Ciaran Ryan talks to Nompu Siziba on SAFM about a recent court case in North West Province where a local municipal manager was sentenced to 90 days in prison unless he gets water and sewage services running again. The residents took over control of the services and saved the manager from jail.
When local government broke down, the people of Kgetlengrivier rolled up their sleeves and did the work themselves. From Moneyweb.
In an astonishing judgment in the North West High Court in December last year, the judge ordered the imprisonment of the municipal manager of Kgetlengrivier in North West province for 90 days, suspended on condition that raw sewage spilling into the Elands and Koster rivers be cleared up within 10 days.The Kgetlengrivier Local Municipality falls within the Bojanala Platinum District Municipality (the seat of Bojanala Platinum is Rustenburg).
Justice Gura also ordered that residents association Kgetlengrivier Concerned Citizens be allowed to take control of the area’s sewage works, to be paid for by the local and provincial governments.
The municipal manager was further sentenced to imprisonment for 90 days, suspended on condition that he provides clear, potable water to the residents of Koster and Swartruggens in North West within 10 weeks of the ruling.
This is a judgment that should have officials in dysfunctional municipalities across the country quaking in their boots.
It means potential jail time for the worst offenders, and opens the door for citizens to take control of essential services in their areas.
Read:Municipalities just don’t listen – Auditor-General (2018)
Residents given control
Justice Gura also ordered that residents in Kgetlengrivier be given control of the area’s water works so they could appoint qualified people to run it. All this must be paid by the local and provincial government.
“Now we’ve got beautiful, clear, drinking water, and we’ve got more than we know what to do with,” says Carel van Heerden, the head of Kgetlengrivier Concerned Citizens.
“Local residents paid R7.5 million out of their own pockets, but we got the pumps repaired or replaced, we rented generators to make sure the water could continue pumping in the event of power outages, and we got the water system back in full operation in a matter of weeks.”
The local government will have to pay the residents back their R7.5 million – plus their court costs.
“This is unprecedented in South Africa,” adds van Heerden. “The judge in this case was incredibly brave, and we believe established a precedent for other ratepayers’ associations around the country dealing with corrupt or failing municipal leaders.”
Ministers’ reaction a sign of things to come?
In the Kgetlengrivier case, the national ministers of Environmental Affairs, and Human Settlements, Water and Sanitation were cited as respondents, but agreed to abide by the court‘s decision – perhaps signalling national government is no longer willing to back comrades found to have mismanaged at local government level.
On January 8, the municipal manager, RJ Mogale – facing jail time unless the conditions of the court order were met (and they were, but not by him) – issued a public notice claiming van Heerden “and a handful of white males” had illegally taken over the water and sanitation plants and “had disrupted the provision of water fundamentally violating the rights of residents to Kgetleng”.
Mogale goes on to advise residents that the municipality had made an application in the North West High Court to reassume control of the water and sanitation plants. That application was dismissed by the court.
‘Illegal takeover’ claim ‘despicable’
Van Heerden says Mogale’s attempt to frame what happened at Kgetleng as an illegal takeover by a “handful of white males” is racist and despicable, and a legal suit is being planned against him in the coming weeks for his incautious remarks.
The court order makes it clear that the municipality has been bypassed and rendered irrelevant, other than to pay the costs of providing water and sanitation services provided by the residents.
“We have the support of the community, regardless of race,” says Van Heerden.
“We’ve provided jobs to the local community that were not there before. And we got the job done in weeks that the municipality couldn’t get done in years.
“It took us about a week to get the sewage plant running again. People from every part of this community [were] involved in this salvage operation, and everyone is fed up with the non-delivery by the municipality.
“Many of the more affluent people in the community have joined this fight, even though they don’t rely on municipal services. They have solar panels and boreholes because they can afford them. They got involved in the fight because they wanted to ensure poorer members of the community who desperately need these services were able to survive.”
How it came to this
There is a long and storied history behind this court judgment.
In 2018, workers at the newly constructed R144 million sewage plant downed tools over a pay dispute, leaving the community without water for several days. Van Heerden says vandalism and theft of equipment was rampant, and those running the site were incompetent. Workers abandoned the site one by one until there was no one left to work it at all. The town’s taps ran dry.
