/ 20 April 2018

Ingonyama head bends lease rules

Former judge Jerome Ngwenya is once more mired in controversy about his business affairs. In 1998 his company Khuselani Security and Risk Management lost a R99-million contract with Absa over an alleged bribe.
Ingonyama Trust Board chairperson Jerome Ngwenya.

The Ingonyama Trust Board (ITB) has allegedly breached its own policies to benefit its chairperson, Jerome Ngwenya.

ITB employees, requesting anonymity, told the Mail & Guardian that Ngwenya was granted a business lease conversion by the board, despite owing it more than R132 000 in unpaid rent for his KwaZulu-Natal South Coast service station.

The conversion of Ngwenya’s lease for the garage, operated by his Zwelibanzi Utilities (Pty) Ltd — without the settlement of rental arrears — took place in August 2016.

In terms of ITB policy, all arrears owed by a tenant on a short-term lease have to be settled before it can be converted into a long-term lease.

According to staff, in the case of Zwelibanzi, of which Ngwenya, a former high court judge, is a director, this never happened.

Ngwenya failed to respond to the M&G’s calls, emails and SMS messages about the lease and several other of his business interests, which include a directorship in Zululand Anthracite Collieries. This coal mine, near Ulundi in the Zululand district municipality, is a tenant of the ITB.

Zwelibanzi Utilities was granted a lease by the ITB in 2015. Zwelibanzi runs the Adams Mission Service Station on Old South Coast Road, Adams Mission, an area south of Durban that falls under ITB control. The garage is housed in a small shopping centre, which includes a liquor store, a hardware shop and several other small businesses.

Staff at the ITB said that Ngwenya had not met an undertaking to pay the arrears by December 2016. Despite this the conversion was not revoked by the ITB.

“As part of the request to convert a short-term lease into a longer-term lease, you have to indicate if the short-term lease is up to date in terms of rentals,” said a staff member, who asked to remain anonymous for fear of reprisal. “At that time, this lease was R134 000 in arrears, which means that it has never been paid from inception.

“The board had issued a resolution that Ngwenya must have paid the arrears by December 2016. However, he was allowed to convert the lease without this happening. This is not consistent with normal practice.”

The source said that, during the same financial year that the conversion was granted, the ITB handed 13 other leaseholders over to lawyers for legal action because they had defaulted on payments.

“Other leaseholders are pursued over arrears, but in this case the normal procedures did not apply. It is not clear at this stage if the arrears amount was ever settled to this day,” the source said.

Two South Coast businessmen, Edward Mpeko and Ron Wilson, have brought separate high court claims against the ITB after it evicted them because of lease arrears. Both businessmen lost their resorts at uMnini, south of Durban, after they fell behind on payments. The ITB acted on nonpayment clauses in their leases and evicted them. Zwelibanzi’s lease is confirmed in the ITB’s 2015-2016 annual report.

Ngwenya has extensive business interests and is in partnership with King Goodwill Zwelithini through a holding company in Bayede Marketing, which markets wine and craftwork.

According to the Companies and Intellectual Properties Commission, he is a director of 11 active companies, as well as several that have been deregistered.

On Wednesday, the ITB told a meeting of Parliament’s land reform portfolio committee that it wanted to employ another 200 staff members and required an 80% increase of its budget.

The ITB’s acting chief executive, Thembeka Ndlovu, said that the trust had stopped converting permission to occupy certificates into leases, as instructed by the committee on March 7.

The ITB was told to reply in writing by Wednesday April 25 to questions about the suspension of staff members and to provide a detailed breakdown of revenue from leases. Ngwenya was also asked to provide responses to claims of irregular activities contained in a series of recent stories in the M&G.

The former judge is no stranger to controversy, and his business ethics had come under the spotlight before he became a judge in 2000.

In 2002, the M&G uncovered that, in 1998, he was aware that his partner in Khuselani Security and Risk Management, Vuyo Ndzeku, a convicted drug dealer, had tried to elicit a R10 000 bribe to fast-track an application from Swissport for a ramp-handling contract with the Airports Company of South Africa.

Ngwenya and Ndzeku were also partners in Zwelibanzi, which formed a consortium with Swissport to bid for a security and baggage handling contract, with Ngwenya’s brother Noel acting as chief executive. Swissport provided capital and expertise, and Zwelibanzi brought the empowerment component.

But Khuselani was stripped of the R99-million contract and investigated for tax violations, for which Noel Ngwenya was jailed.

In a letter to his Swiss partners, Ngwenya made it clear he was aware of the bribe solicited by Ndzeku, who at the time was a fugitive from justice; he was jailed in 2000.

Ngwenya wrote to his partners: “During January 1998 [Ndzeku] claimed to all of us that he was able to secure a letter from the minister of transport in terms of which Swissport South Africa was guaranteed a licence. Against this he demanded a sum of R10 000, claiming the same was payment to the officials in the minister’s office.

“On the contrary, the truth is that the letter is a product of fraud and the minister bears no knowledge thereof. The money advanced to Mr Ndzeku was pocketed by him.”

The letter inadvertently put Ngwenya’s standing as a judge under the spotlight, because it showed that he knew about the bribe his fugitive business partner had sought and did nothing to either stop it or alert the authorities. A complainant in a civil matter that came before Ngwenya in the Western Cape High Court in 2002 asked him to recuse himself because of the alleged bribe. Ngwenya refused to do so.

At the time Ngwenya declined to discuss the matter with the M&G. He resigned from the Bench in 2005 but it’s not clear whether the bribe scandal was the reason. Ngwenya’s 2011 application to the Judicial Service Commission for a seat on the KwaZulu-Natal Bench states that he had resigned for “personal reasons”.