EFF: Rupert’s R1b COVID-19 pledge ‘a sophisticated loan shark scheme’

Johann Rupert
Image credit: Wikimedia Commons

The Economic Freedom Fighters (EFF) has slammed billionaire Johann Rupert for reportedly administering his R1 billion COVID-19 donation in the form of loans for small, medium and micro-sized enterprises (SMMEs).

In a statement on Tuesday, the party said this would “entrap” the SMMEs applying for funding into “un-repayable loans.”

It said, “Rupert is using one of his subsidiaries, Business Partners, a risk finance company, to set up a sophisticated loan shark scheme that will indebt [sic] SMMEs and ensure he secures long-term profits from a national disaster.”

‘Government must administer all donations’

The EFF said the government must administer all donations made by private individuals and entities and that these donations “should not come with any conditions.”

It added, “We call on government to disclose the exact details of all the pledges and donations made by the private sector, indicating what they are for and how they are going to be used to combat the rapid spread of coronavirus and the economic devastation of our people.

“We call on our SMMEs to not apply for any loan from the Rupert-controlled Business Partners because it will leave them in huge debts.”

According to its website, Business Partners was established by Anton Rupert, Johann Rupert’s father, in 1981. It was known as the Small Business Development Corporation Ltd (SBDC) at the time.

Donation ‘will not go back to Rupert family’

In an interview with CNBC Africa on Tuesday, Business Partners managing director Ben Bierman reiterated that the R1 billion donation will not go back to the Rupert family.

“It’s important to note that the money made by the Rupert family is a donation. None of this capital will ever flow back to the Rupert family again,” he said.

Biernan added that Business Partners will establish an online platform by the end of this week. The platform will outline eligibility criteria for SMMEs in need of funding.

He said smaller businesses affected by COVID-19 will get grants, which means they will not be obligated to pay them back.

Biernan added, “There will also be a loan component for bigger businesses to try and see if that can be repaid in the future.

“The initial interest-free period [with] no repayment obligations for those businesses will be approximately for 12 months, after which we hope that the major impact of the virus would have subsided.”

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