Why did Brian Molefe’s friend and former colleague at the PIC sell him a house at a steal and how is this connected to the sale of the Sunday Times and its sister publications, asks Adriaan Basson.
In February 2017, shortly after the former Eskom and Transnet CEO Brian Molefe was sworn in as an ANC MP in one of then president Jacob Zuma’s desperate last moves to capture National Treasury, I received a curious phone call.
Molefe, who had then been on the Radical Economic Transformation (RET) campaign trail, singing from the Gupta-sponsored Bell Pottinger hymn sheet, made a spectacular return to Parliament and was hotly tipped to become finance minister – after his ANC membership form was mysteriously found in the North West.
By then, Molefe’s proximity to the Guptas had been established by former public protector Thuli Madonsela and it was clear that he played a central role in the capture of South Africa’s two most strategic state-owned enterprises by the family from Saharanpur who loves bling weddings.
Back to the hot tip: the man on the other side of the line said I should look into a luxury property bought by Molefe in January 2016 in the upmarket Cornwall Hill Estate in Pretoria.
Molefe paid R10m – R7m less than what the “platinum home” property was originally advertised for. “Look at a guy called Tshepo Mahloele.”
The name rang a bell. Uncle Google confirmed: Mahloele is from the Molefe-era of senior Public Investment Corporation (PIC) suits who later became big private sector players. This was in the days of Thabo Mbeki.
Remember that Molefe was a major Mbeki man before he moved over to the dark, sorry, Zuma side.
Mahloele headed up the Isibaya Fund in the PIC and was closely involved with Molefe’s efforts to set up a Pan African Infrastructure Development Fund (PAIDF) that would invest the PIC’s funds on behalf of the state’s pension fund in projects on the continent.
This project led to the establishment of Harith General Partners (HGP), a boutique fund manager, with Mahloele as CEO in 2007. HGP was started with PIC money.
Forward a decade and Harith is a burgeoning business with projects and assets in Ghana, Tunisia, Botswana, Mauritius, Kenya and South Africa.
Back to the house: a few searches later, we established that the R10m, five-bedroom house with designer kitchen, cigar lounge, gym and four garages was sold to Molefe by Red Coral Investments 86, a shelf company of which the directors are Mahloele and his wife, Elizabeth.
Why did Molefe’s friend and former colleague at the PIC sell him a house at a steal? We asked both men.
Molefe didn’t bother to answer, while Mahloele denied any impropriety and labelled the transaction “above board”. He said the property was “sold above the purchase price and we made a very good return… there is nothing improper about this sale. There is no connection between the private sale of the property, the PIC or Harith. I have known Brian long before our PIC days and our relationship has never been characterised by wrongdoing,” Mahloele commented.
But he didn’t clarify the question at the heart of what may look like an innocuous story: why the massive discount when the house was on the market for R17m and the Mahloeles had an offer for R14m?
Local estate agents were shocked with the selling price of R10m in an estate where houses go for between R15m and R20m. Somehow, the Mahloeles decided to give Molefe a discount and didn’t bother to explain why.
The story showed two things: the close proximity between the then would-be finance minister and a big former PIC player, who still manages the infrastructure fund’s investments for the PIC, and that Mahloele had benefitted Molefe financially by selling him the property at a bargain price. The reason for this remains unknown.
Last week Mahloele’s company, Lebashe Investments, where he is joined by former deputy finance minister Jabu Moleketi and chartered accountant Warren Wheatley as directors, bought the Sunday Times and all Tiso Blackstar’s other media assets, including Business Day, Financial Mail and the Sowetan, for R1bn.
Tiso Blackstar CEO Andrew Bonamour, who was never in it for the long haul, has been looking for a buyer for a while after sucking the media company dry, closing titles, laying off staff and failing to deal with newsroom discontent.
The fact that a buyer has stepped in to save journalists’ jobs must be applauded, but these are influential titles and the new owners should be scrutinised thoroughly. Why did Mahloele do the deal and what does he want to achieve?
Rumours abound that the PIC is behind the acquisition after its disastrous investment in Independent Media through the Sekunjalo Group, but Lebashe has stated that the purchase is from its own reserves.
Mahloele has made the news for all the wrong reasons since 2013, when the Mail & Guardian linked him to a controversial PetroSA transaction to buy petrol stations. Global bank HSBC was fired as transaction advisers and replaced with Harith, at a cost of R19m to PetroSA.
In July last year, UDM leader Bantu Holomisa was gagged by the North Gauteng High Court for making disparaging remarks about Mahloele and his business partners in relation to their PIC funding, the formation of Harith with PIC money and Mahloele’s move from the PIC to Harith.
Mahloele now owns some of the most influential media titles in South Africa. We need to know much more about what he wants to do with them.
– Basson is editor-in-chief of News24.