The affordable education loan option
Johannesburg - The palatial Zimbali mansion of one of the country’s richest businessmen Mzi Khumalo is set to go under the hammer on Tuesday after he failed to settle over R17 million, including interest, he owes RMB Private Bank.
Khumalo, a former uMkhonto we Sizwe operative who spent a decade on Robben Island, will lose his five-bedroom house and an adjacent property, an unfinished hotel he tried to build with his former business partners, property development company Laurusco Developments.
Khumalo sold his shareholding in Laurusco Developments in 2008 to focus on his mining interests.
The 58-year-old secured the loans through his family trust, the Mzi Khumalo Family Trust, now known as the Mawela Family Trust.
Among its trustees were his wife Makhosazana, his former business partner and asset manager Charles Graham and Constitutional Court Justice Raymond Zondo, according to papers filed at the Johannesburg High Court. Zondo resigned as a trustee more than three years ago.
Khumalo accepted liability including interest, damages, taxes, costs and whatever charges were owed by the trustees. The trustees had limited liability of R6.5m.
The trustees were supposed to make R10.5m in capital payments and pay R2.4m as collateral for the three bonds.
Khumalo took out the bonds between 1998 and 2004. The Mzi Khumalo Family Trust bought the land on which the adjacent properties stand for R475 000 and R510 000 in September 1996 and November 2002 respectively.
The properties are on Camwood Street in Zimbali.
According to deeds office records, Khumalo also took a R500 000 loan from Ansbacher SA, which was also owned by FirstRand like RMB Private Bank.
RMB Private Bank wrote to the trustees in March 2011, informing them that they were in arrears of nearly R2.9m and gave them seven days to pay.
The bank also threatened to institute legal action to recover the money.
RMB Private Bank also told the trustees they were in danger of being hit with “adverse classifications of consumer behaviour such as delinquent, default, slow paying, absconded or not contactable”.
“The trustees did not react to the letter of notice and failed, refused and/or neglected to settle the amount,” RMB Private Bank said in court. None of the trustees responded to the letter, according to RMB Private Bank.
It also offered to refer Khumalo and the trustees to a debt counsellor to resolve the matter and formulate a plan to bring their payments up to date. Khumalo has also been slapped with a costs order and must also pay the sheriff’s fees.
Khumalo was also chairman of Durban-based professional soccer team Golden Arrows, in which he held a stake bought in August 2004.
This was among the business interests he forfeited to the Reserve Bank in 2011.
Khumalo also owns a company, Metallon Gold, which is the biggest gold producer in Zimbabwe.
Last year, mining consultancy SRK Consulting estimated the value of Metallon Gold at $323m (more than R3.2 billion).
In 1996, Khumalo became the first black person in the country to take control of a mining house when he took over Johannesburg Consolidated Investments, the country’s fourth largest gold producer at the time, according to Martin Plaut and Paul Holden’s book Who Rules South Africa?
On Friday, one of Khumalo’s right-hand men, not authorised to speak on record to the media, said the businessman had secured funding to avert the sale but RMB Private Bank’s lawyers were not available to confirm the claim.
Despite promising to respond to The Sunday Independent’s questions, they failed to do so.