State aided Zuma sugar mom

State institutions bent over backwards to finance the woman who bought President Jacob Zuma his private Johannesburg ­residence, a Mail & Guardian investigation reveals.

Sizani Dlamini-Dubazana, now an MP, bought the R3,6?million Forest Town home for Zuma’s use when he was sacked as deputy president in 2005. The Zuma family still uses it.

Dlamini-Dubazana has benefited from highly questionable multimillion-rand transactions funded by the taxpayer.

  • She received more than R8?million in loans from a KwaZulu-Natal development fund—part of which may have funded the Forest Town home, although she denies this. She defaulted on repayment of the loans.
  • When creditors closed in on her, government bought her KwaZulu-Natal game farm for land restitution. She stands to receive R6?million—more than double what she paid for it—though neighbours were told there was no budget to buy their farms. Dlamini-Dubazana denies preferential treatment.
Public funds may, therefore, have been used to support Zuma at a time when he was not in the state’s employ.

The question also arises whether he revealed all financial benefits in his belated declaration of interests last week. Dlamini-Dubazana declined to say whether Zuma paid market-related rent, telling the M&G last week that it was ‘very confidential”.

Dlamini-Dubazana was reportedly Nkosazana Dlamini-Zuma’s private secretary in the 1990s, when the latter was health minister and Zuma’s wife. Since Zuma’s election as ANC president, Dlamini-Dubazana’s political star has risen dramatically—she vaulted from being a Johannesburg regional ANC secretary in 2007 to the ANC KwaZulu-Natal executive in 2008. She topped the provincial-to-national nominations list in last year’s elections and was elected an MP.

Quick purchase
When Thabo Mbeki fired Zuma as deputy president on June 14 2005, Zuma lost his right to state accommodation. Eight days later Dlamini-Dubazana signed an offer to purchase the Forest Town property on behalf of Hola Recruitment and Selection Services, which she owns. Deeds office records reflect a purchase price of R3,6?million.

Zuma moved in in August, when the Scorpions, investigating him for corruption, raided the house.

Ithala loan
Still in 2005, Hola obtained a R4?million loan from the KwaZulu-Natal government-funded Ithala Development Finance Corporation. Ithala answers to the provincial finance minister, at the time Zweli Mkhize, a close Zuma ally and now premier.

Later it emerged that politically connected individuals—Mkhize’s wife included—benefited from large Ithala loans, leading the IFP to charge: ‘The public entity has effectively turned into a ‘piggy bank’ for the province’s new political elite.”

In 2008 the Sunday Times reported that repayments on Hola’s R4?million loan, obtained in October 2005, and a R4,3?million loan extended to another company associated with Dlamini-Dubazana, were seriously in arrears.

The R4?million loan was extended just a month after the September 2005 transfer of the R3,6?million Forest Town property to Hola.

Where did the money go?
An Ithala source, speaking anonymously, said there were indications the initial loan was used for purposes that included buying the Forest Town home. ‘That was the impression we got ... Dlamini-Dubazana talked very recklessly.”

This week Ithala refused to reveal the loans’ purpose and whether they had been repaid, citing client confidentiality.

Dlamini-Dubazana claimed the Ithala loans were ‘settled” and denied the initial R4?million from Ithala was for the Forest Town home. Indeed, deeds office records show that Hola obtained a full R3,6?million bond from Absa.

However, the Ithala money may have been used to bolster Hola’s balance sheet to satisfy Absa of its ability to service the bond. Alternatively, it may have helped Hola meet the Absa bond instalments of about R35 000 a month.

Dlamini-Dubazana said the Ithala loan was for a hotel she bought in downtown Johannesburg. However:

  • The downmarket hotel, which rents some rooms by the hour, should not have qualified for funding from Ithala, the mandate of which is to boost development in KwaZulu-Natal;
  • Deeds records show Dlamini-Dubazana bought the hotel through another company—not Hola, to which Ithala gave the loan—five years earlier; and
  • A R4?million “surety bond” was registered in Ithala’s favour against the hotel—but more than a year after Ithala extended the first loan to Hola. This seems no more than a belated attempt to give Ithala security for the millions it lent Dlamini-Dubazana’s company.

