Developer in row over R500m BEE deal
● Thirteen years ago Manie Floris thought he’d bought a chunk of central Stellenbosch — a municipal development worth about R500m. Two court cases and a heart attack later, Floris is still fighting for it, the last man standing in a massive BEE failure that still haunts the winelands town.
In April, Floris and his business partners will return to court seeking damages to the tune of about R100m. They say the Stellenbosch council denied them the deal of a lifetime when it cancelled the tender for the redevelopment of the town’s historic core.
“I lost everything because of this project,” said Floris, a former Absa bank director and property developer. “I thought I had finally got the deal I had been working towards my whole life, and then it was taken away for political reasons.”
Floris is unsure if he has another 13 years to wait for compensation: two years ago he was diagnosed with cancer and had half his stomach removed.
But standing in his way is a resolute municipality, which insists it did the right thing by terminating the sale of the oldest part of town to Floris’s Fusion Properties.
The deal was championed by the then ANC-led council as an attempt to redress apartheid-era property disparity.
However, the DA took over months after the tenders were awarded and said the deal was irregular. Instead of finalising a new public car park and retail and residential developments, known collectively as tender 34, it took legal action to halt them.
In an affidavit before court, Floris claims the DA used tender 34 to employ “swart gevaar” tactics during its 2006 election campaign. “It was unthinkable to these people that a coloured grouping would develop a property in what they considered to be their exclusive domain,” Floris said.
A particular frustration is the council’s alleged refusal to comply with a 2009 high court ruling that ordered it to consult with the successful bidders about bid objections. As a result Floris is the only one of the original bidders still contesting the matter, with partners in his new company, Asrin Property Developers.
Fusion’s legal representative, Chris Schoeman, said the council’s delaying tactics were similar to those employed by parliament in the Nkandla controversy.
“Their plan was simply to out-litigate the black empowered groups which had tendered and won — and they did so quite successfully because over the years all but us have fallen away.”
However, the Stellenbosch Municipality insists it has complied with the 2009 judgment by consulting affected bidders. Declining to comment on the legal spat while it is before court, the municipality said it remained committed to spatial restructuring “by bringing lower-income, and often disadvantaged people, into areas where there are major economic opportunities, with regards to jobs and consumption”.
Documents seen by the Sunday Times show the council commissioned a forensic report in 2007 to probe tender allegations relating to tender 34.
“The allegations entailed that municipal employees … had colluded with external parties to deal with municipal-owned land for their own and others’ benefit and that tender 34 was used to achieve this goal,” the report said.
Council minutes from 2014 say the reasons for scrapping the tender included questions over the value of the land and the agreed price, and changes in Fusion’s shareholders and management. The council also raised concerns about Fusion not submitting documents on business plans and finances.
Floris rejected these points this week and insisted the council had effectively scuttled a genuine attempt at transformation.