Residents obtained an urgent court order to restart the plant and supply water to the community. They ran the plant for a few weeks until the municipality resumed control.
In February 2020, workers again went on strike for backpay and again abandoned the site, says van Heerden. “We again got a court order to restart the plant and we ran it for four or five weeks before handing it back to the municipality.”
Residents previously won another case against the municipality, which they claimed was unlawfully setting rates and taxes.
Yet another case interdicted Eskom from cutting electricity to the municipality, which was more than R200 million in arrears.
Municipality must show that it’s up to the task
This time, however, the court may not be so lenient with the municipalities’ attempts to reclaim control over the water and sewage systems.
The December 2020 court order reads: “It is declared that the KLM [Kgetlengrivier Local Municipality] fails to supply potable water to the residents of Koster and Swartruggens.
“It is declared that the water purifying works at Koster and Swartruggens are in states of disrepair and are mismanaged.
“It is accordingly declared that Bojanala [Platinum District Municipality, also a respondent in the case] and the KLM are in breach of their constitutional obligations for providing potable water sustainably.”
Though an interim order, the municipalities must show by March 1 this year why this order should not be made final – meaning they will have to put a powerful case to the court that they have managed to get their act together and can do a better job than the residents.
“Civic indignation is a growing trend across the country, as shown by this event in Kgetleng,” says Tim Tyrrell, project manager at the Organisation Undoing Tax Abuse (Outa).
“In this case, residents approached the court because they were being forced to pay for services that were not being delivered. They decided to ask the court for permission to take over those services, and the court agreed.
“This is an encouraging sign that courts are alert to the problems facing communities and are trying to come up with solutions that ensure services continue uninterrupted – as required by the Constitution.”
In other parts of the country, tax revolts in dysfunctional municipalities are either underway or being contemplated. That’s the subject of the next instalment.
Nelson Mandela Bay Municipality says it wants its trucks back and will settle the bill, while government steps in to save Kopanong’s assets being auctioned by municipal workers union. From Moneyweb.
The Democratic Municipal and Allied Workers Union of South Africa (Demawusa) last week attached assets belonging to the Nelson Mandela Bay municipality over an outstanding R8.8 million in pay owed to 36 workers.
The outstanding payment dates back to 2015 for the workers who were insourced immediately after the Labour Relations Act amendments, which require temporary workers to be permanently placed after three months.
The assets attached include a fleet of trucks as well as other vehicles. The loss of these vehicles would be devastating for the Nelson Mandela Bay municipality and its already crippled service delivery.
The 36 workers were employed in a call centre operated by the municipality, but had been short-paid since 2015, according to Demawusa coordinator, Siphiwo Ndunyana. “Most of these workers started as early as 2009 but were deemed to be permanently employed from 2015,” he said.
A dispute was declared in 2019 and was referred to arbitration, resulting in the workers being granted backpay of R8.8 million which had to be paid by December 15, 2020.
“The municipality ignored this legally binding award and did not pay the workers. As a fighting union, we are taking this to its logical conclusion. We do not want municipalities to smile at the expense of workers,” says Ndunyana.
The union called a halt to the auction as it says the municipality had agreed to settle the outstanding payments within a few days.
Nelson Mandela Bay municipality is in a stand-off with National Treasury, which has withheld R1.6 billion in conditional grant funding from the city, because of its failure to elect a mayor and a properly qualified municipal manager. Last week Eastern Cape DA leader Nqaba Bhanga was elected mayor, after two years in ANC hands. The city burned through 10 municipal managers in those two years. Bhanga blamed the ANC for breakdown in service delivery and promised to return order and good governance to the city.
A similar dispute to that in Nelson Mandela Bay was playing out in the Free State this week, when South African Municipal Workers’ Union (Samwu) was ordered to halt the auction of assets belonging to the Kopanong municipality. In 2017, the union secured a high court to attach the municipality’s assets to recover more than R58 million in unpaid pension fund contributions. SABC reports that the auctioning of the assets was halted after government obtained a stay of execution, arguing that the planned auction did not follow proper procedures. Kopanong has been mired in controversy for years for failing to pay its bills, prompting the DA to call for the dissolution of the municipality.
