/ 1 June 2009

Bloem land price blows up

Free State Premier Ace Magashule has been dragged into a dirty fight over the sale of prime land to a Bloemfontein businessman who claims he is being punished for refusing to act corruptly.

But Magashule and his confidants have hit back, accusing Tebogo Koetle of Ya Rona Investments of being an opportunist who is avoiding purchasing the land at ”market price”.

The Mail & Guardian is in possession of a sworn affidavit signed by Koetle last year in which he accuses the Free State legislature’s deputy secretary, Bernard Phitsane, of soliciting bribes in 2007 on behalf of Magashule, Thabo Manyoni, former Mangaung city manager and now Free State police minister and ANC provincial secretary Sibongile Besani. At the time Magashule was ANC chair and the party’s chief whip in the legislature. The four men have vehemently denied Koetle’s claims.

Koetle’s company acquired the rights to develop 90 hectares of the farm Bloemfontein through a resolution of the Bloemfontein transitional local council in 1999. The land is situated close to the N1 freeway, adjacent to Sun International’s Windmill Casino which opened its doors in 2005.

In 1999 the council resolved that the land be sold at R7 000 per hectare (R630 000 in total) and that ”if the land is not taken up within 12 months from date of allocation, the selling price be revised”. Koetle didn’t take up the offer until 2006, when he heard the Mangaung local municipality was negotiating the sale of the land to another entity. In November 2006 his Ya Rona Investments applied to the Free State High Court for an interdict preventing Mangaung from selling the land to a third party.

According to Koetle, this was when the shenanigans began. During a March 2007 meeting between Magashule, Phitsane, Koetle and his lawyer it was ”resolved” that the matter should be settled out of court. Magashule admits that it was his suggestion. ”I attended the meeting in my capacity as the provincial chairperson of the ANC and I was approached by both parties to facilitate an amicable solution. It is not uncommon for me to intervene in matters of governance, since the ANC is the ruling party in government and has to obviously provide leadership and strategic guidance on all matters of policy, especially those aimed at empowering our people,” the Free State premier said this week.

According to Magashule it was ”obvious” that the dispute was not about the claim of Ya Rona to the land, but rather about the purchase price. The parties reached a settlement agreement in March 2007 that the land would be transferred to Ya Rona after a selling price had been established. Shortly thereafter, Koetle alleges, Phitsane came to him at the municipal office, asking for a cut of the deal.

In April 2007 Koetle, his lawyer and Phitsane attended a meeting at the Bloemfontein Southern Sun where Phitsane allegedly asked for a 10% stake in the development to be registered in the name of Lebona La Rona Project Services, a company belonging to his wife.

At a subsequent meeting at Manyoni’s office, Koetle alleges, Phitsane told him 10% was not enough and Magashule, Manyoni and Besani (who was executive director of economic development and planning at the time) also had to receive a share of the development.

”I remember well, he [Phitsane] said: ‘Tebogo, we have assisted you. We would like to be part of the development.’ Phitsane and I were talking while Manyoni sat at his desk.”

Phitsane and Manyoni this week denied that such a discussion ever took place. Phitsane, who is registered as Magashule’s business partner in the closed corporation Dinaka Trading 5, admits, however, that he had a discussion with Koetle about being rewarded for his ”contacts and information”, which had assisted Ya Rona in reaching an out of court settlement.

But, he says, talks about him receiving a 5% stake in the development were initiated by Koetle. ”I didn’t ask for shares.”

Koetle states under oath he was told during these discussion that the land would be sold to him for R1.26-million and that the municipality would be ”politically instructed” to provide infrastructure. After he refused to hand out shares in his planned development, the price of the land was pushed up to an ”unaffordable” R43-million.

Manyoni rejects this assertion, saying that two independent valuators valued the land at R43-million. Koetle disagrees, saying this valuation was done after the construction of Windmill Casino and not according to 1999 conditions.

Ya Rona did, however, accept the R43-million offer ”under duress” and obtained bank guarantees from Investec in October last year. ”But they still refused to transfer the land to us.”

Due to the current financial crisis Koetle is no longer in a position to pay the full amount at once. He recently tried to renegotiate the terms of the transaction with the municipality, but was shot down by Manyoni, who insisted he pay the agreed R43-million for the land.