Minister offered me R50m – Shabangu

2012-02-25 20:00

Former public works minister Geoff Doidge offered him R50 million to walk away from the R500 million police building lease debacle.

This is one of the startling claims made under oath by controversial property mogul Roux Shabangu in an affidavit filed at the North Gauteng High Court this week, in which he fights off attempts by Public Works to cancel his company’s lucrative police lease.

The deal has already claimed the heads of Doidge’s successor, Gwen Mahlangu-Nkabinde, and police chief Bheki Cele, who was suspended.

Doidge was fired by President Jacob Zuma at the end of last year. The president did not give reasons for his removal. Doidge now serves as South Africa’s ambassador to Sri Lanka.

A query into Cele’s role in the deal, chaired by Judge Jake Moloi, is scheduled to start in Pretoria next Monday.

Shabangu’s claims come hot on the heels of Finance Minister Pravin Gordhan’s announcement this week that he and Public Works Minister Thulas Nxesi would review government’s more than 3 000 building leases for their validity and cost effectiveness in the next year.

Nxesi, whose department administers the majority of government’s property deals, admitted this week that his department was in a mess.

Public Works is now trying to cancel the R500 million lease with Shabangu’s Roux Property Fund after it originally recommended the Middestad building as new headquarters to the police.

In his affidavit, Shabangu slammed Doidge and the department for placing in jeopardy a R220 million financing deal with Nedbank to buy the building.

The lease was cancelled after Public Protector Thuli Madonsela found that it was awarded to Shabangu without going out to tender and that the behaviour of Cele and Mahlangu-Nkabinde was irregular and unlawful.
In his affidavit, Shabangu claims:

» Suspended public works director-general Siviwe Dongwana told Nedbank in a letter it would go ahead with the leasing deal, irrespective of the outcome of investigations by Madonsela and the Special Investigating Unit;

» The person who alerted him to the Middestad building was a property broker named “Scholtz”, who said it would be ideal for Statistics SA and the department of public service and administration to rent;

» Public Works official Mokgaetji Tlolane first told him the police wanted to lease the Middestad building;

» Tlolane arranged Shabangu’s first meeting with the SA Police Service. She insisted they wouldn’t go out to tender because accommodation was required “urgently”; and

» Contrary to the state’s version that unauthorised Public Works officials signed off on the deal, an acting Public Works regional manager, Sue Mosegomi, signed the lease without the involvement of police heads.

» Shabangu’s affidavit could bolster Cele’s case when he appears before the commission of inquiry.

The police boss has always claimed he had nothing to do with identifying or leasing the Middestad building.

Shabangu told City Press he was contacted by the commission two weeks ago and asked to give evidence.

However, he requested written questions and provided a “carefully worded” response.In his affidavit Shabangu, who made his millions from selling maize and developing shopping centres, explains that the value of a property depends on long-term leases.

He admits negotiating the police lease before he officially became the owner of Middestad.

“The property could only be acquired, and the necessary financing for that purpose secured, if an appropriate long-term lease with a reliable tenant was secured.”

The financing from Nedbank, he claims, is also dependent on the lease being reinstated.Shabangu says that in September 2010 he was approached by Doidge to attend a meeting at Durban’s Sibaya Casino.

“This meeting was attended by, among others, Doidge and myself. Doidge said that DPW would pay the respondent (Roux Property Fund) R50 million to walk away from the lease.

I, in no uncertain terms, told them that I would not do so,” says Shabangu.

Doidge referred all queries to the Department of Public Works and refused to address Shabangu’s allegations.

Two letters written by Dongwana in November 2010 – that confirm the deal was going ahead – seem to be the smoking gun in Shabangu’s armoury.

The deal may cost taxpayers more than R600 million, should the department lose the case.Nedbank only provided funding for the building on receiving Dongwana’s statement.

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