Is Khulubuse broke?

2017-09-24 06:05
Khulubuse Zuma

Khulubuse Zuma

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Khulubuse Zuma faces sequestration and the exposure of all his financial affairs after he stopped paying his debts to the liquidators of the ruined Pamodzi gold mines.

Now, instead of the roughly R12m President Jacob Zuma’s nephew still owed under a settlement deal, liquidators will try to raid his estate for far more. However, City Press has learnt that Zuma (47) was granted residency in the United Arab Emirates last year and is unconcerned about the sequestration, which he believes will not affect him financially.

In July, Zuma mysteriously failed to pay a monthly sum of R500 000 to the liquidators in terms of the settlement agreed to last year.

The settlement relates to Zuma’s personal liability for the collapse of the Pamodzi mines, which he took over together with former president Nelson Mandela’s grandson Zondwa, as well as Thulani Ngubane and Fazel and Solly Bhana. The collapse of the mines – situated in Orkney in North West and Springs in Gauteng – left thousands of workers destitute.

After Zuma failed to pay in July, a letter of demand was sent to him and he coughed up R200 000 last month, according to an affidavit by liquidator Johan Engelbrecht, which was filed in the Pretoria High Court a week ago.

In return, the liquidators launched a sequestration application to put Zuma’s estate under the control of trustees.

More importantly, the liquidators now say that Zuma, in all likelihood, lied when he declared his assets to them to broker the settlement deal last year.

The trustees would, in principle, have access to all of Zuma’s bank accounts and records, including his email accounts, to help “come to an understanding of the extent of the respondent’s business activities”.

The idea is that Zuma misrepresented his wealth when he negotiated the settlement and that the trustees would be able to prove that.

That would allow the liquidators to tear up the settlement and, once again, make Zuma obligated to pay the far larger original sum of R1.5bn he was held liable for in relation to Pamodzi.

“There are certain objective facts available to indicate that the respondent failed to make a full disclosure of his financial position,” said Engelbrecht.

In an affidavit submitted last year, Zuma said his entire net worth was no more than R23m.

His actual declarations included:

. A house in Umhlanga, KwaZulu-Natal, for which Zuma said he still owed R1.5m to FNB;

. A 2010-model Range Rover worth R200 000; and

. Mountains of debt, including R1.6m owed to his former public relations firm Kapital Mindz and R2.5m owed to law firm Strauss Daly.

At the time the settlement deal was struck, security company Protea Coin already had a warrant of execution against Zuma for R9.9m.

In his affidavit, Engelbrecht stated that Zuma was “hopelessly insolvent” – he had declared no income and no source of income.

After settling, Zuma nevertheless dutifully paid an initial R5m in July last year and then R500 000 every month until July this year, when the money stopped.

“The respondent is evidently able to sustain a living and to make payment in the huge amounts of R500 000 per month,” said Engelbrecht.

“The above are objective indicators that the respondent possesses substantial assets and/or income.”

In his declaration, Zuma also failed to mention that he is a director of 34 companies. Instead, it only mentioned his association with Impinda Transport and claimed it had “no value”.

“We do not know if someone helped him; we just know he had been paying and then stopped,” Engelbrecht told City Press.

The R1.5bn

The amount of R1.5bn represents the value of the Pamodzi gold mines before they were taken over by Aurora in 2009 under an interim management deal.

The amount is owed jointly by Zuma and his Aurora partners, including Mandela, Ngubane and the Bhana family.

Zuma was the chairperson of Aurora, which offered to buy the Pamodzi mines out of liquidation for R605m.

The interim management deal was meant to last until they paid up and fully took control, but it later transpired that the offer was probably fictitious, or at least hopelessly uncertain, to begin with.

By 2011, the management contract ended and the mines were stripped bare and overrun by illegal mine workers, colloquially referred to as zama zamas.

When Aurora collapsed, Zuma split from his partners and faced the liquidators in court alone.

He argued that he was unaware of what was going on at the mines and was not really involved in Aurora to the same extent as Mandela, Ngubane and the Bhanas.

City Press’ attempts to contact Zuma this week were unsuccessful, and the attorneys who acted for him in the settlement talks said they had no knowledge of the new application from the liquidators.

In 2014, Zuma married Swazi princess Fikisiwe Dlamini, one of his four fiancées, at a lavish wedding at his home in Nkandla in KwaZulu-Natal, which is adjacent to his uncle’s property.

In attendance were the president and 5 000 guests, who were entertained in seven marquees and for whom 16 cattle were slaughtered.

Read more on:    pamodzi gold  |  khulubuse ­zuma

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