This is not the first time a municipality’s assets have been attached as a way of collecting outstanding debts.
Last year Eskom attached 139 farms worth R2.5 billion from Matjhabeng municipality in the Free State for unpaid electricity bills, and also went after furniture, cars and other equipment in settlement of a R2.3 billion arrears bill owed by Emfuleni municipality, south of Johannesburg. The utility also went after the bank accounts of Maluti-a-Phofung municipality in the Free State in pursuit of an outstanding bill of R5.3 billion, but later agreed to release some funds to allow it to pay salaries and other costs.
Dysfunctional municipalities that have been run into the ground are facing revolt across the country. In the next instalment we’ll look at some parts of the country where residents have had enough and are taking matters into their own hands.
Demand from retail and institutional investors has created a supply shortage, which could mean trouble for those shorting bitcoin. From Moneyweb.
The war between Wall Street and retail investors may have started with GameStop, but it won’t end there. The field of battle has moved on to silver and, perhaps, bitcoin.
Hedge funds shorting GameStop – effectively betting the share price would drop as this dinosaur gaming business slowly shut its doors – got beaten to a pulp when day traders on a Reddit forum coordinated buying to drive the price up from around $17 to $347 before it dropped again to around $90. The Reddit crowd did it for fun and for profit.
Based on the commentary around this, most people enjoyed seeing short sellers get the eyeballs squeezed out of their skulls. This may not be a passing fad. The Reddit crowd has gained millions of enthusiastic followers, and is now on the hunt for other hedge funds to beat up. Their attention moved to silver, which rallied 13% to over $30/oz earlier this week before running out of steam as the #silversqueeze hashtag trended on Twitter.
And then there’s bitcoin. Take a look at the following graph showing the number of open short positions by hedge funds on bitcoin from the Chicago Mercantile Exchange (CME). Funds have increased their short positions to about $1.4 billion just as the bitcoin went on its parabolic run above $40 000 earlier this year.
Source: Chicago Mercantile Exchange
What’s clear from the above chart is that hedge funds are on their own on this shorting expedition. Asset managers and other investors have not significantly increased their short positions, possibly because some heavyweight institutions like MicroStrategy and Square have boarded the bitcoin train, while reputable banks like JP Morgan think it could ride as high as $146 000 in the long term. The global head of CitiFXTechnicals says a move to $318 000 by December 2021 is possible based on a study of the charts.
Betting against that kind of institutional heft could land you in trouble.
The following chart shows the volume of CME futures long bitcoin (in other words, expecting a price rise). Hedge funds are again the biggest players, but only to the tune of about $600 million, versus the $1.4 billion betting on a drop in price. But what’s more interesting about the chart below are the number of asset managers and other investors going long bitcoin. In this case, the hedge funds are not drastically out of line with sentiment among other groups of investors.
Source: Chicago Mercantile Exchange
While the Reddit traders taking hedge funds to the shredder over GameStop saw this as a blow against the evil Wall Street empire, bitcoin is already seen as a cradle of rebellion.
The early adopters backed bitcoin because they saw that governments and their boomer parents had trashed the financial system and bitcoin was a way of fixing the problem. There will only ever be 21 million bitcoin issued, unlike fiat currencies such as the US dollar which are being fire-hosed into circulation – apparently without limit.
Technically, bitcoin is at a crossroads and needs to break above $38 000 to continue its bullish trend, according to this analysis. A failure to maintain price levels above $34 000 could push it into a bear trend, with support at $19 000. Over the medium and longer term, however, the outlook for bitcoin remains positive, so betting on a long and sustained drop in price could be disastrous.
And, as the GameStop saga has demonstrated, there is a motivated army of amateur investors willing to take on hedge funds and beat them at their own game.
Ciaran Ryan with Nompu Siziba on SAFM discussing why the Financial Sector Conduct Authority (FSCA) has issued a health warning on cryptos.
Anything from 4% a year on bitcoin and 10.4% on Tron. From Moneyweb.
It’s been a great year for cryptos, with bitcoin up more than 300% over the last year and Ethereum up 700%.
