Biofuel company Ethanol Africa and its 50% shareholder Sterling Waterford Holdings have distanced themselves from allegations by maize farmers that their financial investments into the company have gone missing. A weekend newspaper reported recently that enraged farmers belonging to Grain Alcohol Investments (GAI), a 25,1% shareholder in Ethanol Africa, demanded the company release information about its R24-million investment in the project. The farmers didn’t invest cash, but put up the money in the form of silo certificates.
Gregor Paterson-Jones, CEO of Sterling Waterford Holdings, said his company has full confidence that the funds in question have been correctly accounted for. “Any contrary statements are not true,” he said, adding Sterling Waterford is pleased with internal controls at Ethanol Africa. Ethanol Africa managing director Joe Kruger said even though GAI is a shareholder in the company, it cannot be held responsible for disputes within GAI. According to the report, GAI is required to hold annual meetings, but a group of farmers became suspicious when GAI failed to convene any meetings in two years. The farmers approached the registrar of companies to complain about GAI. I n a meeting which followed between GAI and farmers it emerged that farmers’ money was transferred from GAI to Ethanol Africa. However, Ethanol Africa refused to disclose information about the money.
Some investors fear the project has failed and they’ve lost all their money. Some farmers are also reportedly considering legal action. Kruger said Ethanol Africa adheres to strict internal financial control and delivers management reports to all stakeholders. In addition, audited financial statements are available to all stakeholders on request. “The company is committed to good governance,” he said. Kruger said the initial funding for Ethanol Africa was supplied by key shareholders such as Sterling Waterford and GAI, which went towards financing the first phase of the project, which includes engineering and design, planning and the development of the site as a basis for the construction of its first biofuel plant in Bothaville, Free State. – Wilma den Hartigh
