Protector finds against NEF

The National Empowerment Fund (NEF) CEO must pay "sorry money" to a woman it withdrew a grant from, a report by Public Protector Thuli Madonsela has found.

The NEF had given "Ms N" final approval to invest R5 million in her business, but later withdrew it because she did not qualify as a "black person" under the Broad-Based Black Economic Empowerment Act, according to the report "Stringed Along" released on Tuesday.

The definition of a black person in the act includes African, coloured and Indian people who are citizens of the country by birth or descent, as well as a person who acquired citizenship by "naturalisation" prior to April 27, 1994.

Ms N was previously a Zimbabwean national and was naturalised in 1999.

"The finding is that her citizenship should have been checked up front," Madonsela told reporters in Pretoria.

"The CEO of the NEF must within 30 days of this report consult with the complainant in the determination of what the UK ombudsman calls 'sorry money', which is money given to a person as consolation for mishaps caused and experienced."

She clarified that Ms N was not given the grant upfront.

"She was given a letter indicating that her application has been accepted. The NEF will have me believe that the conditions [in the letter] was that they were still going to check her ID," Madonsela said.

"That can't be right. Triaging is something that was supposed to happen on contact... The NEF dropped the ball."

Madonsela said since the woman assumed she was going to get the cash injection from the NEF she did not look for other sources of money for her business, Best Care Medical Supplies.

She then incurred expenses. The NEF had also opened a credit facility with her, before withdrawing the grant.

"This is financial prejudice and emotional prejudice. Ms N called all the time, crying, threatening suicide. She is not in a good place," Madonsela said.

"[However] there was no obligation to give her the grant. In fact it was unlawful to give her the grant because she did not qualify. The NEF should do proper due diligence."

Madonsela said the woman's business had been liquidated.

She said in her report that the NEF had to apologise to Mrs N within 14 days of the report's release, and provide her office with a copy of a written apology within 30 days.

 

(File photo: Gallo Images)