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State sued over land deal

ROB ROSE, STEPHAN HOFSTATTER and MZILIKAZI WA AFRIKA | 2011-10-02 00:57:10.0
Minister of Land Reform Gugile Nkwinti. File photo.

The government is being sued by an empowerment consortium for R670-million after allegedly torpedoing a deal to buy Eastern Cape forest land.

The land reform case will be played out in the High Court in Pretoria tomorrow.

PG Bison, owned by JSE-listed furniture multinational Steinhoff, is accused of trying to bribe key government officials to ensure they won the deal.

They are accused of bribing the head of land reform in the Eastern Cape to ensure that a deal signed between the Maluti consortium, who have lodged the application, and Mondi did not go through.

Maluti thought they had bought 76000ha of prime timber forests for R200-million, with the bulk of it coming from government.

The consortium had structured the deal so that 9000 people living in the poverty-stricken region between Maclear, Ugie and Elliot would own 70% of the land.

The case comes weeks after Minister of Land Reform Gugile Nkwinti released a policy paper proposing curbs on foreign land ownership and suggesting the constitution be changed to speed up land transfers from whites to blacks.

Less than 10% of land has been transferred to blacks since 1994, shy of government's 2014 target of 30%.

In November 2004, Mondi and the Industrial Development Corporation accepted Maluti's offer.

Maluti then signed a deal with the Department of Land Affairs which would result in Maluti providing R20-million and the government R180-million in land grants.

The Sunday Times has also established that, soon after the deal was signed, provincial land reform head Malerato Nkonyane was approached by PG Bison's empowerment partner, Sabelo Macingwane, to pull the plug on the deal "so Steinhoff can take over".

These claims are made in a letter she apparently wrote to then president Thabo Mbeki - in the paper's possession and dated March 2005 - asking him to intervene.

She said: "[Macingwane] said he had already agreed with senior officials in the department, and if I was going to go along with the plan, he promises that they would take care of me for the rest of my life.

"When I indicated that this sounded like a bribe, he said since he had talked to the senior officials in the department [and] if I did not go along with his plan, he was capable of rocking the boat."

A few days later, Nkonyane was suspended and remained suspended on full pay for three years until she was cleared of charges against her in 2008.

During her suspension, the Department of Land Affairs sent a letter to Maluti on April 5 2005 saying it "cannot see its way clear to proceeding with this project, which does not comply with [various laws, and] is not considered to be a land reform project".

The department then tried to sue Nkonyane, Maluti and some of its own officials for the R3.8-million already paid to get the project going.

Maluti hit back with its own counter-claim for R670.9-million, plus interest, for the thwarted deal.

In its legal papers, the government rejected Maluti's claim, saying Nkonyane didn't have authority to authorise such a deal. Only former finance minister Trevor Manuel could have bound the government for that amount.

When contacted this week, Macingwane admitted that he had put the deal together for PG Bison, but denied the bribe claims. "It was owned by Mondi and Anglo American, and I went to Lazarus Zim to broker the deal, and that's how [PG Bison] got it," he said.

He denied offering a bribe to Nkonyane, saying he "couldn't remember meeting her".

"Why should I [have done that]? Assuming I were to have done it, what would I gain?"

Stephan Grobler, a director of both PG Bison and Steinhoff, said neither company bribed anyone to get the deal. "We vehemently deny that. There would never have been any instructions to anyone like that," he said.

He said the deal was with Mondi and only required Competition Commission approval, so there was no need to get approval from any land officials anyway.

This week, Maluti director Lucky Twala said it was ironic, given the slow pace of land reform, that PG Bison landed the deal.

"It would have been the biggest land reform project in South Arica at that stage, so this is a big missed opportunity," he said.

Twala claimed that one of Maluti's directors was also offered a bribe "to swing this in favour of Steinhoff" at the Fancourt golf estate in the Western Cape. When this was rejected, land affairs officials were approached to thwart Maluti's deal, he said.

As to the court action, land reform's director-general Mdu Shabane said the department didn't "owe them that amount of money".

"But until the court decides on it, I can't go into further detail."

Shabane rejected Twala's view that the matter represented a missed opportunity for land reform.

"I really wish it would have benefited the people, but I think the facts are different."

He said some of Maluti's claims were "completely false".

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