South Africa

Pay Back the Money Report

Barnabas Xulu resists state’s move on his house and Porsche to reclaim R20m

Attorney Barnabas Xulu, a friend of former president Jacob Zuma and lawyer to Western Cape Judge President, John Hlophe. (Photo: Gallo Images / Foto24 / Nelius Rademan)

Attorney Barnabas Xulu rushed to the Western Cape High Court on Friday in an attempt to have an order for the attachment of personal property, vehicles and his bank accounts set aside.

Attorney Barnabas Xulu, after ignoring an initial 5 October order, forced the Department of Agriculture, Forestry and Fisheries (DAFF) back to court where two further orders were issued as Xulu appeared to have gone AWOL.

On 15 October, Judge Chris Smith granted an order for the sheriff of the Lower Tugela district to give effect to a second 12 October order authorising “all necessary steps, including enlisting the services of a locksmith” to open buildings situated at Sheffield Estate in Ballito, KZN. The property is listed as belonging to Xulu.

This was needed to take a full inventory of the contents of the property. The court also ordered the tracking down of a Porsche 911 Carrera GTS in order for it to be attached.

Xulu and a company listed as Incovision (Pty) Ltd were restrained by the 15 October order from “alienating or transferring any shares or member’s interest” in the name of Xulu which would dissipate or reduce the value of assets.

Xulu was ordered in January 202o to repay DAFF R20-million in legal fees which the courts found he was not entitled to.

The first 5 October order by Smith instructed Xulu to pay the state attorney R3.4-million together with interest earned in an account that had operated from 2014 to 21 August 2019.

The high-profile lawyer and founder of the Jacob Zuma Foundation was ordered to make a further payment of R380,000 with interest from another account, and to provide DAFF’s attorneys with “a full copy of the relevant bank statements”.

After the sheriff came looking for his car and house, Xulu approached the Western Cape High Court on Friday 16 October to challenge the 15 October order, but the matter was referred back to Smith in the Eastern Cape division.

In September 2020, Xulu lost an application for a ruling made by Judge Owen Rogers in January this year for the R20-million to be repaid to be set aside. 

The judgment was upheld by Smith who was brought in from the Eastern Cape as the Western Cape High Court is fraught with division regarding deputy judge president John Hhophe, who is Xulu’s client.

By then Xulu had run out of runway concerning his challenge to the Rogers ruling, and the clock began to tick in terms of his paying back the money.

Judge Smith, hearing Xulu’s application in September to have Rogers’ decision set aside, remarked that the state attorney, acting on behalf of DAFF, had been unable to “extract an undertaking from Mr Xulu to the effect that the funds transferred to them would be retained in the BXI trust account pending the resolution of the dispute”.

As a result, DAFF had launched an urgent application on 5 August 2019 to effect this. Rogers heard the matter on 12 and 13 December 2019 and handed down judgment on 30 January 2020. 

Xulu’s lucrative run with DAFF, which he billed in US dollars, came to an end in August 2018 when DAFF director-general, Mike Mlengana, terminated the services of Barnabas Xulu Incorporated, with the exception of one case – the Arnold Bengis lobster trail in the US.

By March 2019, Xulu had insisted that DAFF owed his firm $2.5-million. National Treasury intervened and called a meeting.

At that meeting, DAFF verbally agreed to pay R20-million to BXI immediately, with the balance to be settled once the invoices had been validated. Xulu accepted these terms telephonically.

Mlengana, meanwhile, instructed a departmental functionary, one Ms Parker, to settle the account.

However, on 11 April 2019, DAFF’s chief director: financial management (who was not named in court papers) addressed a memorandum to Mlengana expressing the view that BXI’s appointment did not comply with applicable supply chain management procedures, and that the payment to them would accordingly constitute irregular expenditure.

Ndudane was sent the memorandum about the illegality of the appointment but, nonetheless, on the same day signed the settlement agreement on behalf of DAFF. Ndudane was not mandated or authorised to sign the settlement agreement.

That same day, BXI urgently approached the Western Cape High Court to have the agreement made an order of the court. It fell to Judge Patricia Goliath, Hlophe’s nemesis, to hear the matter.

Goliath was not budging and asked for more information from Treasury and the NPA, while refusing to sign the order. Xulu complained to Hlophe, Goliath recused herself and another judge, J Steyn, granted it on 6 June 2019.

The same day BXI wrote to Mlengana demanding R39-million

Mlengana became aware of that letter when he was at the airport about to depart on an overseas holiday.

He then telephoned Xulu and reminded him about his (and the department’s) undertaking to pay, and requested him not to proceed with the execution.

On 14 June 2019, after Mlengana had returned from holiday, Xulu again called to discuss the issue of payment. 

On 19 June 2019, some R2.5-million in DAFF’s Standard Bank account was attached. That sum, minus the sheriff’s charges, was transferred to the BXI trust account on 2 July 2019. 

A second writ was executed on 17 July 2019 and some R17,6-million was attached in DAFF’s Standard Bank account and paid to BXI by the sheriff on 1 August 2019. Most of these funds were transferred from BXI’s trust account, and by 6 August 2019 only the sum of R121,000 remained in the firm’s business account.

A third writ was issued on 13 July 2019, and on 17 July 2019, a sum of R11.4-million was attached in a different DAFF account. Those funds had, however, not been transferred to the BXI trust account.

When the state attorney, acting on behalf of DAFF, was unable to extract an undertaking from Xulu to the effect that the funds transferred to them would be retained in the BXI trust account pending the resolution of the dispute, DAFF launched the urgent application on 5 August 2019. 

The application was heard by judge Rogers, who ordered Xulu to repay the R20-million.

DAFF, Minister Barbara Creecy and Xulu have been in and out of court ever since in an attempt to have the funds repaid to the state.

Judge Smith, in the week of 5 October, handed down the order for the freezing of Xulu’s trust account. Xulu challenged this and the matter has now been sent back to Smith in the Eastern Cape. DM

 

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