Businessman Roux Shabangu allegedly received a helicopter and R4 million in cash in kickbacks.
Businessman Roux Shabangu allegedly received a helicopter and R4 million in cash in kickbacks.

Shabangu building going under hammer

By LOYISO SIDIMBA Time of article published Aug 4, 2013

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Pretoria - Controversial businessman Roux Shabangu’s R850 million Sanlam Middestad building is going under the hammer next week after Nedbank’s bid to sell the property was accepted by the Pretoria High Court.

Shabangu, 39, the businessman whose dealings brought the careers of former police chief Bheki Cele, ex-Public Works Minister Gwen Mahlangu-Nkabinde and other senior government officials to an end, has failed to keep up payments on his R320m bond granted by Nedbank in January 2011.

Shabangu puts the value of the 36 400 square metres Sanlam Middestad building at R850m. He bought it for R220m and registered it in the name of his company, Roux Property Fund, in January 2011.

Shabangu entered into a 10-year lease agreement with the Department of Public Works, on the police’s behalf, in May 2010. The lease was later cancelled after Public Protector Thuli Madonsela declared it unlawful.

The Sanlam Middestad building has been empty ever since the lease was cancelled and tenants started abandoning Shabangu. It consists of a triple-storey retail podium with double-storey parking bays and above it an 18-floor office tower, which is being refurbished. It currently has 38 tenants in the retail section with short-term leases. The 18-floor section and some parking bays are subject to the contentious and disputed Department of Public Works lease with Shabangu.

Ten of the 18 floors have been stripped to a shell, according to the Pretoria central sheriff, who is presiding over the sale of Shabangu’s building.

The department’s former acting director-general, Sam Vukela, was also found guilty of neglect and for not properly applying his mind to the lease agreement.

In her report on the Sanlam Middestad lease, Madonsela recommended disciplinary action be taken against Vukela.

Madonsela also ordered Police Minister Nathi Mthethwa to urgently take appropriate action against Cele and other SA Police Service officials who contravened laws, policies and other prescripts in the procurement of the lease.

President Jacob Zuma later set up a board of inquiry, headed by Judge Jake Moloi, to probe whether Cele acted corruptly, dishonestly or with an undeclared conflict of interest in relation to two police lease deals he signed with Shabangu.

The other lease was for the renting of the KwaZulu-Natal police headquarters for R1.1 billion, including operational costs for upgrading buildings. Madonsela found that the Public Works department was essentially footing the bill for the improvement of properties owned by private entities.

Moloi found Cele not fit to hold office and Zuma later fired him, but the former police boss made a spectacular return in December when he was elected to the ANC’s powerful national executive committee.

Shabangu’s empire includes retail, commercial and residential properties – including the R650m Villa Del Country Estate in Mpumalanga. He also has interests in mining, transport and earth moving.

Shabangu also built the Jabulani Mall and is completing the the R1.5bn Mbabane Precinct and the R1.2bn Mogale City.

The lease saga also led to the suspension and departure of Public Works director-general Siviwe Dongwana, who returned to accounting firm Deloitte, where he is enterprise risk services director.

Shabangu said he did not know of the impending sale and referred further questions to Nedbank.

Nedbank’s Tabby Tsengiwe said he would be responding in writing but had not done so at the time of going to print.

Sunday Independent

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