Zim to blame for tycoon’s woes

2013-10-09 00:00

THE Reserve Bank of Zimbabwe was to blame for South African mining tycoon Mzi Khumalo almost losing his Zimbali home, his accountant said yesterday.

The multi-million-rand golf estate home at the up-market address was expected to be auctioned off at the instruction of First Rand Bank (FRB) at the sheriff’s office in Stanger at 10 am yesterday.

With less than an hour to go before the properties went under the hammer, the auction was called off.

Alan Jacobs of Mendelow-Jacobs Attorneys, acting for FRB, said an arrangement was made an hour before the auction took place.

Khumalo’s home is registered in the name of his family trust, the Mawela FamilyTrust.

The trust’s accountant, Sifiso Mkhwanazi, who says the house has a market value of R40 million, denied reports that Khumalo was hard up for cash, adding that he has massive interests in Zimbabwe and that all his businesses are offshore.

“Each country has different exchange control regimes, which sometimes affects his cashflow in South Africa. In Zimbabwe, there are difficulties in withdrawing money, therefore we ended up with the situation we are currently in [with the house up for auction],” said Mkhwanazi.

He said Khumalo has a revolving loan facility in South Africa to pay for the home’s upkeep; however, when this had reached its limit due to difficulties in getting money into the country, FRB called in its outstanding loan.

“Initially, they demanded we pay R12 million [to settle his account with the bank] by August 31. His accountant in Zimbabwe asked the RBZ to release the funds, but there were delays in the approval and we missed the deadline.

“The new settlement amount is R13 million, with the extra amount being penalties. A payment schedule has been agreed upon with the bank,” said Mkhwanazi.

He said Khumalo is certainly not short of cash.

“He owns the biggest mine in Zimbabwe. He is not having a cashflow problem,” said Mkhwanazi.

Khumalo owns Metallon Gold, which is the biggest gold producer in Zimbabwe.

In October 2012, sister paper City Press reported that the South Gauteng High Court issued a default judgment against the 57-year-old businessman, his family trust and its trustees for the non-payment of about R17 million on three bonds and that he was expected to lose his Zimbali home. The bank’s lawyers, Mendelow-Jacobs Attorneys, sent the letters to the trustees on March 30 and April 29, 2011.

Khumalo is a former political prisoner who spent 12 years on Robben ­Island for his activities as an ­Mkhonto weSizwe operative. Opting out of politics when released, in 1991 he became a business broker, rising through the business ranks and serving on several boards. In the late 1990s, he eventually took control of the majority stake in one of South Africa’s largest gold producers, JCI, but has since disinvested from South Africa.

FRB’s lawyer, Jacobs, said a confidential agreement was reached yesterday morning.

“My client is happy. Mr Khumalo has accepted a payment arrangement,” said Jacobs.

He said the details of the agreement were “confidential” but added that all parties accepted the terms.

According to the Stanger sheriff’s office, there were over 300 calls of interest made for the property, with a number of potential buyers having already arrived before 9 am.

Khumalo’s lawyer, Sikander Tayob, confirmed the deal.

“It has been amicably resolved,” said Tayob.

The lowdown on the house

THE five-bedroom mansion is built over two plots with two homes joined. Each plot was bought separately.

Lightstone, a property valuation service used widely by South African estate agents, said the properties on Camwood Street are separately valued at R7,6 million and R8,3 million respectively, according to the municipal valuation.

Records show that between the two plots, Khumalo borrowed approximately R16 million from the bank. He bought the first vacant lot in 1996 for R475 000 and borrowed a combined R10,5 million from FRB and its subsidiaries.

The second lot was bought in 2003 for R510 000 for which he borrowed R8,5 million from FRB.

Khumalo, who is currently in the United Kingdom, was unable to answer any questions, but he did refer the newspaper to Mkhwanazi, and said this was “not unusual”.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.