mashiya said Sehoana defaulted in paying the R100 from the first 5 000 pairs of sneakers sold and therefore he was entitled to the shares as stipulated in the contract.
“In light of the breach and as per the contract, I’m entitled to 34% of Drip Footwear company calculated from the 1st of August 2020, being the date of the breach until the day of the fourth day of September 2020, being the date which I instructed my attorney to execute a letter of demand to have the second respondent issue the demanded shares of the company into my name, the demand which the second responded ignored.”
In his responding affidavit, Sehoana confirmed that he had borrowed the funds from Mashiya when he was experiencing cash-flow constraints.
He said he paid back the loan plus interests before December 31, 2019, and was supposed to pay him R100 monthly for the first 5 000 pair of sneakers sold but failed to do so at the agreed time because of the outbreak of Covid-19 and extraordinary high running costs.
Sehoana said they had changed the terms of the contract in which he promised to pay Mashiya in two instalments R200 000 before July 31 last year and R300 000 before the end of November last year.
View this post on Instagram
He said he could not pay the R200 00 as promised because the revenue generated by the sneakers had been insufficient but he had paid R100 000 on August 6 last year.
He said on September 4, Mashiya’s lawyers sent him a letter demanding the outstanding amount within 14 days and the transfer of 34% of his shares from the company to him.
He said he had paid him the outstanding amount the following day.
“Despite full payment of the long-term benefit, the attorneys still demanded that I transfer a third of my shareholding.”
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here.