Nkandla builder’s loan

2013-12-24 00:00

CAPE TOWN — A state institution tasked to finance developing businesses has confirmed that it gave a R10 million loan to a former Pietermaritzburg teacher who is now one of the largest contractors who was involved in building President Jacob Zuma’s private estate at Nkandla.

The loan was awarded to the company when it experienced financial difficulties.

The loan by the Industrial Development Corporation (IDC) was to stop the contractor, Bonelena Constructions and Projects, from being liquidated and ending up in court.

More than a year later, the IDC has not been paid back a cent of the loan.

According to an internal memorandum from the Department of Public Works, in which the possibility was discussed of cancelling Bonelena’s contracts at Nkandla based on its poor performance, the minister of Public Works was warned that court action against Bonelena would create an unacceptable risk for the department, which could lead to “political damage” that could negatively affect the political image of Zuma.

Bonelena was provisionally liquidated in June 2012 and the contracts for Nkandla were also cancelled.

The IDC, however, intervened and in 2012 provided R10 million to avoid court action, this on top of an earlier loan of R20 million that the IDC had awarded to Bonelena.

IDC spokesperson Mandla Mpangase said the R10 million was a “facility to finance a payment scheme between Bonelena and its creditors”.

He said the R20 million loan to Bonelena was also restructured with repayment of the full R30 million to start from January 2014.

The government has — despite Bonelena’s financial problems and the various probes into the Nkandla project that started in November 2012 — paid about R78 million to Bonelena for work done at the private estate of the president at Nkandla.

Since then, the boss of Bonelena, Thandeka Nene, has been arrested in the Seychelles on charges of fraud.

The Mail & Guardian reported on Friday “that Nene and two others [one thought to be South African and the other from Sierra Leone] now face charges of attempting an enormous, barefaced and surprisingly unsophisticated bank fraud that could, if they are convicted on charges that include forgery, earn them long jail terms”.

Police in the Seychelles say the syndicate approached BMI Bank on the islands to open new bank accounts that would be funded by what they said was €500 million (about R7 billion) in available funds held by HSBC Bank.

This, apparently, came as a surprise to HSBC, which informed its Seychelles counterpart that “the documents were false”.

Spokesperson for the Department of Foreign Affairs Clayson Monyela has since declined to comment on Nene’s status.

He only said that although the government did not have a representative in the Seychelles, government offered assistance to any South African who come into conflict with authorities overseas, regardless of which country they are in.

One of the recommendations in the government’s own report on Nkandla was that the Department of Public Works must now underwrite the loans to Bonelena.

The task team said the transaction must be investigated further.

The report stated the contracts that had been awarded to Bonelena had been cancelled because of poor delivery.

Bonelena was among others responsible for all the construction work outside the personal homes of Zuma.

This includes building a fence around the Nkandla estate, building access control points, relocating and rebuilding the tuck shop, building a generator shed, establishing a refuse removal area and building a landing pad for helicopters.

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