By Sipho Khumalo & Greg Arde
KwaZulu-Natal MEC for Finance and Economic Development Zweli Mkhize says his wife, May, received loans of R13-million from the state-funded Ithala Development Finance Corporation to buy and run a farm.
The opposition Democratic Alliance has called for scrutiny of this deal - and others - to isolate any potential conflict of interest.
Mkhize issued a statement on Thursday confirming that his wife had loans with Ithala - R11,7-million to buy a farm and R1,3-million for working capital. He described his wife as a "professional and a businesswoman in her own right (who) has dealings with other financial institutions".
"The loan obtained through a private company, Cedar Fall, is in respect of the purchase of a farming operation. This is a sugar cane and beef operation that has been in existence for some three decades," said Mkhize. He said the loan was secured at prime interest rate.
The leader of the DA in the KwaZulu-Natal legislature, Roger Burrows, said Mkhize's statement was prompted by a series of questions posed by DA MP Johan Krog to all MECs.
It also emerged this week that Ithala had granted loans of more than R28-million to members of the provincial legislature.
According to Ithala's 2006/06 annual report, members of the legislature and senior management of the department of finance and economic Development received loans of more than R28-million from the institution.
The issue of a loan to Mkhize's wife comes amid controversy generated by the government's Nguni cattle project - which saw politicians' wives receiving government cattle - and is likely to set tongues wagging.
Burrows said: "I would presume that these matters will be the subject of consideration both by parliament's finance portfolio Committee and the standing committee on public accounts.
"The question of whether any potential conflict of interest arises in such cases must be a matter for consideration. Certainly the Democratic Alliance will ensure that this is fully considered."
He said that both the standing committee on public accounts and the finance committee were already considering the issue of who had benefited from loans made by Ithala.
"The DA believes that the best way to resolve any rumours of possible conflict of interest is for the legislature to be supplied with all the possible information that it requires to carry out its oversight mandate. Only then can these matters be resolved," said Burrows.
Ithala's Zama Luthuli said yesterday that a total of five loans made up the amount of R28 223 000. "None of the loans granted carry preferential rates or terms more favourable to similar loans granted by other banks. None of the loans bear interest at rates below prime. In addition, Ithala does not only give loans to those who cannot access finance through commercial banks."