Forner ITB chairperson Jerome Ngwenya. Photo: Supplied
The Ingonyama Trust Board (ITB) has opened a criminal case against its former chairperson Jerome Ngwenya and two other people over the alleged theft of R36 million from the land entity in the lead-up to his dismissal by King MisuZulu ka Zwelthini in 2023.
The Mail & Guardian can reveal that ITB chief executive officer Vela Mngwengwe submitted an affidavit requesting that the Directorate for Priority Crime Investigation
(the Hawks) pursue theft charges against Ngwenya, his former personal assistant Suewellan Ellis and lawyer Philani Jafta, in October.
The charges stem from the unlawful diversion of revenue from rentals and land sales intended for the ITB to Ingonyama Holdings, a “rogue” subsidiary of the ITB which is run by Ngwenya and which he has refused to relinquish control of.
The ITB has been unable to account to parliament with regards to Ingonyama Holdings because it cannot get access to its financials as Ngwenya — who it attempted to remove as a director and failed — will not release them.
The board is under fire from the king, who in December attempted to suspend its members, Mngwengwe and ITB chief financial officer Siyadumisa Vilakazi, with whom he has publicly stated he cannot work.
However, land reform minister Mzwanele Nyhontso stepped in and countermanded the king’s instruction, saying that MisuZulu does not have the powers to suspend the board members.
The king is set to meet both the minister and parliament’s land reform portfolio committee, to which he is meant to account in his role as chair of the board, in the coming weeks.
In an affidavit handed to the Hawks for the purpose of instituting theft charges, which the M&G has seen, Mngwengwe said he had discovered that revenue from the sale of land to the eThekwini municipality and subsequent occupational interest had been paid unlawfully to Jafta Incorporated and Ingonyama Holdings by conveyancers Mason Incorporated on Ngwenya’s instruction.
Mngwengwe had then “sought more information from Mason Incorporated since I wanted to immediately recover the funds that appeared to have been stolen by Mr Sipho Jerome Ngwenya”.
His investigations revealed that more than R5 million had been paid unlawfully into the account of Ingonyama Holdings, in a series of transfers, on the written instruction of Ngwenya.
The first payments of R120 000 and R190 000, for occupation rent collected from eThekwini, were paid to Ingonyama Holdings on 16 May 2022.
Mngwengwe said Ngwenya’s written instruction referred Mason Incorporated to ITB staff member Ellis for enquiries, implying that she “acted together” with Ngwenya “to facilitate the unlawful transfer of Ingonyama Trust funds from Mason Incorporated to Ingonyama Holdings (Pty) Ltd”.
“The transfer of Ingonyama Trust funds from a third party [Mason Incorporated] to Ingonyama Holdings needed to be authorised by the board since Mr Ngwenya had no delegation to make that kind of decision without a board resolution,” he said.
Mngwengwe said that Ngwenya was aware of this as he and fellow Ingonyama Holdings director Lucas Mkhwanazi had earlier requested a loan of R21 million from the Ingonyama Trust.
“The effect is that Mr Ngwenya and Ms Ellis stole the combined amount of R310 000 of Ingonyama Trust funds and got such funds unlawfully transferred from Mason Incorporated to Ingonyama Holdings,” he said.
A further R300 000 in occupational interest from a land sale, to the value of R30 million, was unlawfully paid to Ingonyama Holdings on Ngwenya’s instruction on 8 August 2022, followed by a further R5 million.
Then, on 23 December 2022, Mason Incorporated paid R30 510 265.66 into the trust account of Jafta Incorporated, again on Ngwenya’s written instruction.
Mngwengwe said he had written to Jafta to try to recover the R30 million but that he had refused to cooperate, quoting attorney-client privilege as the reason for doing so.
He realised that Jafta had “decided to align himself with the unlawful actions” of Ngwenya and had ceased communicating with him.
“It is my firmly held view that Mr Ngwenya has committed crimes in the manner in which he misappropriated the Ingonyama Trust funds I have described in this affidavit,” Mngwengwe said. “He appears to have been assisted by Ms Suewellan Ellis and Mr Philani Jafta of Jafta Incorporated.”
Mngwengwe said it was “of particular significance” that Ngwenya “did not just steal money that was due to the Ingonyama Trust” as more than R4.6 million of the revenue from the sale was due to the South African Revenue Service in value-added tax.
The affidavit by Mngwegwe is understood to be the second he has submitted to the Hawks on the alleged theft of ITB funds by Ngwenya.
In an earlier filing he asked that the priority crime unit investigate the payment of R41 million to Jafta and Ingonyama Holdings, which was subsequently “lost” in a dubious investment with AIN Private Capital, which was authorised by Ngwenya.
The M&G exposed the transactions at the time they took place in late 2021 and early 2022, after staff at the ITB blew the whistle, resulting in the dismissal of Ngwenya by MisuZulu in February the following year.
The ITB, which administers nearly 3 million hectares of traditionally controlled land in KwaZulu-Natal on behalf of the Zulu king, has also taken civil action against Ngwenya, Jafta and Jafta Incorporated, his legal firm, to force them to return the money they allegedly stole.
The civil action was filed in the Pietermartizburg high court in November by Mngwengwe and is set down for hearing on 24 March.
Mason Incorporated, the conveyancers who released the ITB funding to Ingonyama Holdings on Ngwenya’s instruction, are also cited as respondents in the case but no relief is sought against them.
In his notice of motion before the court, Mngwengwe asked that it set aside Ngwenya’s unauthorised instruction to pay the amount of R30 510 265.66 into Jafta’s bank account and to declare it unlawful.
He asked the court to compel Ngwenya to repay the money to the ITB within 30 days of its order being granted.
Mngwengwe told the court that the agreement between the ITB and the eThekwini municipality for the sale of land at Hammarsdale for just over R30 million had stipulated clearly that payment was to be made to the ITB after the sale was concluded.
He said the agreement had subsequently been amended by Ngwenya with no approval from the board, which had not given approval for a payment to be made to Ingonyama Holdings or for any early payment to be made.
Further, the amendment was only made after the R5 million had already been transferred to Ingonyama Holdings.
Mngwengwe said Ngwenya had written to Mason Incorporated on 22 December 2022 instructing them to pay the balance of the R30 million into Jafta’s account, again with no board authorisation.
The money was paid the next day.
He said there was no record of any delegation of authority by the board to Ngwenya to divert the money to Jafta or Ingonyama Holdings or any resolution to this effect.
Ngwenya had, therefore, been in breach of his fiduciary duties as chairperson of the board by acting in a manner which was clearly not in its best interests. He had been asked to explain his actions in a satisfactory manner, or return the money, but had failed to do either.
Mngwengwe said it would be “just and equitable” if Ngwenya were to be ordered to return the diverted funds to the ITB, with interest, and to pay the costs of two counsel.
Ngwenya did not respond to calls and emails from the M&G.
Hawks spokesperson Colonel Katlego Mogale had also not responded to queries from the publication at the time of writing.
Mason Incorporated director Rob Harris said they were aware of the application but had not yet met to discuss what – if anything – they would do with regard to the matter.