Agriculture, Land Reform and Rural Development Minister Thoko Didiza has finally appointed a full nine-member Ingonyama Trust Board, which will be headed by King Misuzulu ka Zwelithini’s nominee, Thanduyise Mzimela.
Parliament’s land reform portfolio committee is tired of being “insulted” by the leadership of the Ingonyama Trust Board (ITB) and being prevented from performing its oversight function due to the entity’s refusal to account for revenue under its control.
The committee held its final meeting for the year this week and told Land Reform Minister Thoko Didiza, under whose ministry the ITB falls, that it would enforce accountability by the entity when parliament meets next year.
Members told Didiza that the ITB had consistently failed to provide them with quarterly reports and had refused to abide by the Public Management Finance Act and account for millions of rands it raised annually from commercial tenants.
They — and Didiza — are particularly concerned about the creation of Ingonyama Holdings (Pty) Ltd, a business entity set up in late 2019 and to which the ITB has “loaned” R31 million without the existence of any loan agreements.
The transactions have been flagged by the Auditor General of South Africa, who has made repeated adverse findings against the ITB and the Ingonyama Trust over failure to account for assets and expenditure.
The ITB was set up to support the Ingonyama Trust, through which the Zulu monarch has controlled all traditionally administered land in KwaZulu-Natal since the early 1990s — nearly 30% of the province.
The ITB receives just over R20 million a year from the department of agriculture, land reform and rural development and collects revenue for mining rights and commercial leases on ITB land, but its chairperson, Jerome Ngwenya, has consistently refused to account for the funds raised from businesses, farms and mines.
Didiza briefed the meeting on progress in appointing a new board for the ITB — it is currently run by an interim board — saying that new members had been shortlisted through a public nomination process.
They would now be appointed after a consultation process with the premier, the house of traditional leaders, the cooperative governance and traditional affairs ministry and the monarch, who appoints a trustee to act as chairperson.
Didiza said she hoped the board appointments would be finalised “very soon” and that a new, permanent board should be in place by the middle of January.
Members said they had a “great concern” about Ingonyama Holdings, over which they had not been able to conduct oversight as its financial statements were not being made available by the ITB.
They were also concerned about how the company was set up and how its directors were appointed.
Ngwenya and former ITB chief executive Lucas Mkhwanazi are its directors.
Didiza said that the interministerial committee appointed by the president in 2019 to deal with issues around the Ingonyama Trust had been tasked only with preparations for a meeting between then monarch Goodwill Zwelithini ka Bhekuzulu.
Other issues around the body had been referred to the line ministers concerned to deal with. They would be reporting to the presidency in the near future, Didiza said.
Didiza said that the “muddled” situation in which there was not clarity over accountability — with which she was “grappling” — would be addressed through legislative amendments brought before parliament “if required”.
Didiza said that the current legislation “does not provide for Ingonyama Holdings” and that she shared the committee’s concerns about its creation and the lack of transparency around its operations.
“As the auditor general might reflect, this has caused several engagements between the ITB and the auditor general as to how the treatment of such a holding or trust needs to be dealt with in terms of audit and accountability and the disbursement of resources,” Didiza said.
There were also concerns over the lack of transparency about how much of the revenue raised by the ITB actually made it to the traditional authorities in the province and the people living on the land under their control, Didiza said.
At present, the ITB is meant to use 10% of revenue for the trust, while the remaining 90% is meant to be for the benefit of communities living on the land.
There were “challenges of governance” which the secondment of a chief financial officer and other officials had assisted in addressing.
Didiza said the appointment of a full-time board, with which the department would sign a “compact” over mandate, governance and performance, would also help address these challenges.
Didiza told the committee that she had not appealed the ruling against the ITB over a court challenge to its residential lease programme as “we believe what the court had indicated needed to be complied with”.
“We could not do anything beyond asking the board not to appeal. As a legal entity and a juristic person, the board decided it would appeal the judgment,” Didiza said.
ITB chief executive Vela Mngwengwe said that Ingonyama Holdings was not an issue “I would like to go into” and asked that the board members present address it.
Mngwengwe said the company was incorporated “by way of a board resolution” and that its directors were “appointed by the board via a board resolution”.
“If the directors were to be removed they would have to be removed by the board through a resolution,” he said.
Mngwengwe said the trust “made money available to Ingonyama Holdings” for operation purposes.
“Issues have been raised by the AG related to the lack of terms of repayments between the trust and Ingonyama Holdings. That is what the AG flagged.”
Ngwenya was not present, but board member Linda Zama said that as a creature of statute, “the trust is accountable to this oversight committee, the trust is accountable to the beneficiaries, the traditional councils”.
“It is very important for me as an individual on this interim board that we are accountable right up to the last R10 that is in our kitty. It is a principle that needs to be respected,” Zama said.
Didiza said that the trust needed to be assessed to look at how best it should function to ensure that it achieved its aims.
“This might mean repeal. Will repeal of legislation mean dismantling the trust, or the trust can still remain in terms of the Trusts Act, with its assets? Those are the issues we have to look at legally and say what is possible and what is not,” Didiza said.
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