ANGUS NORKIE // VAUGHAN WATTS
| Complainant(s) | Respondent(s) | ||
| Angus Norkie | Vaughan Watts | ||
| Summary / nature of the complain | |||
| Allegations – use of B-BBEE credentials of Mr Angus Norkie in the entity without corresponding economic benefits and participation, and diversion of funds to an entity co-owned by respondent and his wife - Findings - arrangement by the parties is contrary to the objectives of the B-BBEE Act and undermines the implementation of the B-BBEE Act. | |||
| Summary findings against Vaughan Watts | |||
| Mr Watts represented to clients that Nocks Investments CC, which was subsequently converted into a company, was 51% owned by Mr Norkie, thereby resulting in the B-BBEE Level 1 status for Nocks Investments CC, but inhibited Mr Norkie from substantially participating in the core activities of Nocks Investments CC; Mr Watts failed to provide documentation to the auditors to enable them to accurately reflect the financial status of the business, thereby preventing Mr Norkie from establishing whether a financial benefit should have accrued to him in accordance with his 51% members interest in Nocks Investment CC; Mr Watts transferred a once-off amount of the value known to the B-BBEE Commission out of Nocks Investments CC without the authorisation and knowledge of Mr Norkie; Whereas Mr Watts averred that the amount was paid for overheads and expenses of the entity, he failed to provide substantial proof to that effect; Mr Watts failed to demonstrate the arms’ length relationship between Nocks Investments CC and U-Fuel, an entity that he co-owns with his wife, and the information assessed could not point to any relationship that properly meets the prescripts to give rise to the payment obligations from Nocks Investments CC into U-Fuel; Due to Mr Watts transferring approximately 63% of the earnings of Nocks Investments CC to U-Fuels, without the authorisation and knowledge of Mr Norkie, Mr Watts benefited financially to the exclusion and detriment of Mr Norkie as a significant member or owner of the entity; and Mr Norkie did not receive the economic benefits that would reasonably be expected to be associated with the position or status held by Mr Norkie in accordance with the proportion of his membership in the Nocks Investments CC. | |||
| Recommendations: | |||
| Mr Watts must within 30 (thirty) days of the findings pay a once off amount, which in the view of the B-BBEE Commission is reasonable compensation to Mr Norkie for his role as the owner of 51% members’ interest in Nocks Investments CC, calculated from the commencement of their arrangement and taking into account the amounts previously drawn by Mr Watts as salary and/or management fees, as well as amounts paid to U-Fuel, which Mr Watts co-owns with his wife; In the interest of advancing the objectives of B-BBEE and measures to prevent similar transactions or arrangement involving any of these two parties, both Mr Watts and Mr Norkie must within 60 (sixty) days of the findings undergo training on the B-BBEE Act through the B-BBEE Commission, or any institution accredited in terms of the law of the Republic of South Africa to offer such training, it being noted that where the accredited institution is utilised, proof of attendance shall be provided to the B-BBEE Commission; In the interest of promoting good corporate governance in respect of any entity involving any of these two parties, both Mr Watts and Mr Norkie must within 60 (sixty) days of the findings undergo training on corporate governance through the Companies and Intellectual Property Commission (CIPC), or any institution accredited in terms of the law of the Republic of South Africa to offer such training, it being noted that where the accredited institution is utilised, proof of attendance shall be provided to the B-BBEE Commission; Considering that Mr Norkie has removed Mr Watts as a member of Nocks Investments CC and that Mr Watts has transferred ownership wholly to Mr Norkie, it is not necessary to take any action in respect of ownership and management of Nocks Investments CC; and Considering that Mr Norkie has also opened a criminal case against Mr Watts regarding the finances of Nocks Investments CC, it is not necessary for the B-BBEE Commission to refer the matter to the South African Police Service and Mr Norkie may pursue this criminal process with the South African Police Service. | |||
| Click here to download the full Publication of Findings and Recommendations |