These gains have been so exceptional that the idea of earning a return of 4% or even 10% seems trivial in comparison. That would be a mistake. Earning interest on cryptos is becoming huge. It’s called ‘staking’ in crypto-speak, but it works much like you would earn interest on deposits with a bank.
In January, AltCoinTrader launched its EasySave facility offering annual returns of 4% on bitcoin, 4.4% on Ethereum, and as high as 10.4% on Tron. In the last three weeks the volume of cryptos at AltCoinTrader gathering interest has grown to R62 million, and is expected to hit R100 million in the next few weeks.
“The majority of people who own bitcoin or Ethereum have little intention of selling them, so this is a way that they can now earn a passive return on their cryptos,” says Richard da Sousa, founder of AltCoinTrader.
One of the benefits of ‘staking’ your crypto coins is that you can see interest being earned within about 15 minutes.
You can also earn 7.32% on USD Tether, which is a stable coin backed 1:1 with the US dollar. You can claim the interest on a daily or weekly basis and can reinvest the interest to compound the gains.
Those who bought bitcoin at R200 000 a few months ago and stake their coins at the current price of R550 000 are earning close to 10% on their original investment amount.
Until recently, most cryptos were sterile assets in that they earned no return. That’s changed with the rapidly evolving financial ecosphere known as decentralised finance (DeFi), which offers alternative ways to lend, borrow and earn interest using cryptos – completely outside the banking system.
Staking involves placing your cryptos with trusted third parties in return for rewards, with no fixed lock-up periods. You can ‘unstake’ your cryptos at any time in the event you want to sell them or use them for some other purpose.
Last year Luno launched a new savings wallet offering customers interest of up to 4% a year on their bitcoin holdings. Interest is paid monthly and there are no fixed terms or administrative fees.
Staking is not risk-free, though the risks are relatively contained. The cryptos are invested with carefully vetted and trusted third parties, so the risk is that the third party goes bust. Da Sousa says every effort has been made to minimise the risk by investing only with the most financially robust third parties.
AltCoinTrader’s interest rates on cryptos
The largest crypto-based lending platform in the world is BlockFi, which offers 6% annual returns on the first 2.5 bitcoins on deposit, whereafter the rate drops to 3%. It offers 5.25% on Ethereum and 9.3% on USDT.
Da Sousa says the reason AltCoinTrader is able to offer 10.4% a year on Tron is that the company has accumulated a large holding in the crypto coin and is therefore not reliant on outside parties to generate a return.
“We will be able to hold our interest rate on Tron at 10.4% for some time, but at some point we expect this to drop more into line with market interest rates for this coin, about 7%.”
As more people acquire cryptos with a view to holding for the long term, staking is likely to become a huge business. The market cap of all cryptos now exceeds $1 trillion, with most bitcoin and Ethereum owners opting to hold on for the long haul. That’s a huge volume of wealth ready to be applied to other money-generating projects within the crypto universe.
Goldman Sachs sees the buds of a new commodity super-cycle taking root. From Moneyweb.
Goldman Sachs sees the beginnings of another commodity super-cycle of the kind that was rudely interrupted by the 2008 financial crisis.
That scenario is predicated on a green industrial revolution, with policymakers prioritising the goals of full employment and increased income for low-income households, which in turn will drive demand for commodities and power a capex-driven recovery.
It’s a bold call by the bank, and not one shared by everyone. A good bellwether for industrial production is the copper price, up more than 30% over 12 months. Copper currently sells at around $8 000 a ton, but Goldman Sachs sees it rising to $10 000 a ton by 2022 as Covid restrictions are relaxed and industrial demand gathers pace, first in China and then spreading to the rest of the world.
Prices of other commodities like oil, coal, aluminium and tin have been resurrected from the February 2020 Covid slump as tentative signs of economic recovery .
It’s worth noting that copper and the raw materials index are closely correlated to emerging market stocks. If that’s the case, and Goldman Sachs is correct, the JSE over the coming years may be a less risky bet than many believe.
