‘Amigo’ fraud-accused apparently broke
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Durban - Former KwaZulu-Natal Treasury boss and Ithala chief executive Sipho Shabalala, one of the main accused in the “Amigos” racketeering, fraud and corruption trial, is seemingly broke and has lost the sugar farm where he has been living since his arrest more than three years ago.
Absa Bank has foreclosed on the farm, about 10km outside Pietermaritzburg, and has the court’s sanction to sell it to recover about R6.5 million owing on the bond.
Shabalala, who was head of Ithala at the time of his arrest in August 2010, and his wife, Beatrice, are among the remaining 13 accused (including two companies), facing 17 charges relating to an alleged R144m racket, in which Cape billionaire Gaston Savoi is alleged to have paid sweeteners to provincial government officials in return for business.
In the indictment, Shabalala has been charged with taking a R1m kickback from Savoi which was allegedly laundered through a lawyers’ trust account to be paid to the ANC.
Before his arrest, the Asset Forfeiture Unit seized Shabalala’s assets, preserving them so that, if he was found guilty, they could be forfeited to the state. At the time, these were listed as the farm, the City Royal Hotel in Pietermaritzburg (owned by a company that was later liquidated), a guest house, a bed ’n’ breakfast in Botha’s Hill, two restaurants and some cars.
According to a report filed in the Pietermaritzburg High Court in September 2010 by curator Hein Hattingh, he had assets of R7.2m in restraint, including the farm, owned by Shabalala’s Othandweni Family Trust, which he valued at R5m.
He noted Shabalala was a 50 percent member of close corporation Corpclo, which traded as RJ’s in Hillcrest and at King Shaka International Airport, but which was running at a loss.
In his third and final report, Hattingh said he now only had restrained assets valued at R5.7m because he had handed back two cars, a Mercedes and a Range Rover, because there was no equity in them, and he had deducted the equity in Corpclo because it was worth nothing.
The farm – where it was reported the couple had moved, to lead a quieter life after their arrests – was still in the list of restrained assets.
Now it is to be sold and, if there is any profit after the bond is settled, it will be held by Hattingh until the outcome of the trial, which will proceed only next year.
In a recent judgment, Pietermaritzburg High Court Acting Judge Eric Nzimande said, in spite of opposition from the Shabalalas, he was satisfied they were in breach of their mortgage loan agreement which had been signed in 2007 for a loan of R16.7m with repayments of almost R200 000 a month.
During 2009, when he was the head of Ithala, the trust’s monthly payment was reduced to R105 000 a month after a lump sum of R10.7m was paid into the account by Shabalala.
“It’s common cause that no instalments have been paid since January 2011,” the judge said, noting the bank alleged that, at July 2012, the balance owed was R6.5m.
He granted judgment in favour of Absa against the trust and the Shabalalas personally for that amount, with interest.
He declared the property “executionable” but noted the interest of the roads department, which wanted to expropriate a portion of the land for a servitude, and the interests of a private company which held a right to a portion of the land.