Johannesburg – A high-stakes legal battle is unfolding in the Joburg High Court as the business partnership between internationally acclaimed motivational speaker Vusi Thembekwayo and Rovian Justin Naidoo has spectacularly collapsed. Naidoo is accusing Thembekwayo of defrauding him of millions of rands, alleging a litany of broken promises and unpaid dues.
At the heart of the dispute are accusations that Thembekwayo failed to compensate Naidoo for his crucial role in securing a lucrative office rental deal, which purportedly saved Thembekwayo and his company, My Growth Fund Venture Partners (MGFVP), a substantial amount of money. Naidoo also claims that Thembekwayo neglected to pay him for services rendered directly to MGFVP.
Furthermore, Naidoo alleges that Thembekwayo reneged on a prior agreement to transfer 50% of MGFVP shares to him after Naidoo left his own successful company to join forces with the charismatic speaker.
The details of the fractured partnership have emerged as Naidoo seeks a court order to compel Thembekwayo and MGFVP to pay him over R13 million for the services he claims to have provided.
This significant sum is comprised of two primary claims: R5 million for the work Naidoo performed for MGFVP, and a staggering R8.7 million representing 50% of the savings he secured for Thembekwayo and his company through the advantageous rental agreement.
According to court documents, Naidoo asserts that in June 2021, he, Thembekwayo, and MGFVP entered into a verbal agreement to combine their skills and resources to create investment opportunities and raise funding for various projects.
The agreement stipulated that Thembekwayo and MGFVP would utilise the entity as the primary vehicle for creating and conducting investment opportunities and raising capital, with the ultimate goal of generating profit.
Naidoo claims that Thembekwayo agreed to transfer 50% of the total shareholding and/or securities of MGFVP to him, contingent on Naidoo leaving his own successful business venture.
Naidoo's responsibilities, as outlined in the court papers, included conceptualising and compiling fund structures, commercial term sheets, and investment memorandums. He was also tasked with developing the "My Growth Fund" playbook, intended to attract new private equity venture capital and establish a high-net-worth variable rate debenture fund known as Vuka and Mount Fletcher.
Furthermore, Naidoo was expected to establish a venture capital arm, secure venture capital funding, create a private equity book, and market the envisioned projects to potential investors.
His duties also encompassed conducting due diligence on proposed projects, developing the Exeo Capital playbook, structuring a debt lending portfolio, and participating in deal-making negotiations, which eventually led to project Sasfin.
Naidoo contends that after three months, the business had not generated sufficient income to facilitate profit sharing. Consequently, they amended their initial agreement to allow him to charge against a loan account for services rendered at his standard rate of R5,000 per hour.
The court papers state: "The plaintiff’s services, so rendered, would accumulate as a loan in his favour in the books of the second defendant, which loan would become repayable to the plaintiff prior to any declaration and distribution of dividends/profits."
"The plaintiff was entitled to retrospectively charge the above-agreed rates for his hours worked from June 2021 onwards."
Naidoo maintains that he provided his services at the agreed rate of R5,000 per hour, contributing 1,000 hours of his personal time towards the investment and other projects undertaken by Thembekwayo and MGFVP.
However, Naidoo alleges that Thembekwayo and MGFVP breached their agreement in December 2022 by failing to transfer the promised 50% of the total shareholding to him. They also allegedly failed to establish a loan account in his favour in the books of MGFVP to compensate him for the time he dedicated to their projects at the agreed rate.
Naidoo further claims that MGFVP ceased all communication with him in December 2022.
The court papers assert that Thembekwayo blocked Naidoo from accessing the electronic mail and database of MGFVP and terminated his access to all their systems and electronic platforms. "(He also) refused to communicate any further with the plaintiff."
Naidoo argues that this constitutes a repudiation of their contract. "As a result of the repudiation/breach of the agreement, Naidoo said he suffered damages in the amount of R5-million, calculated on the agreed rate of R5000 per hour," the papers state.
Alternatively, Naidoo is seeking R5 million from Thembekwayo and his entity, claiming that they misled him into believing that he would receive 50% shares in the company.
"At the time of the negotiations and at the time of contracting, the defendants knew that the representations were false because the first defendant never had the intention to provide the plaintiff with 50% of the shareholding within the second defendant and did not have the intention to pay the plaintiff for the services rendered," the court papers allege.
"Because of the fraudulent misrepresentations made by the first defendant, the plaintiff has suffered damages in the amount of R5-million, being the hours spent by the plaintiff towards the projects of the first and second defendants at the rate," the court papers further state.
In a separate claim, Naidoo details how Thembekwayo expressed a need for upmarket office space for himself and MGFVP at a reduced rental rate in July 2021. Leveraging his connections, Naidoo claims he informed Thembekwayo and MGFVP that he could source such a property at a reduced rate. He alleges that Thembekwayo promised to pay him 50% of the savings achieved, representing 50% of the difference between the reduced rental rate and the actual market rental rate.
Naidoo states that he successfully negotiated a rental deal with Redefine Properties in Sandton for Thembekwayo.
He explains that the normal rental for the office and parking bays would have been R3 million per year, equating to R250,000 per month.
"The agreement that was eventually concluded between the second defendant and the landlord entailed that no rent would be charged and that the only amounts to be paid would be approximately R80000 in respect of the offices and R37000 in respect of parking bays, which amounts are the rates that the landlord charges for utilities and amenities. As such, no rental was charged," the court papers state.
"The 50% of the value saved over the period of five years constitutes, therefore, an amount of R8799900, being the value saved of R17 599 802.90 divided by two, which the defendants must pay the plaintiff."
Naidoo alleges that Thembekwayo failed to pay him the agreed amount.
"As a result of the repudiation/breach of the agreement, the plaintiff suffered damages in the amount of R8799901, being the amount the plaintiff would have earned in respect of the second agreement had it not been for the defendants’ repudiation thereof," he stated.
Thembekwayo has declined to comment on the allegations.
