The African National Congress effectively owns The Network Lounge, the company that hosted a controversial meeting place for business at the party’s Stellenbosch and Polokwane conferences in 2002 and last year.
This has emerged amid fallout from the Mail & Guardian‘s exposés on the ruling party’s use of front company Chancellor House, and after the ANC’s new leadership instituted a review of party investments.
Confirming the review late last month, the party said it formed ‘part of a process to establish if there are any perceived or real conflicts of interest for the ANCâ€.
Stalwart’s son
The Sunday Times last week revealed an ANC interest in asset manager Stanlib, which has since been disposed of. This investment was held through the Zandile Investment Trust, run by Nic Wolpe, son of struggle figure Harold Wolpe.
Nic Wolpe and a well-placed Luthuli House official this week denied Zandile was linked to Chancellor House as stated by the Sunday Times. Chancellor House Holdings is held by the Chancellor House Trust, which is separate from Zandile.
But there are a number of connections between the two entities:
- Wolpe, a trustee of Zandile, is also the administrator of the Chancellor House Trust.
- ANC stalwarts Henry Makgothi and Gertrude Shope are his co-trustees in Zandile, Wolpe said. Makgothi is also a founding director of Chancellor House Holdings.
- Zandile holds some of its investments, including The Network Lounge, through a company called Ukwanda Investments. Ukwanda’s directors include Wolpe, Makgothi, Shope and Chancellor House Holdings chair Taole Mokoena.
Wolpe is best known as head of the Liliesleaf Trust, which is restoring Liliesleaf Farm as a struggle heritage site. It is to open in June after extensive work funded by donations exceeding R63‑million, including R28-million from the Âgovernment.
The farm was the headquarters of Umkhonto weSizwe. It was raided in 1963, leading to the arrest of Walter Sisulu, Harold Wolpe, Govan Mbeki and Ahmed Kathrada, and ultimately the Rivonia treason trial.
Storm in a lounge
The Network Lounge attracted controversy at the ANC Stellenbosch national conference in 2002 because a number of parastatals hired space there, leading to the allegation that state funds had gone to the party.
It set up shop again at the Polokwane conference in December, leading to more controversy in spite of a reduced participation by parastals. A company spokesperson was quoted as saying: ‘The Network Lounge is a private-sector company and will make its own decisions as to whether the ANC will benefit.â€
The ownership structure suggests otherwise.
Wolpe this week confirmed that The Network Lounge is 100% owned by Ukwanda Investments, which, in turn, is 100% owned by Zandile. He described Zandile as a ‘discretionary†trust, meaning its trustees have latitude in how to distribute income.
There is little doubt, however, that the ANC is the intended sole beneficiary of Zandile. Wolpe confirmed Zandile had made disbursements but did not identify any beneficiary. Asked whether the money had gone to anyone other than the ANC, he refused to comment.
The Luthuli House official, who asked not to be named, confirmed that Zandile was affected by the ANC’s review of its investments. Wolpe and ANC treasurer general Mathews Phosa were to meet about it this week.
Wolpe insisted that, as a private company, The Network Lounge had discretion as to what it did with its income, in spite of Zandile owning it. ‘Now you’re clutching at straws — how long is a piece of string?†he said this week.
Other deals
When Stanlib — the multibillion-rand asset manager formed through a merger of Standard Bank and Liberty Life asset management firms — was empowered in 2003, Zandile was cut in with an estimated 2,25% stake in the BEE consortium.
Liberty bought out both Standard and the BEE consortium in January last year for shares and cash. The BEE partners got about R440‑million plus Liberty shares worth about R190-million. Zandile’s 2,25% translates to about R14‑million in cash and shares.
Wolpe recently exchanged emails with Saki Macozoma, who led the BEE deal, querying the value of the payout Zandile had received. Wolpe maintained this was at his own initiative, but the Luthuli House official said it was at Phosa’s request as part of the ANC’s investment review.