Copper price in USD – a bellwether for global industrial demand
And then there’s this chart from Janus Henderson Investors showing we are in the early stages of a commodity cycle that may extend for another 25 years. The last financial crisis in 2008 prompted an orgy of financial stimulus from central banks around the world, though most of this ended up in the pockets of higher-income groups. Very little filtered down to poorer households.
Source: Janus Henderson Investors
Goldman reckons the post-Covid recovery is likely to be accompanied by pro-poor policies that should stimulate demand for houses and accompanying infrastructure, and rising wages.
Is there a danger of a repeat of the 2008 collapse? Goldman Sachs sees the current environment as similar to the US super-cycle of the 1970s rather than the 2000s, where massive wealth creation under the rubric ‘War on Poverty’ created the world’s largest middle class.
The coming super-cycle is further undergirded by chronically low investment in commodity supply, which will have to be rapidly rectified.
China has been buying up stocks of metals such as aluminium and iron ore, and that’s benefitted companies like Kumba which reported earnings before interest tax, depreciation and amortisation of R17.4 billion at an astonishing 55% margin – with most of its product destined for China and the Asian markets.
Four years ago, obituaries for South African mining were everywhere in evidence, in large part because of a dysfunctional mining ministry ready to sacrifice a key economic sector on the altar of transformation and political meddling. With commodity prices now surging and mining keeping the country’s balance of payments in some kind of equilibrium, mining has reasserted its muscle in the economic life of the country.
The chart below shows the JSE Mining Index (blue) against the All Share index (red). The extraordinary gains in platinum stocks over the last two years is explained by the move by governments to tighten air pollution regulations. Stocks like Implats and Amplats helped keep the JSE All Share index afloat. Nine out of the 20 largest stocks on the JSE are miners, with stocks like BHP and Anglo American doubling since the Covid crash of March 2020.
It’s clear that mining is back. And if Goldman Sachs is correct, it will be around for a while.
JSE All Share Index versus JSE Mining Index
Former JSE chief Roy Andersen and Nonkululeko Gobodo step in as caretakers until new board is appointed. From Moneyweb.
Finance Minister Tito Mboweni has dissolved the entire board of the Independent Regulatory Board for Auditors (Irba), the finance ministry announced on Thursday.
The statement says Mboweni met with the Irba board of directors on January 26 to be briefed on the position the board had taken in the appointment last year of Jenitha John as CEO, a position she assumed in June 2020.
John’s appointment as CEO of Irba was heavily criticised at the time, as she had been head of the Audit and Compliance Committee at Tongaat Hulett when the group was involved in financial reporting irregularities. Tongaat had to write off capital and restate billions of rands worth of revenue in 2019 after previous management was found to be fudging the figures.
The finance ministry statement says that after meeting with the Irba board this week, Mboweni then engaged the directors over the dissolution of the board.
“After careful consideration and, amongst others, taking into account the resignation of a number of board members and challenges in the functioning of the board, the minister dissolved the BoD (board of directors), in line with section 12(5) of the Auditing Profession Act (APA). The BoD indicated that they respected the minister’s decision in this regard and they thanked the minister for the opportunity to serve on the board. The minister expressed his appreciation to the BoD and wished them the best in their new endeavours. This decision was taken in the best interest of the institution and the auditing profession.”
It was an open secret that the Irba board was in disarray after John’s appointment, with several board members resigning in recent months. Organisation Undoing Tax Abuse (Outa) raised concerns about John’s appointment last year, and the fact that a CEO charged with safeguarding the integrity of the audit profession may herself come under Irba scrutiny for her role at Tongaat.
“This put Irba in the peculiar situation where it may have to investigate its own CEO,” said Outa CEO Wayne Duvenage. “Our concern has always been that Irba chose to bring in someone as a CEO who had too many unanswered questions around her. We also had concerns that three former board members involved in the decision to appoint her were reappointed to the board last year.
”When the new board is appointed, we believe it should review the old board’s decision [to appoint the new CEO].”
Sources in the accounting profession say John, who stays on as CEO of Irba, has been making good progress in cleaning up the audit profession, but has been stymied by a fractious board. They point to Irba’s public displeasure at the soft penalties meted out by its own disciplinary committee to Twalizidanga Jordan and Danie Crowther over the 2013 audit of African Bank, which was placed under curatorship in 2014.
