Govt pension fund's R586m Klerksdorp deal: From Australia, developer blames outrage on competitors
- The Public Investment Corporation has paid R586.5 million for a part share in a stretch of empty farmland between Klerksdorp and Stilfontein.
- The PIC bought only 60% of the land.
- The remaining 40% is owned by a company almost entirely made up of the previous owners of the stretch of land, Isago@N12.
- Questions have been asked about why the PIC forked out so much for the land.
- For more visit Business Insider South Africa.
Those who are kicking up a fuss about a land transaction in Klerksdorp, which used civil servant pension money, “have no idea what’s going on,” a key person in the deal, the project's development manager Chris Crause, told Landbou.com from Australia on Friday.
It emerged last week that the Public Investment Corporation (PIC), on behalf of the Government Employees Pension Fund (GEPF), had paid R586.5 million for a part share in a stretch of empty farmland between Klerksdorp and Stilfontein. The PIC says the land will be developed as "a new mixed use precinct".
The PIC bought only 60% of the land. The remaining 40% is owned by a company almost entirely made up of the previous owners of the stretch of land, Isago@N12.
Doreen and Una-Marie Crause, respectively Crause's wife and daughter, have a 74% stake in Isago@N12. The remaining 26% belongs to a company called Moedi Bosele, which has local doctor Martin Khunou as a shareholder.
Read: Meet the tycoons behind the PIC’s Klerksdorp property deal: a quilter, a fashion designer, and a doctor
Questions have been asked about why the PIC forked out so much for land that the Matlosana municipality had valued at just R25,340,000 last year.
“We have many competitors in Klerksdorp and I am quite sure it’s them that are taking the story out of context,” Crause told Landbou.com.
He added that since Isago@N12 acquired the land after a tender process, competitors have challenged its right to develop the Matlosana Mall as well as the tender process itself.
Crause also says it’s not entirely true that the land has been zoned as agricultural land. He added that the land was part of “urban edge”, and meant for development. Only half of it remains zoned as agricultural land – the reason for this is to cut down on tax on land that will be developed at a later date.
He also told Landbou.com that only R204 million of the R586,5 million has been paid out to Isago.
See also:Govt's pension fund seems to have gifted developers hundreds of millions for empty farmland – now questions are being asked
In the meantime, agricultural organisation Suid Afrikaans Agri-initiatief (Saai) laid charges against the GEPF on behalf of Jaco Engelbrecht, one of its members, at the Brooklyn Police Station.
Engelbrecht, is a part-time farmer and teacher from Koffiefontein who contributes to the GEPF every month. He claimed that there is a 2 198% price difference between the valuation price and the price the GEPF paid to purchase the property for government employees.
"It is unoccupied agricultural land that was bought with the intention of further development. The GEPF is an entity that is supposed to manage government employees’ pension funds in an honest and responsible way. To pay such an enormous escalation for the transaction, is neither honest nor responsible,” believes Francois Rossouw, CEO of Saai.
“Isago Holdings Pty Ltd received a 40% share of the portion 97 development for an amount of nil rand. With the GEPF transaction, the value of their shares now stands at a total of R391 million,” adds Rossouw.
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