Shabangu denies ownership of ICD offices

2011-11-23 17:35

Cape Town - Empowerment property tycoon Roux Shabangu has denied owning a building leased to the Independent Complaints Directorate for far more than it can afford, but may have passed on his share to a business partner.

The chairperson of Parliament's portfolio committee on police, Sindi Chikunga, said on Wednesday she had received a message from Shabangu asking to appear before MPs to set the record straight in the growing controversy over the ICD headquarters lease.

This had not happened because his note reached her only on Tuesday, leaving no time to make arrangements, Chikunga said.

She said she had not been convinced that Shabangu had cause to appear before the committee because there was no proof that he was involved, but mere media "rumours" to that effect.

However, ICD chief executive Francois Beukman told the committee he was surprised to receive a letter from Shabangu in recent days saying he was no longer the owner of the City Forum office block at 114 Vermeulen Street in Pretoria.

Change in ownership

"We received a letter indicating that he is indeed not the owner of this building."

Public works deputy director general for assets, Sasa Suddan, told MPs the City Forum office belonged to Shabangu's company Majestic Silver Trading and said the department was not aware that it had changed hands.

"We have not been informed that there has been a change in ownership or anything of that nature," she said.

"We suspect that the consortium and perhaps Mr Shabangu has a percentage in terms of shareholder capacity here.... So he has perhaps sold his shares in that company to the individual who was mentioned as Mr Van Niekerk."

Shabangu is widely reported to have been in business with a Japie van Niekerk.

The lease for the City Forum building is being investigated by both the Special Investigating Unit and, at the request of the Democratic Alliance and Police Minister Nathi Mthethwa, by Public Protector Thuli Madonsela.

Beukman confirmed on Wednesday that the ICD has had to ask the National Treasury for an additional R36.4m over the next three financial years to cover the escalating rent of its headquarters.
 
‘Compulsory’ move

He came under fire from MPs for failing to get clarity on the cost of the lease but, as he did while being grilled by the committee last week, blamed public works.

Beukman said the department forced the ICD into the lease in January last year but at the same time failed to inform it of the onerous conditions, including a rent bill of R10.6m a year.

Instead of sending the ICD a copy of the lease, public works sent a letter to the police watchdog, saying it was "compulsory" to move into City Forum.

It added that, should it not do so, "wasteful expenditure will be incurred as DPW [the department of public works] will not have a justification for securing other buildings and ignoring existing commitments".

Beukman said: "The DPW did not in this case indicate the initial cost implications of the City Forum building to the ICD."

He said the building had already been leased by public works by the time the ICD was asked to move into it, therefore the watchdog body had no hand in the procurement process.

The department's chief operating officer Butcher Matutle shocked MPs by saying that although he had tried to obtain facts and figures from officials involved in concluding the lease, he could not vouch for their accuracy.

"There are very serious problems," he conceded.

"The procurement processes at public works, particularly in terms of leasing, are fundamentally flawed. They need a complete overhaul."

- SAPA