The African Bank auditors were found guilty of improper conduct on several counts, were fined the maximum allowable R200 000, but their names were not removed form the auditors’ register. Irba said its call for stiffer sanctions for errant auditors was answered when the Parliamentary Standing Committee on Finance approved the Auditing Profession Act Amendments (APAA) which would allow for harsher penalties in future such cases.
Nonkululeko Gobodo and Roy Andersen will be appointed to act as caretakers at Irba until a new board is appointed, which must happen within three months. Andersen was formerly president of the JSE, chairman of EY and CEO of Liberty. In 1987, Gobodo became the first black female chartered accountant in South Africa, led a merger of two medium-sized black accounting firms to form SizweNtsalubaGobodo, and has since gone on to found a consulting company.
The finance ministry says the caretakers will be required to assist with the smooth running of Irba until a new board is appointed, and to assist the Minister of Finance with the appointment of a new board.
Domestic worker ploughed her life savings of R25 000 into MTI and failed to withdraw her money before the company collapsed in December. From Moneyweb.
Of the many dozens of emails received by Moneyweb after the collapse of failed bitcoin investment scheme MTI, the story told by Nokuthula Makhanya is perhaps the most gut wrenching.
Makhanya is a domestic worker, and a single mother of two daughters, originally from Durban, but now working in Cape Town.
This is what she wrote: “I’m a MTI member. I joined on June 21 (2020) with $1 500 of my domestic money. Now I’m sending this email as I am left with nothing. Day in, day out I really don’t know that I can make it to the next day. I (would) like to know if there is any hope that I can get my money back from MTI.”
We had to break the harsh news to her that MTI is in provisional liquidation, and that she would have to submit a claim like tens of thousands of other members hoping to get something back, and that it would likely take a long time.
n June last year she was introduced to MTI by a previous employer who referred her to Ella (surname withheld at her request), who helped her sign with MTI, a bitcoin investment scheme that promised investors returns of up to 10% a month using a computerised trading system.
The Financial Sector Conduct Authority (FSCA) has found no evidence of any successful trading at MTI, computerised or otherwise.
Makhanya had accumulated savings of about R25 000 after working for five years as a domestic, and had planned a trip to Nigeria in December 2020 to visit a friend she had met in Cape Town. The expected earnings from her MTI investment would help make it an especially joyous Christmas there.
Ella explained how the MTI system worked and encouraged her to open an account in her own name, and that she could accelerate her account growth by introducing others to the scheme, which she did – a friend and her daughter. She funded her own account to the tune of $300 and a further $200 for each of her daughter and the friend, making a total ‘investment’ of $700.
Makhanya later transferred another R10 000 to MTI. She was able to access the MTI dashboard on her phone, and could see her 0.1174 bitcoin reflected in her account.
To invest in MTI, you had to purchase bitcoin and then ship that off to a ‘wallet’ controlled by MTI. Makhanya transferred her funds to Ella who purchased bitcoin on her behalf and then shipped it off to MTI. The two are no longer communicating, pointing the finger of blame at each other. Ella says she tried to assist Makhanya on several occasions to withdraw funds, but on each occasion she refused – until it was too late.
By October MTI was swirling in controversy. The FSCA had issued a statement urging investors to ask for their money back because it was operating without the required financial services provider licence.
Makhanya knew nothing about this. She says her only source of information was the MTI ‘dashboard’ on her phone which reflected steady growth in her account. But she wanted to get access to her funds, knowing that she had a trip to Nigeria coming up, and would need some spending money.
Makhanya was told that her funds would be released in a few days. That never happened, it seems because she did not know the process involved in withdrawing money, despite the efforts of Ella and others to help her.
Then she found out that MTI was a scam, and that its CEO Johann Steynberg had skipped the country and that the company was provisionally liquidated.
“I had to cancel my trip to Nigeria, which I was looking forward to. I really don’t know what to do now. That was all the money I had.”
We reached out to Ella, who also has her own interesting story to tell. She ran a small restaurant in Cape Town which was shut down due to the Covid lockdown crisis from March 2020. Unable to pay her rent due to the lockdown, the landlord booted her from her premises, leaving her without a source of income.
