Daybreak Farms is a going concern, the black-owned poultry producer, said on Thursday after media scrutiny in the wake of the resignation of its CEO, Richard Manzini, tasked with turning around the troubled firm.

"Regarding recent media reports, we can confirm that Daybreak is not being liquidated. We value our relationships with all stakeholders, including Shoprite, and appreciate their ongoing support," it said in a statement sent to Business Report. This comes after Business Report earlier this week reported Financial troubles at Daybreak Farms: PIC's silence during management crisis.

Media speculation is rife that its main shareholder, the Public Investment Corporation (PIC), allegedly rejected a request for an additional R250 million loan to aid the financially stressed company, leading to Manzini's abrupt exit.

However, Daybreak said that Manzini had resigned in February to "pursue an opportunity that aligns with his personal and professional goals, and additionally, two other executive members have also left the company".

It explained that its chief operating officer had resigned due to health reasons and its chief commercial officer had resigned to pursue other interests.

"We appreciate Mr. Manzini's contributions to the company during his tenure and are grateful for his commitment to ensuring a smooth transition. He will remain available to the business until May to support this process while the Board recruits for his replacement," it said in a statement.

Daybreak also said, contrary to recent speculation, not all exco members had resigned. "Our chief financial officer and chief people officer remain with the company, and we are committed to maintaining stability and continuity."

Daybreak said it remained focused on executing its business strategy and was exploring various options to support its growth and plans. "We have maintained transparency with our key and immediate stakeholders regarding all recent developments and will continue to do so as necessary," the company said.

The poultry producer failed to comment on whether the PIC was still issuing a loan.

The PIC - which is the largest asset manager on the continent, overseeing assets on behalf of the Government Employees Pension Fund, the Unemployment Insurance Fund, and the Compensation Commission - failed to respond to a request for comment on the loan.

Shoprite too has failed to respond to a request for comment and to shed light on a further insider allegation that Daybreak has sold poultry to Shoprite in a fireside sale, undercutting other producers and artificially lowering costs.

Meanwhile, much more serious allegations concerning Daybreak have come to light that the relaunched Sunday Independent will delve into this weekend.

Corporate governance clean up:

Last year, it appeared Daybreak was on the path to recovery. It underwent a reorganization with a new C-suite team appointed following an overhaul of the company’s board in 2022, prompted by reports of multimillion-rand irregularities amid State Capture at the chicken producer. Additionally, four non-executive directors were added to the board to bolster corporate governance. Daybreak produces roughly 1 million birds per week.

In 2021, a forensic investigation into Daybreak had uncovered a R138 million siphoning scheme starting in 2019, tied to a joint venture with Hestony Transport under then-CEO Boas Seruwe, raising red flags of corruption akin to State Capture’s playbook of exploiting public entities. Whistleblowers exposing board-level malfeasance faced retaliation, while the PIC was also in the spotlight as the main shareholder.
BUSINESS REPORT