R1bn land claim: deal or no deal?

2013-08-11 06:00

The political backlash against Land Minister Gugile Nkwinti might reverse what had seemed a cut-and-dried deal to pay about R1 billion to a multimillionaire game rancher in a controversial land restitution deal.

Sources inside the department said while the minister was still eager to settle, paying R1 billion for one land claim might not be the best political option.

At the same time, Nkwinti was eager for the land claimants not to opt for financial compensation, but to get their land back instead – and was willing to “go the extra mile”, sources defending Nkwinti said.

Michael Rattray’s exclusive MalaMala, one of the largest private game reserves in the country at 13 300 hectares, is under claim by the Mhlanganisweni community, who have been fighting tooth and nail not to get a so-called chequebook restitution.

The case was scheduled to go to the Constitutional Court this week, but Nkwinti tried to thwart this by arguing in an affidavit that a deal was imminent.

The case is seen as a landmark property rights case for land reform in the country and would be the first of its kind to be ruled on by the country’s highest court.

Yet another meeting took place between the interested parties on Monday.

David Evans, business manager at MalaMala, declined to comment, saying that the case was sub judice.

The claimants’ lawyers said the parties had agreed not do disclose anything about the negotiations while it was ongoing.

Nkwinti’s spokesperson, Mtobeli Mxotwa, told City Press that the MalaMala case had not been finalised.

Nkwinti will first visit the community in two weeks’ time to take stock of their situation, before any final decision can be made, he said.

As to why Nkwinti was hesitant to let the case go to the Constitutional Court, Mxotwa said: “We don’t have control over courts.”

He said the government would rather rely on the parliamentary process.

“The valued general legislation that will see us moving to a more just and equitable system, rather than the market system at the moment, has been approved by Cabinet and will go to Parliament soon. We would rather see that as a solution, than running to the courts.”

City Press understands the negotiations will continue in September, and that negotiations might not be as far advanced as Nkwinti proclaimed in his affidavit to the Constitutional Court.

Criticism has been mounting this week since Sunday Times reported last week that Nkwinti’s department would blow a big part of its budget on one land claim.

Said Mxotwa: “It has been blown out of proportion. This figure of R900 million is wrong.”

He said there was a number of figures that were being discussed in the negotiations. Mxotwa was adamant that negotiations were far from being concluded.

Last week, Rattray’s lawyer, Patrick Falconer, told the Sunday Times “the owners and the minister are indeed in the same ballpark on the value of the land and improvements”, but declined to specify an amount.

In his affidavit, Nkwinti asked that the case be “removed ... from the roll on August 13 to enable the parties to settle it. Negotiations are at an advanced stage between the state and the claimants, which would then culminate to an ultimate agreement on the purchase price between the state and the landowners.”

By the end of this week, however, the case was still set to be heard in the Constitutional Court on Tuesday, even if it would simply be postponed.

Both the government and the claimants’ lawyers were in favour of a postponement because of the negotiations.

But the friends of the court in the case, the Lawyers for Human Rights, would prefer for the case to go ahead.

The Mhlanganisweni community was still dumbfounded by the government’s U-turn on paying nearly a billion rand for a land claim after the state fought both the Rattrays and the community in court for five years.

While it wants its land back, the community is not in favour of the R1 billion deal.

Rattray, the majority shareholder in MalaMala, did not dispute the land claim, but simply insisted that market value be paid for his land. He would also not be paying tax on the amount he is paid, because it was in the interest of land reform.

Interestingly, if the government agrees to the R900 million price tag on MalaMala, it will be an outright reversal of their argument in the land claims court two years ago.

The community lost the case last year when Judge Antonie Gildenhuys ruled that the community was better suited to chequebook restitution than getting their ancestral land back.

The government argued then that the fiscus could not afford to pay market value.

Back then, the state said in court documents it could pay R360 million at the most for MalaMala.

If the state was ordered to pay market value, it could simply revert to chequebook compensation: that is, MalaMala would retain its land and the state would compensate the community at R30 000 per hectare rather than the R70 000-per-hectare market value, the state argued.

Court papers showed that in 2008, MalaMala was willing to accept an offer from the then Mpumalanga land claims commissioner of R741 million, calculated at R52 500 per hectare plus improvements on the land of R66 million.

But the offer was withdrawn when then land minister Lulu Xingwana deemed it excessive.

Now, five years later her successor, Gugile Nkwinti, is seemingly willing to entertain R900 million.

In Parliament earlier this year, while arguing the need for the new job of state valuer-general – a position that would determine the market value of land and shield government from exorbitant prices – Nkwinti was very critical of the fact that a “small, white landed class” had benefited to the tune of R10.8 billion from land bought for restitution purposes.

Dr Elmien du Plessis, senior lecturer of property law at the University of Johannesburg, said Nkwinti’s actions in the case had mystified land analysts.

“Why do you as government talk of moving away from the ‘willing buyer, willing seller’ policy, and speak of expropriation and yet when an attempt is made by the courts to move away from the strict market value approach, you oppose it?” she asked.

The whole restitution process had cost the state about R16 billion for 77 148 claims.

Last year it asked Treasury for an increase of about R6.3 billion for restitution, but only got a 14% increase to R3.4 billion in funds for restitution.

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