Failed BEE deal forces former ANC councillor out of home

Rametsi claims house was part of the deal he had with Cornish

Soured business relations between former ANC councillor Johny Rametsi and his former partners Gordon and Lorna Cornish have left Rametsi and his family destitute. The former councillor and mayoral committee member in the Matlosana and Dr Kenneth Kaunda District Municipalities has been evicted from his home in Klerksdorp after the North West High Court determined that he was not the rightful owner of the La Hoff property.

In his answering affidavit, Rametsi told the court that the residential property formed part of a wider commercial arrangement linked to Prothane Industrial, a polyurethane manufacturing business he once co-owned with the couple. But the court found that ownership of the house was never legally passed to him because there was no written deed of alienation and no registered transfer in the deeds office.

According to Rametsi, Cornish approached him in 2008 and offered him a 51% interest in Prothane Industrial because the company needed to be BEE compliant to secure funding. “The first applicant approached me and offered me 51% ownership in his close corporation, Prothane Industrial. My majority ownership secured the funding,” Rametsi states in the affidavit.

An official Companies and Intellectual Property Commission (CIPC) document attached to the affidavit records Rametsi as holding a 51% member’s interest in Prothane Industrial from April 3, 2008, with Cornish holding the remaining 49%.

The same CIPC document lists Rametsi’s residential address as the disputed La Hoff property.

Rametsi further alleges that there was an agreement that the residence would eventually become his. He says he also received a company vehicle, payment of his children’s school fees, and a monthly allowance. He claims he generated about R5-million worth of business for the company through what he describes as “sweat equity”, and that attorneys had already begun transferring the property into his name before the relationship deteriorated.

However, Cornish’s version, contained in court papers, differs sharply.

He did not dispute that Prothane required a BEE-compliant structure to access finance but said Rametsi was expected to acquire a substantial member’s interest as part of that commercial arrangement. Cornish argued that the broader transaction never materialised after Rametsi allegedly failed to obtain financing to purchase the member’s interest.

He said this brought the arrangement to an end and extinguished any rights Rametsi had to remain on the property.

The High Court found that whatever business arrangement existed between the parties could not override South African property law.

Judge André Petersen held that ownership of immovable property can pass only through a valid written agreement and registration in the Deeds Office. Hence, the court found that Rametsi was occupying the residence unlawfully and ordered him to vacate it.

The former councillor’s family was removed from the property in Klerksdorp on June 15.

In 2015, Prothane Industrial was selected as one of the inaugural Top 40 National Gazelles, a flagship programme launched by the Department of Small Business Development and the Small Enterprise Development Agency to identify and support South Africa’s fastest-growing small and medium enterprises.

The company was listed among the country’s standout manufacturing businesses at the programme’s launch.

But the relationship behind that success would eventually unravel.

Company newsletters from Prothane’s earlier years introduced Cornish as the company’s co-owner and Rametsi as its partner, with the two jointly addressing staff under the heading “Message from the Owners”.

Sunday World established that Prothane Industrial has since been sold to new owners. Cornish has since relocated to Mozambique, where he is involved in farming activities.

Rametsi told the Sunday World that neighbours had taken him and his family in after their eviction.

“My Samaritan neighbours took me in. I have now even overstayed. I feel betrayed. Those I trusted with my hard labour and black skin to push the business to success have left me down and out.”

Tshwarelo eseng Mogakane