Restaurant group executive was 'mandated' to negotiate over 'extortion' money

17 July 2019 - 20:46 By Aron Hyman
Nafiz Modack (holding cellphone) outside the magistrate's court in Cape Town after an earlier appearance.
Nafiz Modack (holding cellphone) outside the magistrate's court in Cape Town after an earlier appearance.
Image: Esa Alexander

The company which runs some of Cape Town's top nightlife spots sent their chief executive officer to a meeting with alleged extortioners with the mandate to negotiate for an acceptable extortion amount.

However, when Stewart Bailey, of the former Harbour House Group, opened a case with the police alleging that one of their restaurants, The Grand Cafe Africa, was being extorted, he was banned from entering the premises by Sue Lerm, the proprietor of the posh beachfront nightclub.

This was according to Bailey's testimony in the Cape Town regional court on Wednesday, where the extortion trial against Nafiz Modack, Colin Booysen, Jacques Cronje and Ashley Fields resumed after it was adjourned following three days of trial in April.

Bailey testified that on November 4 2017, the inevitable occasion which the Harbour House Group, now Life and Brand - which owns The Grand - had been dreading unfolded, when a convoy of vehicles brought the four accused men and their bodyguards to their front door just as the final preparations for a massive event were being made. 

"We knew what was happening in Cape Town at the time in the (restaurant and nightclub) industry. What was going through my mind was that it was now our turn," said Bailey.

He said before the meeting he had been briefed confidentially by the group's owners about what amount he would be allowed to negotiate for, and when Cronje asked for R150 000 for the event which was going to take place in a few hours, he countered with an offer of R50 000.

The trial has laid bare the alleged complicit relationship between the nightclub industry and the alleged extortion rackets which run security and bouncers at virtually every entertainment establishment in the city centre.

On the first day of testifying, former Harbour House brand manager Radley Dijkers implicated himself when it emerged that he was complicit in the alleged extortion, by trying to hide from police an illicit transaction earlier this year relating to the extortion of The Grand.

Dijkers was also present at the meeting, which took place on November 4 2017, hours before they would host a special summer event, where Cronje asked for the money as an additional fee for special events. 

"This wasn't a normal business transaction. With what had been going on in Cape Town and the hype in the media, there was a bit of uncertainty," he said.

The men requested to talk in a space without cameras, so Bailey and Dijkers suggested the general manager's office.

When they got there Bailey testified that Booysen opened the conversation by saying, 'When I turn up it's normally because people have disrespected my people".

"He explained that he wasn't happy with the monthly fee," said Bailey.

He said that Modack "brandished some numbers" and, based on the amount they were charging per person for the event and the expected number of patrons, R150 000 was an appropriate figure for their service.

"He said these events were extremely financially beneficial to us but they weren't happy with what they were getting in exchange," said Bailey.

TSG, the company which Modack and his associates ran and which was registered to their deceased co-accused Karl Lakay (who was murdered shortly before the case went to trial), had already "taken over" security at The Grand in April that year from Lifestyle and Leisure, a security company run by Andre Naude, one of Modack's rivals.

Since their takeover the amount charged didn't change. 

Bailey said they factored in extra security for major events and that would be reflected in their budget, but R150,000 was not within their budget.

"What we get delivered from TSG doesn't warrant R150,000 extra. I conveyed this to them. The Grand can't afford this," he said.

"I had a mandate. My mandate was that I could negotiate between R50,000 and R100,000. I was also mandated to negotiate for monthly payments going forward," said Bailey.

He said he was expected to pay the money so that there would be no security risk to the event posed by the alleged extortioners.

"If we couldn't afford it we would probably cancel. If there was a threat we would end up cancelling," he said.

After some negotiating the parties arrived at a R90,000 once-off payment, which would later be paid in cash to Lakay with money taken from the cash registers at the bar.

"I was concerned about all of this. I was not happy. What was happening at the time, there was no textbook for this," he said.

The next day he was called by Captain Anthea Japhta at Cape Town central police station, who asked him to come and see her at the police offices in Barrack Street.

He told her what happened and asked for her advice, because he was afraid that if he wasn't truthful about what had happened he would be an accomplice.

"She said that one of the options was to open a case. The other option was to stay quiet. I opened a case, I was afraid of becoming an accomplice," he said.

"In my opinion, it wasn't right what had happened. The negotiation wasn't a normal course of action," he said.

According to Bailey, when Lerm found out that he had opened a case with the police, she banned him from The Grand.

Bailey is expected to be cross-examined on Thursday when the trial continues.