The Democratic Alliance has filed a formal complaint with the Legal Practice Council against a law firm that received more than R124 million in payments from Daybreak Foods before the poultry company’s collapse.

Andrew Bateman, the DA’s deputy spokesperson on appropriations, this week lodged the complaint against attorney Pulane Jimmy Malahlela and Malahlela and Company Attorneys over what the party describes as extraordinary legal spending at the now-defunct company.

The complaint carries serious implications because Daybreak Foods was owned through the Public Investment Corporation by the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Fund. This means the money ultimately belonged to government employees, pensioners and workers across South Africa.

Nearly 1 900 workers lost their jobs when Daybreak collapsed, while approximately R2 billion invested on behalf of government employees, pensioners and workers now sits at risk.

Forensic findings raise red flags

The DA’s complaint draws on findings from Fundudzi Forensic Services and Nexus, which uncovered troubling patterns in the legal payments made to Malahlela Attorneys.

Fundudzi recorded that Daybreak paid Malahlela Attorneys and Black-White R101.5 million between April 2021 and October 2022. The forensic investigators identified what appeared to be excessive hours billed and duplicate transactions.

A later business rescue plan for Daybreak, citing Nexus findings, revealed that approximately R123.9 million had been paid to Malahlela Attorneys over two years. Of this amount, R39.9 million could not be matched to any invoices, while another R8.8 million appeared to be duplicate payments.

The business rescue plan stated that Malahlela Attorneys were implicated in “financial improprieties”.

State capture work at a poultry company

One of the most puzzling questions raised in the complaint centres on why a poultry company would pay lawyers for work related to state capture.

Fundudzi’s records show numerous amounts billed by Malahlela Attorneys for “Daybreak – State capture analysis and legal advisory”. The DA wants to know who commissioned this work and whose interests it served.

The complaint also alleges that approximately R57 million was spent on legal action involving employees who had raised concerns at Daybreak, suggesting the company may have used its legal resources to silence whistleblowers.

What the DA wants investigated

Bateman has asked the Legal Practice Council to investigate possible breaches involving honesty and integrity, unnecessary legal costs and abuse of legal process. The complaint also raises concerns about a possible conflict of interest.

The party says this complaint forms part of a wider effort to uncover what happened at Daybreak, who benefited from the company’s financial troubles, and who should be held accountable for its collapse.

“Government employees, pensioners and workers deserve answers,” Bateman said in the statement announcing the complaint.

The Legal Practice Council has not yet commented on whether it will investigate the complaint.