Rupert & Co owe R64m

2016-11-13 06:00
The Leopard Creek Country Estate in Mpumalanga

The Leopard Creek Country Estate in Mpumalanga

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A municipality in Mpumalanga is ruing the day it decided to dissuade residents from reclaiming a piece of land on which a R1.4 billion golf estate, belonging to South Africa’s richest man – Johann Rupert – and his partners, is built.

Officials at the Nkomazi Local Municipality thought the Leopard Creek championship golf course would provide residents with jobs, and the council with a secure income stream.

In 2008, the municipality in Malelane applied to have the exclusive Leopard Creek Golf Estate exempted from land claims.

The property was the brainchild of Rupert and is administered by Leopard Creek Share Block.

Rupert’s net worth is $5.3 billion (R73 billion) and he is the 248th richest man in the world, according to Forbes magazine.

Despite the municipality’s efforts, Leopard Creek Share Block is fighting the council over the amount it should pay for municipal and property rates.

According to the municipality, Leopard Creek is R64 million in debt.

When Nkomazi municipality approached the court, many tribal communities dispossessed by apartheid laws were laying claim to prime tourism land in and around the world-renowned Kruger National Park and adjacent privately-owned game reserves.

Nkomazi spokesperson Cyril Ripinga said the municipality feared that allowing such a facility to be subjected to a land claim – and eventually transferred to claimants – could affect the economic development of the town.

Officials explain how Leopard Creek Share Block has been using its financial muscle on lawyers and court applications to frustrate the municipality, and to ensure that it only pays rates of R35 000 a year for the entire property, which includes 271 palatial homes.

Leopard Creek entered into this agreement with the erstwhile Malelane transitional council in 1996, before the Municipal Property Rates Act was promulgated in 2004.

The dispute began when the municipality re-evaluated the property in 2012 and found it to be worth R1.4 billion.

The municipality argues that the agreement became null and void when the rates act came into effect. So Leopard Creek Share Block should be paying R9.8 million a year, or R822 950 a month.

Ripinga accused Leopard Creek of disregarding the act and dictating how much it wanted to pay.

“Our valuation is complying fully with the rates act. The shortfall has affected the municipality badly in relation to service delivery,” said Ripinga.

“What we find ironic is that, in about 2008, we made an application to the Pretoria High Court for Leopard Creek not to be under land claim.

"This was done solely to ensure the growth of Malelane. Strangely, the same people have forgotten that,” he said, adding that the municipality had already spent R2 million in legal fees trying to force the company to pay more.

The value of the estate narrowly surpasses the entire 2016/17 Nkomazi municipal budget, totalling R1.1 billion.

According to the Companies and Intellectual Property Commission, Leopard Creek Share Block comprises 13 directors and two company secretaries.

The golf estate is situated on the southern border of the Kruger National Park.

It has 271 residential stands, as well as recreational facilities and an 18-hole golf course with a club house. It hosts the world’s top golfers during the annual multimillion-rand Alfred Dunhill Championship.

Nkomazi consists of 54 rural and underdeveloped villages, situated on tribal land. It collects rates and taxes from four urban towns: Malelane, Hectorspruit, Marloth Park and Komatipoort.

The bulk of Nkomazi’s budget – 70% – comes from the national fiscus, leaving the municipality to generate 30% of its own revenue.

The R64 million bill being claimed by Nkomazi could go a long way towards fixing service delivery backlogs such as water and electricity supply, and road infrastructure.

Josua Malherbe, director of Leopard Creek Share Block, said the company paid the annual R35 000 fee, despite the fact that the municipality provided no services to the estate.

“The municipality does not dispute the existence of the agreement, but it is trying to extort more money from Leopard Creek,” he said.

“Leopard Creek has, in addition, expressed its willingness to increase the monthly sum it pays to the municipality, but the municipality refuses to enter into discussions about this and has chosen to go the legal route – in spite of the enormous legal costs that it incurs for all the taxpayers of the municipality.”

Malherbe did not reveal how much more the company proposed to pay.

“I suggest you ask the municipality why it has chosen to take the expensive legal route, rather than negotiate a fair and equitable deal as proposed by Leopard Creek,” he said.

The Valuation Appeals Board of Ehlanzeni dismissed Leopard Creek’s dispute, which was lodged by the company to question the municipality’s valuation method.

“The [municipality’s] valuer looked at the land and the improvements on the land.

"The board is of the view that, in so doing, he [the valuer] has followed the correct approach, as envisaged in terms of section 46 of the rates act,” reads the board’s judgment.

Malherbe sidestepped the question of whether the company planned to take the board’s decision on review.

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Is it fair for the estate to refuse to pay higher rates and taxes to the municipality?

SMS us on 35697 using the keyword RATES and tell us what you think. Please include your name and province. SMSes cost R1.50

Read more on:    johann rupert  |  land

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