Blythedale resort seeks to calm jittery investors

KWAZULU-Natal’s Blythedale Coastal Resort had successfully filed for business rescue to stave off jittery investors as the court battle between more than 4 000 land claimants and developer Mark Taylor got under way in the Durban Land Claims Court yesterday.

The land claimants blame Taylor for getting them to sign a deal which, they allege, they did not understand and was illegal in terms of the Communal Properties Act.

They also allege that a draft agreement between them and the resort development company was never finalised, yet the land claim and development deals were approved by the former regional land claims commissioner, Duduzile Sosibo, on the basis of that agreement.

Further, Gugile Nkwinti, the Minister of Rural Development and Land Affairs, has alleged that his own officials “round-trip financed” the land development to the “benefit of the land owners and not the community”.

He has dubbed the deal “unlawful” and wants it cancelled by the court and the land returned to the clan.

Yesterday Taylor said several attempts to settle with the claimants had failed, resulting in the coastal resort company board – which had planned a R10 billion development on the land – agreeing to “a restructure and reorganisation of the company’s affairs”.

While business rescue administrator Karl Gribnitz allowed the hearing to continue, Taylor said he had offered a compromise to the community by “increasing their shareholding from 20 percent to 30 percent in the development, a substantial share of identified commercial properties to be developed, all income from existing commercial operations at Blythedale, and payment of R20 000 to each family, with half paid before the end of October”. He hailed the offer as a “middle ground bonanza”.

Community spokesman Jabulani Mabaso described the settlement offer over the weekend as not “close” to the relief they were seeking from the court.

Circumvent

Senior counsel for the Zwelabantu Dube Community Property Association, Stephan du Toit, argued before Judge AJ Sardiwalla that the community – who successfully claimed 3 700ha of prime agriculture and coastal land on the North Coast in 2006 – had their “(birth)right” snatched from them in a deal which was illegal.

Du Toit said the deal contemplated by Taylor was to get 1 000ha of that land transferred to Blythedale Coastal Resorts. The resort company would own 80 percent shareholding in the development and the clan 20 percent.

Taylor bought the land for R200 million from the community in 2006 in a loan and shareholding deal which Du Toit argued was designed to circumvent the law.

He said the deal contravened the Communal Properties Act which states “that a communal association may not purchase or acquire for consideration shares other than shares which were listed on a licensed stock exchange as defined by the South African Stock Exchange Control Act”.

Sugar cane farmers Roger Stewart and Patrick Sokhela were paid R200m and R400m respectively for their farms by the state in 2009.

The hearing continues continues today.