The turnaround and stabilisation project at Daybreak Farms, the chicken producer owned by the Public Investment Corporation (PIC), has hit a wobble with news of the sudden resignation of CEO Richard Manzini.
Manzini, a former banker at the PIC, resigned last month, 13 months after being appointed to the pressure cooker job.
“Daybreak confirms that Mr Manzini resigned in February to pursue an opportunity that aligns with his personal and professional goals. We appreciate his contributions to the company during his tenure and are grateful for his commitment to ensuring a smooth transition,” the company said in a statement on Friday.
We remain focused on executing our business strategy and are exploring various options to support our growth and stabilisation plans
— Daybreak Farms statement
“Manzini will remain available to the business until May to assist with the transition while the board recruits for his replacement. The board is currently overseeing the business to ensure its sustainability during this transition period. We remain focused on executing our business strategy and are exploring various options to support our growth and stabilisation plans.”
Daybreak is owned by three worker funds — the Compensation Fund, the Unemployment Insurance Fund and the Government Employees Pension Fund — through the PIC, which fronted businessman Kholofelo Maponya R1.2bn to buy the business in 2016. Within six months of the investment, the business was insolvent, reporting a R28m loss. The PIC pushed Maponya out and took over operations.
While under the PIC. and in the middle of appointments of directors, company secretary Bongani Mathebula allegedly broke the PIC’s rules, swapping out proposed board candidates and replacing them with her own choices. This new board then allegedly disregarded governance and oversaw the appointment of law firm Black White, owned by Mathebula’s former business partner, Nakedi Pule Malahlela.
The law firm was paid more than R100m, ostensibly for legal work, but some of the invoices were found to have been inflated, fictitious and double-billed. Blue Apple Tree Branding, linked to Daybreak’s company secretary Kgabo Mapotse, was paid almost R50m in similar circumstances.
Manzini was then introduced to the company in October 2022 as part of a new board, mandated to turn the ship around after the PIC forced the Mathebula-aligned board out. He had stepped into the role at a time when the poultry producer — which employs 3,400 workers — was on the brink of falling over, because of sustained looting and mismanagement.
Added to this was that the local poultry industry was under pressure from disease, high grain prices and load-shedding, which all contributed to skyrocketing input costs. So dire was the situation that in 2023, the Sunday Times reported that an internal PIC report that was presented to one of its workers’ funds said creditors were so wary of the company that they had placed it on shorter payment terms, severely affecting cash management.
This was as the company’s pre-tax revenues had reportedly shrunk from R284m in 2020 to R86m in 2023. Over the past year, Manzini and his leadership team have been hard at work, renegotiating inflated contracts, fighting to recover wasted millions and holding to account employees implicated in previous malfeasance.
Manzini's departure comes after Daybreak’s sole owner, the PIC, rejected a R250m loan request to help with stabilisation and fixing Daybreak’s balance sheet. At the time, he said the new money would be spent on technology upgrades at abattoirs, a water treatment plant and increasing the speed of processing systems.
Last April, Manzini was quoted as saying: “We need about 18 months to sort out the balance sheet, starting with raising the R250m in loans. Once we have built out a strong balance sheet, the PIC could also consider certain exit options as it usually doesn’t hold 100% of an asset.”
This week, after an approach to confirm news of his resignation, Manzini said: “I have resigned from Daybreak to pursue another career opportunity. I will be assisting them in the transition as I serve my notice. That is all I can say on the matter.”
A source with direct knowledge of the loan request, having been part of structures that considered it, said the general view was that the investors were already too exposed. “That asset was just sucking money [and] any further funding, even if in the form of loans, made no sense to us. We did not even need to engage deeply with the proposal because there is a moratorium on new investments anyway.”
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