Ella explains that a restaurant customer got her to invest $100 in MTI in January 2020. After the restaurant was shut down in June 2020, she happened to open her MTI account online and noticed her account had grown to $1 000.
Ella used her $1 000 to open MTI accounts in the name of her daughter and other family members. The profits she made from MTI allowed her to survive one of the most difficult periods of her life.
“There was a lot of beauty in MTI and it helped tens of thousands of people lift out of poverty,” says Ella. “People are accusing Johann of stealing the money and running away with it. There is no evidence to show this. The Johann I met was a caring, humble, generous and kind person, who only wanted the best for everyone. He was charitable, donating to many different entities, and he always paid above and beyond what was needed. I would be delighted to see him return, tell the truth and give everyone’s bitcoin back.”
Now that MTI is in provisional liquidation, Ella has launched a new business to support herself and her daughter.
What does she make of the FSCA’s finding that there was no evidence of successful trading?
“I am super shocked. On the other hand, I don’t see evidence of there being no trades. Whenever there was some negative news about MTI,. Cheri (Marks, marketing executive at MTI) would send out a voice message on Telegram saying there was nothing to worry about, and that there were forces out to shut down MTI.
It’s clear that Makhanya and Ella have entirely different views of their experiences with MTI. There are thousands more like them with stories just like theirs.
That liability falls to the driver of the towing vehicle. From Moneyweb.
Trailer hire companies are clearly fed up with the mountain of traffic tickets accumulated by customers parking illegally, ignoring red lights and otherwise breaking the laws of the road.
For years, the police have been pinning the blame on trailer hire companies for offences committed by customers. This has created all sorts of difficulties: arrest warrants have been issued against the trailer owners, and traffic authorities have refused to issue renewal licences for their trailers or to renew drivers’ licences until all outstanding fines have been paid.
All of this came to a head earlier this month in the Supreme Court of Appeal when the minister of transport went head-to-head with Brackenfell Trailer Hire over the government’s interpretation of the National Road Traffic Act (NRTA). The act presumes the owner of an offending vehicle is also the driver in a case where the actual driver cannot be identified.
Brackenfell, which has 3 000 trailers for hire, originally argued before the Cape High Court that it could not be held responsible for the misbehaviour of customers, and the court agreed.
The minister of transport’s legal counsel argued that a trailer fell under the definition of ‘motor vehicle’ in the NRTA, which meant traffic authorities were within their rights to hold the trailer owner liable for offences.
Not a ‘motor vehicle’
“It is as well to remember that a ‘trailer’ is defined as a vehicle which is not self-propelled but rather designed or adapted to be drawn by a motor vehicle,” says the judgment.
Between the Cape High Court and the Supreme Court, there was much discussion about the dictionary and legal definitions of words like ‘drive’, ‘vehicle’ and ‘tow’.
Traffic authorities rely increasingly on surveillance cameras which often capture only the trailer number plate, not the towing vehicle. This left Brakenfell Trailer Hire and two other respondents to pick up the tab, and deal with the arrest warrants, for offences committed by customers.
“In those circumstances, the prosecuting authorities in whose area of jurisdiction the traffic offences concerned were committed, institute criminal proceedings against the owner of the vehicle whose registration number is depicted on the photograph, in this instance the trailer that is in tow,” reads the Supreme Court judgment.
Redirect process easier said than done
The Criminal Procedure Act allows for a ‘redirect process’ where the recipient of a traffic notice can provide prosecuting authorities with the particulars of the person driving the vehicle, but this is an imperfect system that often results in injustice.
Brackenfell and the other respondents were confronted with numerous arrest warrants for offences committed by customers. The impact of this was compounded by the fact that licensing authorities imposed an embargo against them renewing their drivers’ and motor vehicle licences.
The minister argued that trailer owners could use the redirect process in cases where a third party driver committed an offence. Where a trailer number plate obscures the plate of the towing vehicle, the trailer owner is the primary target for prosecution.
The Supreme Court dismissed the minister’s appeal against the earlier Cape High Court ruling, with costs.