Money trouble

By last year Hola and Dlamini-Dubazana were in serious financial trouble. The Ithala loans were in default and at least two debt judgements had been obtained against Hola in KwaZulu-Natal.

Also, Firstrand Bank was threatening to foreclose on a R1,35?million bond it had extended to Hola in 2006 when Dlamini-Dubazana bought a game farm in Mkuze, KwaZulu-Natal. Dlamini-Dubazana confirmed Firstrand’s threat.

Her financial rescue lay in a land restitution claim by the Mkuze community against thousands of hectares in the area, gazetted in 2007: were the claim to be approved by the Land Claims Commission and the minister of land affairs (now rural development and land reform), the government would buy her farm.

In April last year former land affairs minister Lulu Xingwana approved the state purchase of 8 000ha after negotiations between the Land Claims Commission and farm owners, which included 11 members of the Biyala Pro-Active Landowners’ Association and Dlamini-Dubazana.

To the rescue
The Biyala association went to court last month to try to enforce the deal approved by Xingwana. Its court papers show that the land reform department, now under Gugile Nkwinti, had bought Dlamini-Dubazana’s land, while association members were told there were no funds to buy their land. The Biyala association told the court it had “reached the inescapable conclusion that [Dlamini-Dubazana’s] transaction was indeed fast-tracked, probably because of her political influence”.

Evidence corroborating preferential treatment includes:

  • Of an 8 000ha approved claim, Dlamini-Dubazana’s 98ha property was singled out for purchase.
  • The Biyala association says its lawyer met a Land Claims Commission official on May 7 last year to finalise the sale agreements for Xingwana’s signature on May 10. At the meeting the official received a call and left without completing the task. Deed records show that Dlamini-Dubazana’s sale agreement was signed on May 11.
  • The association’s lawyer wrote to minister Nkwinti last August to bemoan his client’s predicament. He received no substantive reply but, within days, deeds records show, chief land claims commissioner Blessing Mphela signed off on conditions relating to the transfer of Dlamini-Dubazana’s land.
  • The Dlamini-Dubazana transfer was processed by the Pietermaritzburg deeds office in just five days, after conveyancers asked for expedition because it was a “land reform project”. Though transferred on September 23 last year, the farm has not been handed to restitution claimants. Dlamini-Dubazana confirmed she is still in occupation of the property.

    Dlamini-Dubazana denied preferential treatment, saying she had agreed to receive payment only next month when the department’s new budget becomes available. But she agreed that the department “must have” settled the bond on her farm. The Biyala association says its members had also agreed to delayed payment, but this fell on deaf ears.

    Once fully paid, Dlamini-Dubazana will have received R6?million for the farm from the department. She paid R2,7?million for it on auction four years ago.

    • The Department of Rural Development and Land Reform denied that Dlamini-Dubazana had received preferential treatment when it bought her game farm, saying through a spokesperson: “An offer to acquire the land with payment taking place in April 2010 was made to both [Hola] as well as the Biyala Association; The offer was accepted by the association, but could not be implemented because of community disputes over entitlement to the land; The [Hola] offer did not experience this problem. This matter is a matter before court, and the political office the claimant occupies [it] is submitted is a side issue.”

      The spokesperson also denied the department had paid too much, saying: “The offers made to [Hola] was based on a valuation report that was conducted by a valuer who is duly registered. It is the same valuer who valued the land that is owned by the association.”

  • Additional reporting by Mahlatse Gallens

Stefaans Brümmer

Stefaans Brümmer

Stefaans is an old hand at investigations. A politics and journalism graduate, he cut his reporting teeth at the Cape Argus in the tumultuous early 1990s; then joined the Mail & Guardian as democracy dawned in April 1994. For the next 16 years (a late-1990s diversion into television and freelancing apart), the M&G was his journalistic home and launch pad for award-winning investigations focusing on the nexus between politics and money. Stefaans has co-authored exposés including Oilgate, the Selebi affair, Chancellor House and significant breaks in the arms deal scandal. Stefaans and Sam Sole co-founded amaBhungane in 2010. He divides his time between the demands of media bureaucracy (which he detests), coaching members of the amaBhungane team, and his first love, digging for dung.
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