Two companies with strong links to the African National Congress Youth League and the ANC in the Western Cape have emerged as beneficiaries of a disputed deal involving prime beachfront land.
The City of Cape Town has sold the land to a hand-picked group of 17 empowerment companies, at least two of them either directly owned by the youth league or by major donors to the provincial ANC.
The companies with ANC links are led by business associates of controversial mining magnate Brett Kebble.
Although the land was put out to tender, standard procedures were flouted and the properties at Big Bay, Bloubergstrand, were sold at substantially discounted prices.
Cape Town mayor Nomaindia Mfeketo has suspended the deal pending an investigation into the circumstances that led to it being awarded to the 17 companies. The city claims that a property company employed by the council, Rabcav, and a city official compiled the list of winning bidders without input from the councilâ€™s leadership.
Among the companies that stand to make huge profits by reselling the properties are Lembede Properties, Itsuseng Strategic Investment and Freidshelf 475.
Lembede, which is headed by ANC Youth League national executive member Songezo Mjongile, is majority owned by Lembede Investment Holdings, the youth leagueâ€™s investment arm. Itsuseng is partly owned by prominent youth league members Andile Nkuhlu and Lunga Ncwana. Freidshelf is headed by businessman Sharif Pandor, the husband of Minister of Education Naledi Pandor.
Ncwana confirmed that his company benefited from the Big Bay deal but said it was Nkuhlu, not him, who was involved in negotiations. However, the council lists Ncwana as the representative of Itsuseng.
All key players in Lembede, Itsuseng and Friedshelf have close ties with mining magnates father and son Roger and Brett Kebble. They were all part of a consortium that recently acquired a R1,5-billion portfolio of assets from the Kebblesâ€™ mining house, JCI, and Randgold & Exploration through an unorthodox and complicated transaction.
Ncwana and his company are perhaps the closest to the Kebbles. Last year, the Mail & Guardian revealed that Ncwanaâ€™s Itsuseng was used by mining house JCI, which is controlled by the Kebbles, as a front in a deal involving the sale of a company called Rand Leases Property.
Also last year, Ncwana passed the Kebblesâ€™ R500 000 donation on to the ANC in the Western Cape. Itsuseng also sponsored a bash to celebrate the ANCâ€™s victory after last yearâ€™s general election, according to its website.
The Big Bay saga revises the debate about whether it is acceptable for the ruling partyâ€™s youth wing to have business interests in companies that benefit from government opportunities.
Last year the M&G revealed how the youth league, using Lembede, had penetrated the world of business. Lembede controls or has major shareholdings in a range of ventures, spanning mining, financial services, forestry, property and telecommunications. In a number of cases these ventures have depended on state opportunities — tenders, privatisations, and operating licences — which have, in some instances, created conflicts of interest for state officials.
In terms of the Big Bay property deal, Lembede and Itsuseng were each allocated four plots worth more than R4,4-million. According to estate agents, both entities stand to make more than R2-million from the resale of the plots. Freidshelf also got four plots worth R2,2-million.
The matter has angered opposition parties and labour activists. Tony Enrenreich, spokesperson for the Congress of South African Trade Unions (Cosatu) in the Western Cape, said the deal undermines the concept of broad-based black economic empowerment (BEE) by enriching a small group of the black elite.
“While we agree that the council should put in place special measures to advance broad-based BEE, equally we would appeal for measures that distinguish who should benefit from BEE and how they should benefit,” he said.
“Broad-based BEE should be about promoting social equity and not about trying to legitimate unequal ownership in the society. Those from among us who seek to find place in the rotten structure of inequality and gross materialism will be charged with conduct unbecoming a comrade and expelled from the movement.”
The revelation is the latest in a series of setbacks to hit the City of Cape Town regarding its tender system. Last year the city council came under heavy fire after a black empowerment consortium headed by businessman Tokyo Sexwale was awarded a highly discounted tender by the cityâ€™s mayoral committee to develop 14,5ha of prime beachfront land. The transaction also involved prime land in Bloubergstrand.
Leonora de Souza-Zilwa, spokesperson for the mayor, said transfer of the properties has not taken place. “The city advertised the proposed sale and objections can be made until February 14. The mayor has said she will not allow the land to be transferred unless she is satisfied the sale has been in accordance with council policy.”
De Souza-Zilwa said the sale was initially intended for broad-based empowerment companies.
Rise and rise of snappy dresser Lunga
Lunga Raymond Ncwana (28) is well known in Cape Town and political circles for his smart dressing. Those who know him say he is a regular visitor at Fabiani, one of Cape Townâ€™s most expensive designer boutiques on the V&A Waterfront.
He sits on the boards of more than five companies, including Randgold & Exploration, Rand Lease Properties and Tradek Holdings. He is also a director of Boschendal Holdings and chairperson of Boschendal Winery Distribution. All the companies are linked to the mining magnates Roger and his son Brett Kebble.
However, it was not always so. Three years ago Ncwana was like any other ordinary youth from his township of Khayelitsha, outside Cape Town. At the time he was an active member of the Khayelitsha Youth Development Forum.
Ncwanaâ€™s rise seems in part to have resulted from his association with the ANC Youth League in the Western Cape. Mbuyiseli Boqwana, a former youth league provincial secretary, this week said Ncwana signed up as a member four years ago. Boqwana said Ncwana did not occupy any leadership position. However, Ncwana was “outspoken and confident”.
“He had a lot of confidence. He was also good at interacting with people and he gave me a feeling that he could approach anyone, even the president,” he said.
Boqwana said he predicted that Ncwana would be rich. “I said a long time ago that Lunga [Ncwana] would become a millionaire. I saw it coming.”
Ncwanaâ€™s sudden wealth has puzzled many in his community. However, it is an open secret that he was set up in business by JCI boss Brett Kebble.
Kebble is on record as saying that Ncwana, and other prominent youth league players, are involved in their personal capacities in ventures through which they acquire interests in the same deals as the leagueâ€™s investment company, Lembede Investment Holdings.
Ncwana was an executive director of Lembede before he formed Itsuseng Investments along with youth league executive committee member Andile Nkuhlu. Ncwana appears to have amassed his wealth through Itsuseng, which has done a series of empowerment deals with JCI.
It is not difficult to notice Ncwanaâ€™s wealth. His peers in Khayelitsha noticed it when he started driving around the township in a state-of-the-art Porsche. — Wisani wa ka Ngobeni