Inside the Belly of the Beast: The Real Bosasa Story by Angelo Agrizzi & Phillipa Mitchell

Author:Angelo Agrizzi & Phillipa Mitchell [Agrizzi, Angelo & Mitchell, Phillipa]
Language: eng
Format: epub
Publisher: Truth be Told Publishing
Published: 2020-11-03T05:00:00+00:00

In 2008, Gavin made a particularly disastrous investment in a company called Dealstream. While nobody had heard of the company, other than the fact that it was owned by a certain Russell Leigh, Gavin told us that he had it on good authority (from his twenty-something-year-old nephew, Daniel) that we would be crazy not to invest in the CFDs that Dealstream had on offer. I was incredulous at how the Watson nieces and nephews appeared to be able to dictate to their parents where to invest and in whom to trust.

Gavin planned to sink a staggering R68-million in these CFDs. Andries van Tonder and I did a brief risk test on the company. We called in Carlos Bonifacio and David Janks. They both shook their heads, saying there was no way we should proceed with the transaction.

Gavin was furious. “You will do it,” he said, before adding, “In fact, I’ll sign it off myself.” Which he did.

Over the course of two months, Dealstream leeched a total of R68-million out of Bosasa. One Thursday morning, Russell Leigh phoned Andries van Tonder asking for a further R10-million payment. Instead of transferring the cash, Andries decided to take a trip to Russell’s offices, only to discover that Russell was on a one-way trip to Israel. The JSE later declared Dealstream in default of its future clearing agreement, and the company went belly-up. All the investors took losses in the Dealstream debacle – including Gavin’s wife, Kevin Wakeford, Valence Watson, other Watson family members and even Lindie Gouws – and were required to pay in on the taxes, but it was Bosasa that ultimately paid for those losses.

Due to the easy availability of cash, these schemes and deals were never tested or verified. Had somebody taken the time to calculate the actual values and feasibility of these deals, ninety percent of them would probably never have gone ahead. But R68-million wasn’t big money for Gavin. He wasn’t interested in the day-to-day amounts that were floating around in the company’s coffers. He always had a bigger picture in mind. Unfortunately, it was this big-picture thinking that put a serious strain on the company’s finances on more than one occasion.

Some of the trading was so reckless that we were forced to extend our payment terms to suppliers – something that we were always dead set against doing. When things were tight, particularly in 2011, Andries van Tonder and I bonded our houses to raise cash to pay salaries and wages, giving the company breathing room until the following month when our cash flow would be freed up again.

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