Thread by @SizweLo

In 1995, Sam Molope ran a vast network of mills and bakeries, employing thousands of people, and was bidding for a contract to supply hamburger buns to McDonald’s, which was looking to open its first outlets in South Africa. By 2001 he had lost most of his businesses. [🧵]

Sam Molope was born in rural Rustenburg in 1934. Like many Black people of his time, he left school prematurely to work at a bakery in Pretoria. He soon became indispensable to his Greek bosses because he could speak Afrikaans, English and several African languages.

Molope's proximity to the owners allowed him to learn the business: production, marketing and distribution enabling him to start his own bakery. He was the first Black man to own a bakery in 1978 after it had taken 8 years for the Apartheid government to permit him to bake bread.

Even with a permit, Molope was only allowed to operate in rural Bophuthatswana. He started baking bread in a small oven in a township backyard room until he secured a loan from the Bophuthatswana National Development Corporation to open the Ga-Rankuwa Bakery.

Within a few years, Molope had expanded to add Ru-Molope Bakery in Mabopane, Mamelodi Bakery, Atteridgeville Bakery, Crusty Bakery and Vita Foods with about 8000 employees.

To manage shareholding in his businesses, Mr Molope established a holding company, LS Molope Holdings, where he owned 100% of the shares. He then invested R1,2 million on properties in what is now the North West Province to produce wheat and flour for his bakeries.

In 1994, Molope, known as Bra Sam, was visited by a US delegation led by Congressman Ron Brown and the US Trade and Development Agency (USTDA). Molope showed them his plans for the flour mill and gave them a tour of the land he had purchased in GaRankuwa for this purpose.

The USTDA was impressed and gave Molope a $40 000 grant (R1.5 million today) to finance the necessary feasibility studies. The plan was to use the flour mill to supply his bakeries and package maize meal for wholesale.

On the other side, The USTDA saw the mill as a potential vehicle to serve the needs of US fast food companies in the region through a BEE company. Ga-Rankuwa Milling was to be a joint venture between Molope and the Black-owned Brooks Sausage Corporation of the US.

Molope further strengthened ties with US Wheat Associates, a US market development organisation for American wheat farmers whose main objective is to encourage the import of American wheat.

After the visit from the American investors, Molope was invited to the US, where he signed a deal with a company called Spruce Corporation which would put up $4 million in exchange for a 10 per cent share in Molope Holdings.

Molope was advised that as a condition of the deal, Spruce’s involvement in Molope Holdings would be through a man named Anthony Simon Bock. Bock later contacted Molope to introduce himself and offered to buy a further 40% share of Molope Holdings for another $4 million.

Bock’s proposal would leave Sam Molope with 50%, while the other half would be held by Spruce and Bock’s company, Dunbush Investment, an entity Bock used to negotiate shares in Molope Holdings.

Molope insisted that he wanted to retain 51 per cent, which meant Bock would buy 39% of Molope’s holdings. Bock accepted Molope’s conditions, and the deals with both Spruce and Bock’s Dunbush were signed in September 1994.

However, as the representative of both Spruce and his own company within Molope Holdings, Bock established Molope Group Investment, in which he, together with Spruce, controlled 50 per cent. Bock became CEO of Molope Group while Molope was chairman.

During all of this, Sam Molope continued to hold 100% shares in both Molope Holdings and the newly established Molope Group Investment, pending the payment for the 49% shares pledged by Bock and Spruce.

According to Molope, he was promised R6,6 million as a deposit. However, he alleged that Dunbush directors undervalued his property and assets by R5,7 million to avoid paying transfer duties and that the money due to him for the 49% shares in Molope Holdings amounted to R80M.

“Bock said the money to acquire the shares would be raised by Dunbush Investment through a bank loan, but I never saw a cent of this,” Molope said.

As CEO of Molope Group Investments (which he created), Bock started selling off some of the group’s assets to raise extra capital for other business ventures, including a mining services subsidiary, a security firm, food distribution services, and catering.

Among some of Molope’s businesses sold by Bock was Ru-Molope Bakery, which sold for R5 million. Molope alleged to have never seen any of the money from that sale. Bock told him that all of this was to “reposition the company and formed part of the restructuring process.”

When Molope confronted Bock about the money for the shares that were still unpaid, Bock and his co-directors, Michael Hirschowitz, John Michael Davies and Lazarus Mittel, insisted that Molope Group Investment Group be listed on the JSE to raise public funds and secure bank loans.

“I agreed to this on the grounds that my 51% in Molope Holdings and 100% in Molope Property Investment, which was not part of the deal, would remain untouched and that the chairman of Molope Group Investment be a Black person as my dream was to empower Blacks,” Molope said.

In 1996, Molope Group Investment was listed on the JSE. In August of the same year, Bock brought in the current president of South Africa, Cyril Ramaphosa as executive chairman, while Mr Molope remained non-executive chairman and director.

By the time Ramaphosa came on board, Molope Holdings had expanded to include interests in cosmetics, health services, fresh produce and property maintenance services. Bock introduced Molope to Ramaphosa at David Hirschowitz’s home.

“They said Ramaphosa had political clout and was very influential,” said Molope. “I had personally approached Wiseman Nkuhlu to become chairman of the group, but he was unable to take up the position”.

“I did not sign any agreement with Ramaphosa when he came in or negotiated his salary or gave him any power of attorney over my shares,” said Molope. By 2001, the Molope Group had collapsed, and Ramaphosa and Molope were in a bitter legal battle.

Molope blamed Ramaphosa for liquidating some of the group’s businesses and selling them to Rebhold, a company in which Ramaphosa was executive chairman and director. The businesses in question were sold to Rebhold for R300 million.

Molope disputed the deal and the valuation of the businesses and alleged that his shares in the Molope Group and other companies were pledged as collateral to a consortium of banks in exchange for a loan without his knowledge.

Molope brought criminal proceedings and a civil claim for R150 million against Ramaphosa in his personal capacity and as former chairman and chief executive of the Molope Group. Ramaphosa denied the allegations, saying Molope had signed away his shares as security to the banks.

“Sam Molope was present at the board meetings held on November 22, 1999, January 28, 2000, and May 17, 2000, at which unanimous consent was given by the directors, including Molope, for the disposal of certain of the businesses to Rebhold,” added Ramaphosa.

When Molope instituted legal proceedings against Ramaphosa, Rebhold and four banks—Nedcor, FBC Fidelity, The Business Bank and Mercantile Bank—these entities controlled the Molope Group.

Molope insisted he knew nothing of the R171 million loan, which resulted in Molope Group’s collapse or what the money was used for until after the group was sold to Rebhold.

“Ramaphosa and the other directors kept me in the dark and failed to inform me about meetings where such decisions were made. I was robbed. I’m going to fight Ramaphosa all the way until I get back what is rightfully mine,” Molope declared.

In 2003, Molope and Ramaphosa released a joint statement in which Molope said, “Mr Ramaphosa has been supportive and assisted me in ensuring that the outstanding issues between myself and the Molope Group are resolved.”

In the same statement, Ramaphosa said, “With the finalisation of the liquidation of the Molope Group all the outstanding issues regarding Mr Molope have been resolved and finally laid to rest.”