Cele landlord faces ruin

PRETORIA businessman Roux Shabangu says he faces financial ruin while investigations into the leasing of his two buildings in the city and in Durban to the SA Police Service continue. Speaking to Sowetan at his offices in Centurion, Shabangu said he was losing R10 million a month while the Special Investigations Unit and Public Protector Thuli Madonsela investigated if there were any irregularities in the leases signed between him and the SAPS.

President Jacob Zuma ordered the investigations last month following a public outcry about General Bheki Cele having authorised the leases - R500 million for the Sanlam Middestad Centre in Pretoria and the Transnet Building in Durban for more than R200 million - without tenders. Shabangu said as far as he was concerned the lease agreements he signed with the Department of Public Works were binding and he would go to court. "There is no turning back. I can't go back to the bank and the seller and say I'm sorry the deal fell through. "The contractors are already on site and have done more than 60 percent of the work. Unfortunately, we could not stop the work. "But how is it possible that all leases are legitimate except mine? This despite the fact that 80 percent of leases signed by the DPW followed the same procedure?" Shabangu asked.

He said he was paying R3 million and R5 million for the bonds. He had also set aside R2 million for renovations. The SAPS were supposed to move in in November. The media-shy billionaire, with interests in property and mining, said the bank was already threatening him with legal action because he could not honour contractual obligations. He said he started negotiating the leases before Cele took over. Shabangu said he met General Hamilton Hlela who told him the police were looking to build their own headquarters and not rent anymore. "After making a presentation to Hlela and his colleagues, he told me he liked it but it had to go through several processes including Department of Public Works. I then went to the seller and paid a deposit of R1 million before I even signed the deeds of sale," he said.

The Sunday Times reported last month that Shabangu had bought the property shortly before it was leased by the department for the police. He said he bought the building in April and the lease was signed on July 20 between the lawyers of the department and Roux Property Fund. On July 26 the department confirmed that everything was above board. It reads: "This letter serves to confirm that the Department of Public Works has complied with all the internal processes..." But on August 10 he received another letter from the department's director-general Siviwe Dongwana stating the lease had been suspended pending an investigation. "The department now has reason to believe that not all the procurement processes were followed," says part of the letter.

Shabangu said the department could not reverse the process. "That could be a serious legal issue and a financial disaster on the department's side because they entered into a legal and binding agreement with the Roux Property Fund," he said.

Source: The Sowetan