Johannesburg - Controversial businessman Roux Shabangu emerged victorious on Tuesday after the Constitutional Court ruled he could not be legally compelled to pay the R82million his company owes the Land Bank.
In 2006, Shabangu’s company, Westside Trading, clinched a R100m loan agreement with the bank for the purpose of buying and developing properties. However, in 2007 the bank learnt that the loan was invalid as it was not empowered to issue the funds.
In terms of the Land and Agricultural Development Bank Act, the bank’s powers are confined to promoting and supporting programmes that advanced equitable ownership of agricultural land by historically disadvantaged South Africans.
Despite the clause contained in the Act which effectively prohibited the loan, Westside had already spent R51m of the R100m loan on buying properties. Of the remaining R49m, it had spent up to R11.5m, which it planned to use for professional fees and township investment.
Following negations between the bank and Westside, the company agreed to pay back R82m in 2009.