Report 73 Business Practices Committee

During the investigation into the business practices of VdDussen a number of documents concerning Omnisure came to the attention of the Committee. One of these documents was a copy of the minutes of a meeting held on 27 January 1996 at which the auditors reported on the financial position of the company.

The auditor quoted a number of figures to those present, who included VdDussen. The loss of the company increased from R378 000 on 28 February 1993 to an amount of more than R2 million on 30 June 1995. On 28 February 1993 the total remuneration of the directors of the company and its employees as a percentage of its turnover was 89 per cent. On June 1994 this percentage was 116 per cent. The auditor was of the opinion that a substantial irregularity ("wesenlike onreëllmatigheid") existed.

The auditor quoted from a shareholders agreement in which it was inter alia stated that VdDussen and onother director of Omnisure guaranteed a 50 per cent preference dividend to the shareholder. This guarantee, in the opinion of the auditor, was an unacceptable offer and aslo possibly misled the shareholder. It was also unacceptable because it did not apply to all shareholders. The auditors also expressed their concerns about the "buy back of shares guarantees" given to potential and existing shareholders.

On 29 September 1993 the auditors suggested that any loan to Omnisure should be approved by the directors at a board meeting. Nevertheless, only VdDussen signed loan agreements on the behalf of Omnisure. He did not have a proxy from the board to do so. This happened whilst Omnisure was allegedly technically insolvent. On 21 October 1993 VdDussen accepted loans to Omnisure to the value of R540 000. No loan agreements could be made available by VdDussen. It also seemed that some loans were accepted after verbal agreements. At an annual general meeting of Omnisure shareholders on 9 March 1996 VdDussen said that the other directors of Omnisure knew about the verbal loan agreements and that had a general proxy from other directors to do so. VdDussen maintained that this proxy was minuted. He did, however, not know where the minutes were. VdDussen resigned as director of Omnisure on 30 August 1994.

It is clear from this brief overview of some Omnisure activities that VdDussen was involved in "buy back of shares guarantees" during his involvement with Omnisure and at least since 1993.(24)