19 May 2024 | 08:12 PM

Shabangu ‘misleads’ public works

Key Takeaways

According to his own version of events, property mogul Roux Shabangu appears to have been guilty of misrepresentation by signing a state lease for a building on behalf of a company from which he claims to have resigned.

The building’s financier, Japie van Niekerk, may also have paid Shabangu a fraction of the building’s value almost immediately after Shabangu successfully negotiated the lease and just before his resignation, raising the possibility of fronting.

Earlier this year, Shabangu and Van Niekerk dismissed the allegation out of hand. They did not respond to new questions this month.

While Shabangu was mounting an offensive last week against public protector Thuli Madonsela’s findings that he was awarded two police leases irregularly, he approached the Mail & Guardian to try to distance himself from a growing row over one of the leases, a building for the Independent Complaints Directorate (ICD) in Pretoria.

Madonsela’s findings on the police leases led to the firing of public works minister Gwen Mahlangu-Nkabinde and the suspension of national police commissioner Bheki Cele.

The R137-million ICD lease on a Pretoria building called City Forum has been a growing headache for Shabangu after the M&G reported that the cost was way over the directorate’s budget and that it was bigger than required. The issue was rekindled in Parliament recently.

Last month, Shabangu sent a letter to Parliament’s police committee denying he owned the building.

Blind to the facts?

Last week, his spokesperson, Lelo Zulu, emailed the M&G: “So, you really do not know to who the ICD lease was awarded, or are you just playing blind to the facts?”

A company called Majestic Silver Trading 275 owns City Forum. According to the Companies and Intellectual Properties Commission, its two active directors are Shabangu and his former business partner, Van Niekerk.

Deed records show that in 2008, while Shabangu was the company’s sole director, Majestic Silver bought City Forum using a bond from Van Niekerk’s company, HMKL3. In March 2009, Majestic Silver sold the property to HMKL3.

A month later, Shabangu signed, on Majestic Silver’s behalf, a lease with the public works department, even though the company no longer owned the building.

Three months later, HMKL3 sold the building back to Majestic Silver, and a month after that, Van Niekerk joined the latter’s board.

Earlier this year, neither Shabangu nor Van Niekerk would explain this confusing series of transactions.

Company records

Now Zulu has provided company records showing that Shabangu resigned as a director of Majestic Silver in July last year. By that time, the public works department was already railroading the ICD into the building. Zulu was also at pains to point out that Shabangu had never negotiated and signed an ICD lease.

This is correct. The lease Shabangu negotiated and signed was with the public works department and it did not specify which client department would occupy the building.

Then, according to Zulu, Van Niekerk and Shabangu had a “fall-out” in early 2009, allegedly resulting in the sale from Majestic Silver to HMKL3. The next day, she claims, Shabangu resigned.

The M&G has seen his brief letter of resignation, addressed to “the directors” and apparently signed by him, with a handwritten date of March 10 2009.

Zulu said it was mysterious that his resignation was not formally effected until more than a year later.

Zulu also provided the March 2009 sale agreement between Shabangu and Van Niekerk: HMKL3 was to pay Majestic Silver R59-million, discounting the R35-million that HMKL3 had already loaned for City Forum.

Roux’s share

An annexed spreadsheet uses a capitalisation rate and income presumably linked to the lease to value the building at R59-million. Subtracting the cost of the building, refurbishments and related costs, the business is left with R21-million. This is divided in two, with R10.5-million allocated as “Roux’s share”.

In addition to money he was already owed, “Roux’s share” was to be paid in the first three months of 2009, almost immediately after Shabangu negotiated the lease.

Zulu attempted to absolve Shabangu, based on his apparent resignation in March. “Whatever went on after March 10 2009 was not in our knowledge or interest,” she said.

However, this is contradicted by Shabangu’s signature in two instances on Majestic Silver’s behalf.

In the first case, Shabangu signed the actual lease after reportedly resigning from the company in March. Confronted with this, Zulu said that Shabangu had offered to repurchase the building from Van Niekerk “as Japie did not qualify for BEE status”.

But, she said, the deal ultimately never happened. So, when Shabangu signed the lease, “he had false hope that Japie would sell back”.


In the second case, Shabangu’s signature appears on a document on Majestic Silver’s behalf, giving power of attorney for the company to accept a bond on the building from HMKL3, from which it was purchased.

Van Niekerk’s lawyer sent two letters to the M&G, reserving his rights and refusing to respond unless it sent him a copy of the article before going to print.

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The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.

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Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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