The business partnership between Vusi Thembekwayo and Rovian Justin Naidoo has crumbled after the latter accused the internationally acclaimed motivational speaker of defrauding him.
Naidoo alleged that Thembekwayo failed to pay him millions of rands. He said he saved Thembekwayo and his company, My Growth Fund Venture Partners (MGFVP), millions of rands by finding a good office rental deal that saved them wags of lucre.
Naidoo also alleged Thembekwayo failed to pay him for his services to MGFVP.
He also alleged that Thembekwayo and company failed to transfer 50% of MGFVP shares to him as agreed. He claimed left his successful business to join forces with the motivational speaker because of this agreement.
News of the collapse of their pact came to light after Naidoo took Thembekwayo and
MGFVP to court to seek an order to force him to pay him a total of more than R13-million for services rendered.
The staggering amount comprises R5-million for the work he has done for MGFVP and R8.7-million for brokering the rental deal for Thembekwayo and his company.
In the court papers we have seen, Naidoo said during June 2021, he, together with Thembekwayo and MGFVP, cited as the first and second respondents, respectively, entered into a verbal agreement to join their respective skills and resources with the purpose of creating investment opportunities and raising funding for projects.
Thembekwayo and MGFVP would utilise the entity as the primary vehicle wherein the investment opportunities would be created and conducted and funding would be raised with the intention of making a profit.
Naidoo said Thembekwayo agreed to transfer to him 50% of the total shareholding and/or securities of MGFVP on condition that he leave his successful company.
Naidoo said he was expected to conceptualise and compile fund structures, commercial term sheets, and investment memorandums.
He said he was also expected to develop what would become the “My Growth Fund” playbook, which was to be used to obtain new private equity venture capital and to build a high-net-worth variable-rate debenture fund, which would be known as Vuka and Mount Fletcher.
Naidoo was also expected to create a venture capital arm and obtain venture capital, create a private equity book, and market the envisaged projects to the public.
In addition to that, Naidoo said he was also expected to do the due diligence on proposed projects, develop the Exeo Capital playbook, structure a debt lending portfolio, and attend to the deal-making negotiations in respect of what would later become project Sasfin.
Naidoo said because the business had not generated sufficient income after three months to allow for profit sharing, they amended the agreement to make provision for him to charge against a loan account for services rendered at his normal rate of R5 000 per hour.
“The plaintiff’s services, so rendered, would accumulate as a loan in his favour in the books of the second defendant, which loan would become repayable to the plaintiff prior to any declaration and distribution of dividends/profits.
“The plaintiff was entitled to retrospectively charge the above-agreed rates for his hours worked from June 2021 onwards,” read the papers.
Naidoo said he rendered his services at the agreed rate of R5 000 per hour and contributed 1 000 of his personal hours towards the investment and other projects of Thembekwayo and the entity.
Naidoo said Thembekwayo and MGFVP breached their agreement in December 2022 when they failed to transfer 50% of the total shareholding to him.
They also failed to create a loan account in his favour in the books of MGFVP for the time he spent towards their project at the agreed rate.
Naidoo said MGFVP stopped all communication with him during December 2022.
The papers claim he “blocked the plaintiff from access to the electronic mail and database of the first and second defendants.
Terminated the plaintiff’s access to all the first and second defendants’ systems and electronic platforms. Refused to communicate any further with the plaintiff.”
This, Naidoo said, constitutes a repudiation of their contract.
“As a result of the repudiation/breach of the agreement, Naidoo said he suffered damages in the amount of R5-million, calculated on the agreed rate of R5 000 per hour,” read the papers.
Alternatively, Naidoo is demanding R5-million from Thembekwayo and his entity after they misled him into believing that he would receive 50% shares in the company.
“At the time of the negotiations and at the time of contracting, the defendants knew that the representations were false because the first defendant never had the intention to provide the plaintiff with 50% of the shareholding within the second defendant and did not have the intention to pay the plaintiff for the services rendered.
“Because of the fraudulent misrepresentations made by the first defendant, the plaintiff has suffered damages in the amount of R5-million, being the hours spent by the plaintiff towards the projects of the first and second defendants at the rate,” the court papers state.
“In this respect, the plaintiff pleads that he, over the period of June 2021 up until December,” read the papers.
In the second claim, Naidoo said Thembekwayo told him in July 2021 that he required upmarket offices for himself and his entity at a reduced rental rate.
Using his connection, Naidoo said, he informed Thembekwayo and MGFVP that he would source upmarket office space at a reduced rental rate.
He said Thembekwayo told him that should he succeed in sourcing such a property at a low rate, he would pay an amount of 50% of the savings, being 50% of the difference between the reduced rate of rentals charged to his entity and the actual rental rate.
He said he found Thembekwayo and a rental deal with Redefine Properties, Sandton.
The normal rental for the office and parking bays would be an amount of R3-million a year. This constitutes an amount of R250 000 a month.
“The agreement that was eventually concluded between the second defendant and the landlord entailed that no rent would be charged and that the only amounts to be paid would be approximately R80 000 in respect of the offices and R37 000 in respect of parking bays, which amounts are the rates that the landlord charges for utilities and amenities. As such, no rental was charged.
“The 50% of the value saved over the period of five years constitutes, therefore, an amount of R8 799 900, being the value saved of R17 599 802.90 divided by two, which the defendants must pay the plaintiff,” read the papers.
Naidoo said Thembekwayo failed to pay him the agreed amount.
“As a result of the repudiation/breach of the agreement, the plaintiff suffered damages in the amount of R8 799 901, being the amount the plaintiff would have earned in respect of the second agreement had it not been for the defendants’ repudiation thereof,” he stated in the court papers.
Thembekwayo could not reached for comment. Sunday World has sent his a message so the story will be update once he has responded.
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If someone defraud you, where is the case number?