- A company with links to Deputy President Paul Mashatile has pocketed R90 million from a seemingly dodgy land deal with the Gauteng Department of Human Settlements.
- In November 2022, Valumax walked away with R90 million after buying land for R188.7 million and selling it to the department for R278.8 million the same day.
- In 2006, a company acquired by Valumax in 2021 bought a piece of land for R15 million in Diepsloot and sold it to the department for R80 million three years later.
A company that has received billions in government contracts and donated millions to the ANC, and whose director paid for the upkeep of Deputy President Paul Mashatile’s former girlfriend, pocketed R90 million from a seemingly questionable land deal with the Gauteng Department of Human Settlements.
News24 can reveal in November 2022, Valumax, a property development company, walked away with R90 million after acquiring 26 land pieces from 18 property owners for R188 768 300 and then selling them to the department for R278 848 000 on the same day.
One of Valumax’s directors – Teddy Greaver – is an admitted friend of Mashatile.
In August last year, News24 reported between March and November 2022, Greaver made four payments, totalling R900 000, to Umcebo Projects.
Umcebo Projects belongs to Gugu Nkosi, a former girlfriend of Mashatile.
The report also revealed between May 2018 and February 2020, Valumax donated R29.5 million to the ANC. At the time, Mashatile was the ANC’s treasurer general.
Greaver had previously told News24 he paid the money into Umcebo Projects, at the prompting of his longtime friend Keith Khoza, to help the company pay salaries.
Khoza is a confidante of Mashatile.
Deeds office records obtained by News24 show on 9 November 2022, all 26 pieces of land were transferred from 18 landowners to Valumax at a cost of R188 768 300.
On the same day, all 26 land parcels were promptly transferred from Valumax into the department at a cost of R278 848 000.
The department confirmed the land deal with Valumax.
Its spokesperson, Tahir Sema, said: “Regarding the Pienaarspoort land, I can confirm that the department did buy 26 pieces of land in Pienaarspoort for R278.8 million from a company called Valumax.
“I can also confirm that independent valuations were conducted by the Housing Development Agency [HDA] on the land, which determined the price the department paid for this land.”The details of this can only be shared through a formal Promotion of Access to Information Act [PAIA] request.”
The HDA, an agency of the national Department of Human Settlements, is tasked with buying land on behalf of provincial governments and metros and preparing it for the development of housing projects.
It is not the first time people in Mashatile’s orbit benefitted from lucrative government contracts.
Last year, News24 reported how, between 2013 and 2017, the Gauteng Partnership Fund (GPF), an agency of the Gauteng Department of Human Settlements, bent over backward to advance several loans totalling R30 million to Nonkwelo Investments to build student accommodation.
Mashatile’s son-in-law, Nceba Nonkwelo, owns Nonkwelo Investments.
The loans the GPF advanced to Nonkwelo Investments in 2017 happened when Mashatile was MEC for human settlements in Gauteng.
Further, News24 had also reported Mashatile used two luxury homes in Cape Town owned by businesspeople Edwin Sodi and Ndavhe Mareda.
Both are beneficiaries of government contracts running into hundreds of millions.
In addition, Sodi is a benefactor of the ANC and Mashatile himself.
Evidence led at the Zondo State Capture Commission of Inquiry revealed in addition to donating R3.5 million to the ANC for the 2014 election, Sodi had also paid R370 000 directly into Mashatile’s personal bank account.
Valumax itself has received billions of rand worth of government contracts to build mega-housing projects in the province.
In 2014, the Gauteng Department of Human Settlements awarded Valumax a R5-billion contract to build 12 454 mixed-use houses in Clayville, near Midrand.
In 2017, the City of Johannesburg, in partnership with the Gauteng Department of Human Settlements, handed Valumax a R5.1 billion contract to build more than 10 000 mixed-use houses in Riverside View near Diepsloot. At the time, Mashatile was MEC for human settlements in Gauteng.
On both projects, officials appointed Valumax directly without following public procurement processes as required by the Public Finance Management Act.
