Right royal row breaks out over Nkandla bond

Did Zuma try to trade Venda corona­tion for ac­cess to bond cash?

Sunday Times - - News | Politics - By KYLE COWAN and MZI­LIKAZI wa AFRIKA

● Pres­i­dent Ja­cob Zuma used Nkandla as se­cu­rity for an R8.5-mil­lion loan from the Venda Build­ing So­ci­ety Mu­tual Bank, which he used to pay back the money for up­grades at his KwaZulu-Na­tal homestead.

But the se­cu­rity guar­an­tee was only pro­vided nine months af­ter the loan had ac­tu­ally been granted.

Be­fore that “sham” trans­ac­tion, it is sug­gested by a Venda princess, the pres­i­dent traded on his pa­tron­age of a dis­puted claimant to the Venda throne to se­cure the funds.

Zuma’s mort­gage agree­ment with the bank is among court papers filed with the Supreme Court of Ap­peal by Masindi Mphe­phu, who is the daugh­ter of late Venda King Tshi­man­gadzo Mphe­phu.

In her on­go­ing bat­tle against her un­cle, Toni Mphe­phu-Ram­ab­u­lana, for the throne of the Vhavhenda king­dom, Mphe­phu has asked the court to be al­lowed to in­tro­duce new ev­i­dence in her ap­peal against a 2015 judg­ment in the High Court in Tho­hoyan­dou.

While she has lost sev­eral rounds in her le­gal bat­tle, in Septem­ber 2016 she got the court to halt Zuma’s plans to crown her un­cle, pend­ing the out­come of the lit­i­ga­tion.

In her lat­est ap­pli­ca­tion, she high­lights that Mphe­phu-Ram­ab­u­lana is a share­holder in Dyam­beu In­vest­ments, a com­pany that, to­gether with the Pub­lic In­vest­ment Cor­po­ra­tion, is the ma­jor­ity share­holder in VBS bank.

Zuma tried to hold Mphe­phu-Ram­ab­u­lana’s corona­tion just three days af­ter the loan was granted, she says.

Court papers show that the mort­gage was only reg­is­tered against the prop­erty sev­eral months af­ter the loan was granted and Zuma re­paid the funds to the Na­tional Trea­sury.

“What is also unusual . . . is that the bank was will­ing to lend a very sub­stan­tial sum to Pres­i­dent Zuma ap­prox­i­mately nine months be­fore its se­cu­rity in the form of the reg­is­tered bond was in place. I ques­tion on the ba­sis of the anom­alies listed above, whether the en­tire af­ter-the-fact ar­range­ment for se­cu­rity for the loan is not a se­ries of sim­u­lated trans­ac­tions or a sham.”

VBS and Mphe­phu-Ram­ab­u­lana have re­peat­edly de­nied that Dyam­beu was in­volved in in­flu­enc­ing the bank’s de­ci­sion to grant the loan. The bond note states that if Zuma de­faults on the home loan, VBS can within 20 days or­der him to va­cate the premises.

Zuma is also pro­hib­ited from re­mov­ing any “im­prove­ments and/or fix­tures and fit­tings erected on the prop­erty” in the event that he is evicted.

Zuma does not own the land on which Nkandla is built. He has a 40-year lease with the In­gonyama Trust, which was signed in 2011. Ac­cord­ing to mort­gage agree­ment doc­u­ments filed in court, Zuma leases 8.7ha of the Nxa­m­alala farm for R8 000 a year, at an es­ca­la­tion per­cent­age of 10%. The lease ex­pires in 2051.

A lawyer who deals with prop­erty in re­spect of land owned by tra­di­tional author­i­ties said any lease longer than 10 years was re­garded as “real right in land” and there­fore could be used as se­cu­rity. “One doesn’t usu­ally see this of­ten though for res­i­den­tial prop­erty,” said the lawyer, who did not want to be named.

He said the loan agree­ment seemed to be “stan­dard”, but added: “Of in­ter­est is that the lease and bond re­fer to an ex­tent of some 8ha, whereas the cer­tifi­cate of ti­tle refers to an ex­tent of over 4 000ha. The en­dorse­ments on the land are the bond and the lease. This is rel­e­vant be­cause if Zuma de­faults, the bank would ef­fec­tively ex­e­cute over the en­tire prop­erty — not only the 8ha but the 4 000-odd.”

VBS spokesman Ndi­vhuwo Khangale on Fri­day de­clined to re­spond to ques­tions, cit­ing client con­fi­den­tial­ity.

Dur­ing dis­cus­sions ear­lier in the week he de­nied any wrong­do­ing by the bank.

Pres­i­dency spokesman Bon­gani Ngqu­lunga said on Fri­day: “The pres­i­dent’s VBS Mu­tual Bank loan ap­pli­ca­tion was a nor­mal ap­pli­ca­tion and the pres­i­dent was sub­jected to what he un­der­stood was nor­mal lend­ing cri­te­ria. He has main­tained his ac­count with the bank on the re­quired ba­sis.”

He con­firmed that the Pres­i­dency had on July 15 2016 con­firmed Zuma’s at­ten­dance to of­fi­ci­ate at the corona­tion of “His Majesty King Mphe­phu” af­ter a rec­om­men­da­tion by the Depart­ment of Tra­di­tional Af­fairs.

The In­gonyama Trust de­clined to com­ment on Zuma’s loan agree­ment, say­ing it had not been in­volved.

Pic­ture. Them­binkosi Dway­isa

Pres­i­dent Zuma’s homestead in Nkandla, which is mort­gaged to the Venda Build­ing So­ci­ety Mu­tual Bank.

Masindi Mphe­phu

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