A new book alleges Kerzner made a deal with the NP to evade extradition to the Transkei to face bribery charges, write Madeleine Wackernagel and Mungo Soggot
Pik Botha has denied sensational allegations that the National Party government agreed to shield the gambling supremo, Sol Kerzner, from bribery charges in the Transkei in return for a business favour.
The allegations – made in a new biography, Kerzner Unauthorised by Allan Greenblo – are at the centre of a legal battle between Kerzner and the publisher, Jonathan Ball. The book, which was due to be launched this week, has been held back pending a high court decision on Kerzner’s bid to block it. The book also details, for the first time, the allegations and counter-allegations at the centre of the acrimonious divorce case between Kerzner and the former Miss World, Anneline Kriel.
Greenblo – a former financial journalist who now heads BDFM Publications, the owner of Business Day and Financial Mail – claims that Kerzner was given amnesty for the Transkei corruption charges after agreeing to save Sun International’s hotel operations in the Comores.
Kerzner admitted to the Harms Commission in 1988 that he had paid R2-million to Transkei Chief George Matanzima in return for gambling rights. Despite this admission and an investigation lasting almost 10 years, no action has been taken against him.
The then attorney general of the Transkei, Christo Nel, informed Parliament in April this year that he had decided not to prosecute Kerzner because new information had come to light and because a key state witness had died. Nel never revealed the nature of this new information. His decision not to prosecute paved the way for the United States gambling authorities to award Kerzner a licence for his Atlantic City resort.
Greenblo says in his new biography that the spice islands had allegedly been used by South Africa as a conduit to smuggle arms to Renamo. The South African Defence Force also had hi-tech monitoring equipment on the islands. Pretoria had helped fund the hotels, but they had flopped because of a combination of civil unrest and high transport costs.
Greenblo writes that a month after Sun International announced it would pull out of the Indian Ocean islands, in mid-1990, Kerzner struck a deal with Botha in a secret meeting in Pretoria. By then Kerzner had cut ties with Sun International and shifted his business focus away from South Africa.
According to Kerzner Unauthorised, the conversation between Kerzner and Botha went something like this:
Botha: “I’ve got a problem. Your pals at Sun International are not interested in continuing on the Comores. Will you help me out and take it over?”
Kerzner: “Okay, but I want something in exchange. You get the [Bantu] Holomisa government in the Transkei off my back and give me a South African government guarantee that I won’t be extradited to South Africa to stand trial for bribery.”
Greenblo writes that Kerzner’s private company, World Leisure, then spent R7- million recapitalising the hotels. But Botha scoffed at the allegation this week, saying it was “absolute bull”.
He said: “It is a very strange thing to me that this book, apparently, is appearing more or less at the same time that Sol is making headway in other countries of the world. I am very suspicious at the timing of such nonsense.”
Botha said the “whole thing with Sol Kerzner was dealt with on the basis of legal advisers. It never had anything to do with anything in the Comores.” The former foreign affairs minister said the Cabinet’s decision in August 1991 over Kerzner’s extradition was based entirely on legal facts. He insisted he did not have the power to twist the arm of the Transkei attorney general.
Botha confirmed that the government had spoken to hotel groups – including Kerzner’s company – to try to save its investment in the Comores and encourage investment in the islands. “To imply that I could conduct a conversation of that nature with Sol or any of his legal advisers is really libellous,” he said.
The publisher, Johnathan Ball, has agreed not to distribute the book before a Johannesburg High Court hearing on December 1 to decide whether or not an interdict should be granted. Other allegations in the Greenblo book include:
* Details of Kerzner’s close relationship with Lucas Mangope, former president of Bophuthatswana, which ensured that Sun benefited from very favourable tax regimes and a gaming monopoly in the homeland. After Kerzner split from the group, Mangope insisted he stayed in charge of the Sun Bop division: no Sol, no deal, and no more exclusive gambling rights.
* The charge that management contracts are used prolifically to obscure the companies’ – and by implication Kerzner’s – real earnings. Nowhere is it detailed what contracts exist – or existed – between Kerzner and Sun International companies, either in his personal capacity or through his private company, World Leisure. But in the case of Sun Bop there is evidence pointing to Kerzner as beneficiary of the management fees.