As Daybreak staff went unpaid this week and thousands of chickens suffered and died in filthy cages, the chair of the taxpayer-funded company had one thing on her mind — securing a final R625,000 pay cheque and quitting.
Daybreak Farms in Delmas, Mpumalanga, already the recipient of billions of rand in state support, is said to have approached its owner, the Public Investment Corporation (PIC) for another R1.5bn.
A source told the Sunday Times the PIC turned down the request because it was not adequately motivated.
While the plight of unpaid workers and harrowing images of starving, dying chickens made headlines this week, the chair of Daybreak’s five-person board of directors, Bojane Segooa, was pushing for the immediate payment of R1.2m in board fees.
And within hours of receiving her payment of R624,843.51 — another R235,515.50 was paid to her board colleague Kameshni Naidoo — in the early hours of Thursday, she resigned with immediate effect, leaving fellow board members dumbstruck as they were all scheduled to attend an emergency board meeting later that day.
So desperate was Segooa for the payment on Wednesday, she stripped CFO Aubrey Dali of his powers to make payments and gave them to Hluphi Moatshe, the company’s commercial financial manager, who sent the money and shared proof with the board members.
Dali, who opposed having his powers usurped, opted to resign, also with immediate effect.
A text message to him from Segooa, seen by the Sunday Times, read: “Dear CFO, have you paid board fees? Please send proof of payment here. Please be advised that the board has resolved that going forward another executive will oversee payment process due to your concentration of power.”
The internal source, who has direct knowledge of the company’s accounts, said that at the time of Segooa’s request the company had “about R2m” cash. This after the business had been allocated a R250m facility by the PIC in February to meet operating costs and invest in its farms and abattoirs.
But Daybreak’s finances were so dire that its suppliers halted feed deliveries and its telecoms provider froze its accounts due to unpaid bills. The company is also the subject of a liquidation application by one of its contract growers, which is owed R42m.
Segooa, in a statement, said it was important to note that the board fees were paid after several service providers were paid. She also said she had acted and made decisions in line with Daybreak's delegation of authority policy, which empowered "her alone to authorise and execute on numerous actions in the company".
"During her (Segooa) tenure the board processed several investigations including HR irregularities and financial mismanagement, implicating some members of senior management," the statement said.
"Throughout these investigations, Ms Segooa faced severe safety concerns, including death threats, which necessitated her resignation to protect her safety and that of her family. "Ms Segooa takes her role as a director, and the ethical considerations thereon, seriously and has never - and would never - put her needs or remunerate herself before those of any company she is charged to serve."
The statement added: "In fact Daybreak Foods owes Ms Segooa board fees which she has since forfeited."
On Friday the PIC said in a statement that a R74m portion of the R250m facility would be made available immediately to pay salaries, procure feed for the birds and meet essential operational expenses.
“The board and management of Daybreak Foods remain responsible and accountable for the company’s operations and finances,” it said.
“The PIC is strengthening the board and assisting it to strengthen management to help bring stability to the company and to resume normal operations.”
Daybreak welcomed the decision, saying in a statement it brought “a measure of stability”.
“With this support in place, we are now focused on addressing the immediate challenges that have arisen from our financial situation, which include resolving the delayed April salary payments to our staff and rectifying the supply of feed for our birds.
Certain governance matters raised are currently under investigation, and we are unable to comment further until these investigations are concluded
— Daybreak statement
“In light of these challenges, we also confirm the resignations of our CFO and interim board chairperson and wish them well in their future endeavours. Certain governance matters raised are currently under investigation, and we are unable to comment further until these investigations are concluded,” it said.
Segooa declined to comment, but the Sunday Times has learnt that she appears to have pushed for the payment after hearing from PIC chief investment officer Kabelo Rikhotso on Tuesday that funding would be in place by Wednesday.
Approached for comment, Naidoo said she had been in hospital and referred Sunday Times to Daybreak.
The Sunday Times established that three other board members — Charlotte Nkuna, Esethu Dazana and Kgampi Bapela — refused their payments “out of good conscience”, given the state of the company.
This week’s payments followed part payments of R300,000 in total for Segooa and two payments of R200,000 each for the remaining board members last month. One of these was made before staff salaries were due and the other was made after Daybreak had failed to pay the salaries.
On Friday senior officials from the PIC and its clients — the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund (UIF) and the Compensation Fund — met behind closed doors in a scramble to resolve the crisis and the threat to 3,400 jobs as well as more than a million birds that had been abandoned.
The National Council of SPCAs was alerted at the end of last month that birds that had been left with no food for days had resorted to eating each other.
In a statement the NSPCA said it “has rescued and placed over 500,000 birds on rearing farms”, while more than 350,000 had to be culled.
“This was one of the most emotionally and physically taxing operations our team has ever faced,” said senior inspector Nazareth Appalsamy, manager of the NSPCA’s farm animal protection unit.
Daybreak failed to pay its 3,400 workers their salaries for April, leading to staff protest demonstrations.
Cosatu said the workers complained that Daybreak had refused to provide documentation for them to apply for UIF benefits.
These developments are a cause for concern for the GEPF and we have requested the PIC to give an account of the developments
— Government Employees Pension Fund
One worker, speaking on condition of anonymity, said: “It is us who have to explain to our families that we have to now start selling possessions to buy food and service our debt while continuing to go to work.”
Daybreak, one of the PIC’s unlisted investments, has about a 7% share of the poultry market. It was bought from Afgri in 2015 for a reported R1.2bn in a PIC-backed broad-based BEE deal led by businessman Kholofelo Maponya. The PIC took a 36% stake while Maponya’s consortium took 54% and Daybreak staff 10%. In 2019 the PIC, following a falling out with Maponya, took full ownership of the business.
The chicken producer has been in financial trouble since 2001 when its then executive was hounded out by the board, which was found to have been irregularly appointed.
In the two years that the board was in place, Daybreak went from making R284m in pretax profits in financial 2020 to making a loss in 2023. Daybreak’s own internal financial documents at the time reported “various inflated one-off costs that took over R200m in unrelated activities”.
The GEPF this week confirmed that the R250m authorised for Daybreak in February was drawn from its money, adding that the PIC acted “according to its discretion”.
“The PIC manages this investment on behalf of the GEPF and as such expects the PIC to act in the best interest of the fund, which includes making sure investee companies are well governed,” it said.
“The GEPF has continued to express its concerns about the developments at Daybreak, including the governance-related matters.”
On the recent resignations at Daybreak, the GEPF said: “These developments are a cause for concern for the GEPF and we have requested the PIC to give an account of the developments.”
Editor's note: The article has been updated to add Bojane Segooa's comment
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