Provisional liquidation of NMC puts spanner in wheel of KPMG office building

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Cape Town – The provisional liquidation of NMC Group has placed a question mark on when KPMG would be able to move into its new offices on the Foreshore in Cape Town.

Fin24 reported earlier that, if all went well, KPMG would have been able to move into its new offices in a few months’ time. This timeframe is now not so certain anymore.

NMC, the main contractor on the building, was placed under provisional liquidation this week after an attempt at business rescue failed.

Phase 1 of the R550m development of the new building was supposed to be on track for completion by the end of April 2018. This phase consists of offices and ground floor shops.

Last week, when NMC was still in business rescue, the expectation was that the overall completion of the three residential floors of the 23-storey building would be completed at the end of July 2018.

Scott Taylor, a representative of Ziningi Developments, which owns the new building, told Fin24 on Thursday that they are assessing the rammifications of NMC’s provisional liquidation. He indicated that there are “complexities” in building contract that has to be dealt with.

None of the contact numbers of NMC at its offices in Johannesburg, Cape Town, Bloemfontein, Port Elizabeth and Durban worked anymore by Thursday and a sub-contractor confirmed that it went “off line” on Wednesday. The business rescue practitioner of NMC told Fin24 that he is not in a position to make any comments to the media at this stage.

Making plans

Dave Williams-Jones, CEO of FWJK Developments, who is also involved in the development of the building, told Fin24 that the intention remains to continue with construction as soon as possible.

“We are making plans to handle the impact of NMC’s provisional liquidation,” he told Fin24 on Thursday.

Lance September, managing partner at KPMG, told Fin24 on Thursday that they have been informed about NMC’s provisional liquidation.

“We will now just have to wait until we are informed of when we would be able to move in,” he said.

Many Capetonians were wondering whether what seemed like a sudden halt in the construction of the building, had anything to do with an investigation launched by KPMG International of its SA operations as a result of information contained in the #GuptaLeaks.

It also seems that some of the KPMG logos, which used to be prominently displayed on the building, have been removed.

In the past KPMG did some work on behalf of the Guptas as well as for the SA Revenue Service (SARS). A KPMG SARS report was used by the Hawks and the National Prosecuting Authority in launching an investigation into a so-called SARS rogue unit, with former finance minister Pravin Gordhan being “implicated” in the report. However, KPMG later said it was wrong.

KPMG SA said it regrets that its association with the Guptas and their business entities went on far too long.

NMC

According to NMC’s website, the company was founded in 1983 and established itself as “a niche Western Cape-based industrial contractor with a national footprint”.

In 2004 it entered into a BBBEEE agreement with F’Stars, a black women-owned company entity. The partnership changed its leadership and shareholding structure, aligning it to SA’s transformational objectives, according to the website.

The empowerment deal was regarded as providing new business growth opportunities.

Bizcommunity reported in October 2017 that Phila Jordan – described as a private investor in the mining and construction industry – became the new executive chair of NMC Group when he bought a 51% stake. This took the company’s BEE ownership to 63%.

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