Huge profits from local land deals

A prominent businessman in Mpumalanga, who is linked to premier David Mabuza, has emerged as the central figure in questionable municipal land deals worth R45-million.

The Sunday Times has established that town planner Patrick Chirwa used his company, Pacific Breeze Trading 474, to snap up private plots on the cheap and sell them to municipalities at exorbitant prices.

Chirwa is also the owner of Sisonke Development Planners in the province.

At the time that most of the deals took place, the premier, Mabuza, was MEC for agriculture and land administration and served as a director of two companies - Above Average Trading Corporation 44 and 45 - with Chirwa.

In one deal, a plot was bought for R3.1-million and sold to the Mbombela municipality for R11-million in one day.

At the time, Chirwa was a board member of the Mbombela Housing Association whose mandate included identifying properties for "social integration" on behalf of the council. He is now the chairman of the association.

In another deal, Pacific Breeze bought a plot in the Emakhazeni municipality for R1.6-million and transferred it to the council for R17.4-million.

Deeds and company records show that between 2007 and 2008 Pacific Breeze bought four smallholdings from private landowners for a total of R7.6-million and sold them to the government for R44.4-million - pocketing a profit of R36.8-million.

The purchases by the municipalities were all financed through the provincial government.

Chirwa confirmed the details of the transactions and admitted to making "huge profits". But he claimed these were not "unseemly" because property developers took "large risks".

The massive price hikes, which took place during a global property slump, were "due to normal market forces" for farm land "earmarked for development purposes", he said.

Pacific Breeze is not the only entity through which Chirwa made money out of lucrative government deals.

The members of Pacific Breeze - Chirwa, Harrington Dlamini and Robert Burwise - also own a company called Lusito Development Specialists.

In 2006, Lusito lodged an application to develop the very same properties bought and sold by Pacific Breeze into a "social housing" project. This project ran into stiff opposition from local landowners, who formed a pressure group, the White River Concerned Citizens Committee.

Committee member Stefanus Labuschaghne told the Sunday Times he had attended a residents' meeting in 2006 convened by Burwise, who claimed there were "very powerful politicians behind this development" and that "we won't be able to stop it".

Another resident, Paul Clark, said Burwise "told me personally we will never stop this because there were 'very powerful forces' behind it".

Chirwa denied exploiting his political connections and positions to clinch the deals. He said his relationship with Mabuza was professional.

"We have no business association whatsoever," he said, and Mabuza "had no influence on the decision of the Department of Human Settlements to finance the purchase of the land".

He threatened to sue the Sunday Times, saying: "The questions raised ... are already defamatory."

Mabuza, through a spokes-man, denied that he had benefited from the deals - or through any of his business links with Chirwa.

Asked if the Department of Human Settlements planned to investigate the sales for irregularities, provincial head David Dube said "proper processes were adhered to when purchasing the properties and there is nothing currently that warrants any legal action".

• hofstatters@sundaytimes.co.za
• mzilikazi@sundaytimes.co.za