How greed sank a huge SA shipping deal


How greed sank a huge SA shipping deal

Fame and fortune were on the horizon – then it all went pear-shaped. 

South African entrepeneur Bernard Jacobs, who developed a top-notch ship ballast treatment system that would help prevent contamination of the world’s seas, was on the road to international fame and fortune until the greed of a local state-backed development trust fund put the kibosh on a multi-million-dollar deal with an international strategic partner.

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Submitted by : Bernard Jacobs on 2014-11-13 08:59:15
Hi Pieter

Thanks for your comments. You raise 3 interesting issues that I have been dealing with for a few years now.

PROSECUTION
I believe that I do have a case against the fund. This has been confirmed by council. However because of the structure and the current state of the fund, it is uncertain who would pay the claim. I guess it is normal that an investor (even though with the best intention) protects themselves against mismanagement of their investments. What amazes me is that the investor should in actual fact be doing a post-mortem on what happened to their investment ...... instead they hide this as not to discredit themselves or the "so-called" professionals they pay the big bucks to do their jobs. Whose to say that the conduct of the individuals managing the investors money is any different from what happened to the investment in our organisation. In saying that I am exploring some more options to try and see that the people responsible pay the price.

RESUSCITATION
I believe that the project could be resuscitated if we had the correct capital injection. Competing on an international market, to catch up to the competitors and instil confidence in the market place will take huge effort and funding. Again, I have not stopped looking for some investment ......


WMS PRESS RELEASE
The official version that I have from WMS is that they cancelled the license agreement was as per a clause of the contract that we had with them. It was cancelled because the company went into business rescue after Wellington Chadehumbe and his team came back from Oslo without reaching a deal and leaving the company with no other funding alternative. I believe that this is a standard clause in most license agreement that protects the licensee from having to deal with a company that has financial woes. This was very appropriate in our instance as the license agreement was mutually exclusive and WMS would not be able to provide any alternatives whilst the agreement was in force.

The press release included the text:
“The verification program showed that the system at this stage of development will not, in our opinion, provide our customers with an effective, fully compliant solution for the varied and dynamic water conditions encountered by a vessel engaged in global trade,”. You will note that the statement says "in our opinion" and is not base it on any other information. I believe that it was carefully worded to satisfy their customers without distorting any facts.

The statement that they made was not untrue. In order to achieve our certification of our system, we tested it in 2 out of 3 various water condition types. This is a requirement from the International Maritime Organisation and was the same protocol all other systems were tested (and approved) on. At the time of our negotiations with WMS, industry was raising concern that systems should also show efficacy in fresh water. As our system was tested at our test facility situated in the Cape Town harbour, we were unable to get sufficient access to a fresh water source. We were therefore unable to provide any FULL-SCALE testing to show fresh water results. We did have pilot models at much lower flow rates but could not satisfy the results needed to show a system operating at the required flow rates.

I must point out as well, that although WMS were aggressive in the cancellation of the license agreement, they must have been extremely frustrated when Wellington Chadehumbe and his team saw rather to try and squeeze money out of WMS without taking the requirements of the business into account.
 
Submitted by : Pieter John Roos of WIERDA PARK on 2014-11-12 09:56:28
Are the persons responsible for this "failure" going to be prosecuted? If Jacobs can find the funding, can the project be resuscitated? Is the following statement quoted in the story correct?: Traaholt said: “The verification programme showed that the system … would not … provide our customers with an effective, fully compliant solution for the varied and dynamic water conditions encountered by a vessel engaged in global trade.” Or is this a cover-up?

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