Business Shows How to Deal with Graft
DORBYL's disgraced former executive director, Edwin Vorster, has been ordered to repay the company almost R43 million, money that the courts have found he effectively stole, mostly by way of "secret profits".
Vorster lost his job some years ago after Dorbyl discovered what he'd been up to during a period of unbundling. He and fellow official Rob Duff were investigated by the Scorpions, but while Duff has since settled with Dorbyl, Vorster contested the company's claim against him and the matter went to court.
Argued earlier this year before Judge Dimpheletse Seun Moshidi in the Johannesburg High Court, the matter has now been finalised. The company asked that the court order Vorster to "disgorge" secret profits he obtained "in breach of his fiduciary duties". These profits amounted to virtually R37m.
In addition Dorbyl wanted irregularly obtained "disbursements" of R316 000 to be repaid, with R4.5m paid to Vorster by way of a management participation scheme.
The court found that Vorster had breached key rules and ethical standards. Under his contract with Dorbyl, he was not allowed to do paid outside work without Dorbyl's written permission. Vorster nevertheless took part in a number of deals, for which he was paid considerable sums, without the company's knowledge, let alone its go-ahead.
Listed as an elite "category 1 executive", Vorster would profit handsomely by overseeing Dorbyl's "refocusing process". Yet while he owed the company a fiduciary duty to ensure he acted in its best interests, he did not disclose the millions he was making from purchasers of Dorbyl's assets through the agency of IFS Consulting.
Vorster claimed he was paid by the new purchasers for consultancy work but Judge Moshidi did not believe him, saying Vorster only offered value during discussions about the sales when he was a member of Dorbyl's negotiating team.
It was highly unusual, said the judge, that Vorster, as a full-time member of Dorbyl's board, "participated in discussions leading up to the approval or otherwise of a proposed sale, whilst the other members of the board did not know that (he) had a very real interest in the purchaser whose transaction was under discussion".
Vorster owed a fiduciary duty to his employers, but did not inform them of the offers made to him by IFS on behalf of the would-be buyer and took the benefits for himself without Dorbyl's consent. …