Valumax spokesperson Janine Hills told News24 the company acquired the land over three years:
In the case of Pienaarspoort, our subsidiary acquired multiple land parcels over three years, advancing the rights and formulating a project tailored to a specific community’s needs. The purchase involved 25 plots from 19 landowners, subjected to a thorough appraisal by two reputable independent evaluators.
“Significant investments were made in reports such as environmental impact assessments, geotechnical studies, and obtaining development rights from agricultural to residential land, and furthermore was designated as a strategic urban development.”
The company was approached by the Tshwane metro with an offer to buy the land for housing development, she said, adding the properties were eventually sold to the government following the willing seller, willing buyer principle.
Hills added four independent valuers were contracted to conduct valuations, and the company settled for the lowest valuation.
“The valuation post-investment and rezoning aimed to ascertain the market value of the land, involving four independent valuers. We chose the lowest valuation in accordance with the International Valuation Standards Committee’s definition of an arm’s length transaction.”
Despite documentary evidence showing Valumax bought the properties in November 2022, she said the company bought the land parcels between June 2019 and February 2020.
“It is essential to highlight that we purchased these properties between June 2019 and February 2020 as the property owners and were significant investors. We were not a third party in this transaction”.
In a terse statement, the HDA told News24 the pieces of land in Pienaarspoort, measuring 433 hectares, were acquired by the department to accommodate flood victims in Mamelodi.
“Regarding the acquisition process, the HDA assisted the department with appointing three independent valuers to value the property.
“The purchase price was based on commissioned valuation reports by three independent valuers.”
Like the department, the entity also told News24 to file PAIA applications to access the valuation records.
Another dodgy land deal
The Pienaarspoort transaction is one of a number of seemingly dodgy deals involving the Gauteng Department of Human Settlements.
In 2006, a company called Safdev-Tanganani bought 237 hectares of land in Diepsloot East for R15 million.
Three years later, in October 2009, Safdev-Tanganani sold the land to the department for R80 million.
The sale agreement was concluded on the condition that the department would bypass public procurement processes and award Safdev-Tanganani a turnkey contract to develop a mega project comprising 9 520 housing units on the land located in Diepsloot East.
A land development agreement signed by the parties in 2013 confirmed Safdev-Tanganani’s turnkey appointment.
In March 2014, construction giant Esor bought out Safdev-Tanganani.
In November of the same year, affordable housing developer Calgro M3 acquired 50% shares in Safdev-Tanganani from Esor.
Calgro M3 also formed a joint venture with Esor to develop the Diepsloot East housing project. In March 2021, Valumax acquired Calgro M3’s 50% shares in Safdev-Tanganani.
Details of the agreement between Safdev-Tanganani and the department are contained in a legal opinion dated March 2022.
In January 2022, the department commissioned advocate Patrick Ngutshana to give it a legal opinion on whether the department should continue with Safdev-Tanganani’s appointment for the Diepsloot East housing development.
Further, the department also wanted to know if its land development agreement with Safdev-Tanganani remains valid.
Ngutshana’s legal opinion said:
In terms of the sale agreement, it was made a condition for the sale that Safdev will be appointed as the turnkey contractor to develop the land on terms and conditions to be agreed by the parties. In line with the deed of sale, a land development agreement was subsequently concluded in January 2013.
It is clear the department did not go out on an open tender, as prescribed in terms of Section 127 of the Constitution, read with regulations applicable at the time when this agreement was concluded, said the legal opinion.
Ngutshana concluded the department’s decision to appoint Safdev-Tanganani for the Diepsloot East project without an open procurement process rendered the contract invalid and illegal.
However, he argued until a court declared the agreements unlawful and invalid, they remained enforceable, and the department could not simply ignore them.
“Accordingly, in line with the provisions and the demands of the rule of law, these agreements may not be simply ignored by the department on the basis that they are otherwise unlawful.
“That is, until these agreements are reviewed and set aside, they remain as they are, with outside legal consequence binding on the department.” Sema did not respond to questions about the Safdev-Tanganani development.
© News24