Media Blapse Turns Reddy's Booming Business To "Bust"
Far from being in trouble, top KZN business projects profit of R225m.
Leading KZN businessman Vivian Reddy has reacted strongly to media reports that his companies are in trouble. The colourful entreprepreneur was a victim of mistaken identity as EJ Power, which is R83m in the red, was confused with Reddy’s Edison Power, which appears to be in very good health.
An article published in the Mercury on Tuesday was picked up by wire service SAPA and widely republished, including by Moneyweb in its Fast News section where wire copy is carried. Reddy took out an advert in the offending newspaper which ran the original article under the headline Bid to Wind Up Reddy Business. In the advert Reddy calls the headline “highly defamatory, disingenuous and devoid of truth.”
Reddy says his Edison Power Group, which employs 2 000 people, has an order book of over R1,5bn and projected profit of R225m. He writes “In its 34 year history the business has never once attracted any form of negative sanction.” The advert also carries testimonials of Edison’s soundness from Bidvest, FNB, Group Five and others.
Vivian Reddy tipped us off this morning in an email to Moneyweb’s editor in chief which reads:Dear Alec,
Your issue of Moneyweb of the 4th September 2012 is headlined “Vivian Reddy’s company R83m in red”.I wish to state that your headline is devoid of any truth.
E J Power (Pty) Ltd is not my company or part of the Edison Power Group nor am I a
Director of that company.
The company was not founded by me in 2005.
We were a passive investor and sold our shares in that company.
I enclose a letter from the Attorneys for E J Power (Pty) Ltd clarifying the matter.It will be appreciated if you corrected the misleading headline and remove my name or Edison from the article.
He also attached a letter from Afzal Lahree Attorneys which reads:
Business Rescue Application: EJ Power
We address you regarding the business rescue application instituted against the aforementioned entity, specifically for purposes of confirming that neither Edison Power (PTY) Ltd), The Edison Group (Pty) Ltd or Vivian Reddy have any interest or involvement in the aforementioned entity by way of shares or directorship and that the outcome of such proceedings will in no way have any effect on the companies referred to above or Vivian Reddy.
Moneyweb’s Alec Hogg responded to Mr Reddy as per:
Thanks for clarifying the Sapa article which quoted The Mercury and which our editors published in good faith on Moneyweb.
We will publish your email and letter attached to ensure the situation is corrected.
Here is the incorrect article:
Vivian Reddy's company R83m in red
Banks have frozen EJ Power's overdraft facilities.
A specialist electrical services supplier founded by businessman Vivian Reddy has debts amounting to R83 million, the Mercury newspaper reported on Tuesday.
According to the newspaper, directors of EJ Power, formerly known as Edison Jehamo Power, are attempting to prevent several winding up applications with a counter proposal that the firm trade its way out of financial trouble.
The banks have also frozen the company's overdraft facilities.
In an affidavit, director Simon Wilkinson said the company had R46m in assets. It owed creditors R18m, staff and the taxman R10m, and "concurrent creditors" (creditors and sub-contractors) R55m.
The newspaper reported that Reddy, who is known for connections with the ANC elite, including President Jacob Zuma, and the government deals his Edison group of companies has landed, founded EJ Power in 2005.
He had since resigned as a director, but his son Shantan Reddy was a director, according to the newspaper.
EJ Power specialises in maintaining powerlines and has contracts with Eskom and municipalities.