Gupta compound to be sold after high court rules lease is invalid
The high court in Johannesburg has ruled a lease entered into by Gupta associate Ashu Chawla and a certain Sivalingam Pillay for the Saxonwold Gupta compound is invalid, opening the door for the property to be sold.
The business rescue practitioner (BRP) of Confident Concepts, which holds a large portfolio of the Gupta properties, struggled for three years to sell the sprawling property, with Pillay saying he signed a sevenyears lease with Chawla.
Under the purported agreement, Pillay was to pay R15,000 a month for the three mansions in the compound. The agreement, signed in February 2018, was to lapse in 2025.
The BRP eventually approached the court seeking to evict Pillay and market and sell the properties as part of the business rescue process.
Pillay admitted in court to not paying rent since the commencement of the lease in 2018. However, he said this was offset by him having spent more than R2m on security costs for the property.
He said since this amount exceeds the outstanding rental of about R600,000, he is not in breach of his lease obligations. But he failed to provide proof of the R2m security expenditure.
The presiding judge referred to as “unusual features” of the lease, particularly the provision that if the lessor cannot provide security, then the lessee is entitled to do so and set this off against the monthly rental.
Judge Norman Manoim said this is not the only unusual feature of the lease which led to the BRP accusation that it is a simulated transaction.
“The first curiosity is about its timing. It was entered into on 2nd February 2018 just two weeks before the decision by Chawla to place Confident Concept into business rescue. Thus, the timing is strongly suggestive that the lease was entered into when Chawla had full knowledge of the pending application for business rescue and sought to place the properties in convenient hands,” the judge said.
“The rental of R15,000 is only to become payable after three months and not to increase for the first two years of the lease, thereafter escalating by 7%. For properties whose purchase price exceeded R20m this is a substantial bargain on the rent.”
The property took centre stage at the Zondo commission of inquiry into state capture. It is at this property the Gupta family is said to have captured the state. Several people fingered in the state capture project, including Jacob Zuma, Matshela Koko, Brian Molefe and Anoj Singh, were among those testifying to having visited the property.
Manoim, in a judgment handed down last week, gave Pillay 30 days to vacate the premises, failing which he ordered the sheriff of the high court to “eject and evict” him and any other person who might be occupying the property.
Chawla is said to have played a role in facilitating state capture on behalf of the Gupta brothers, Tony and Rajesh.
Home affairs fired senior official Major Kobese in March for attempting to facilitate the illegal processing of visas for Chawla and others in Ethiopia and the United Arab Emirates (UAE).
At the time of this offence, Kobese was director for appeals. SA is still trying to get Atul and Rajesh Gupta back to the country after the UAE in April dismissed SA’s request to extradite the brothers.
The country ratified an extradition treaty with SA in April 2021, a move the government hoped would lead to the return of the Guptas to face charges.