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Liquidators go after ANC and Regiments Capital owners to recover R50m ‘disguised donation’

Liquidators go after ANC and Regiments Capital owners to recover R50m ‘disguised donation’
Kgoro Gateway, Sandton Central. (Image: Supplied) | ANC supporter with a flag. (Photo: Gallo Images / Darren Stewart) | Former ANC secretary-general Zweli Mkhize. (Photo: Darren Stewart / Gallo Images) | Regiments Capital owner Niven Pillay. (Photo: Gallo Images / Daily Maverick / Felix Dlangamandla) | Regiments Capital owner Litha Nyhonhya. (Photo: Gallo Images / Daily Maverick / Felix Dlangamandla)

A payment at a time when the company was effectively broke has come back to haunt the Regiments Capital owners, Litha Nyhonyha and Niven Pillay, and along with them the governing party who are now jointly being sued for repayment of the money.

Liquidators of the embattled Regiments Capital have taken the African National Congress to court in a bid to recover R50-million that the company channelled to the party in 2016.

The ANC is being sued alongside Regiments’ owners, Niven Pillay and Litha Nyhonyha, for what liquidators have labelled a disposition under insolvency law.

The money was paid into an attorney’s trust account, allegedly to “hide” the donation.

Attorney Naheem Raheman, at the ANC’s instruction, used the money to settle outstanding debts incurred by the party during its 2016 election campaign.

Those payments included R1.3-million directly to the ANC for “human resources” and R8-million allocated with beneficiary details noted as “ANC TG Fund”.

TG is a common reference to treasurer-general, a position then occupied by Zweli Mkhize.

Liquidators, in an affidavit filed at the Gauteng Division of the High Court in Pretoria in November 2023, charge that the overall payment by Regiments and a move to record it as a share-sale agreement were done recklessly and with the intent to defraud the company’s creditors.

They want this agreement to be set aside and for the parties to pay back the money, with interest.

The sale of the shares involved prime land near Sandton’s Gautrain station that the Regiments-led consortium acquired from the City of Joburg more than a decade ago. Read amaBhungane’s exposé of the deal here.

Details of the lawsuit come as election fever takes off and mere weeks after the ANC averted the threat of liquidation by entering into an out-of-court settlement with Ezulweni Investments over a R100-million debt relating to a different election campaign, that of 2019.

Read more in Daily Maverick: ANC in trouble as high court sheriff attempts asset seizure over R102-million election banner debt

Regiments Capital was liquidated in September 2020, but related litigation continued until the Constitutional Court brought finality to the case in August 2023. 

The donation to the ANC was allegedly done at a time when Regiments’ liabilities of nearly R2-billion exceeded its assets.

Daily Maverick revealed details of the payment last year when the joint liquidators, Jaco Venter and Kagiso Dinaka, subpoenaed Raheman — the KwaZulu Natal-based attorney whose trust account was used to move money to the party — to appear at an insolvency inquiry.

Read more in Daily Maverick: You ANC nothing yet: ​Liquidators subpoena lawyer over R50m donation from Regiments Capital to party’s 2016 election campaign

Raheman at first tried to block the subpoena on the grounds that an appearance to produce anything beyond initial disclosures to liquidators would place him in breach of attorney/client privilege, but later abandoned the application.

At the time, he told Venter and Dinaka that the cash — at the instruction of the ANC — was used to pay ANC creditors who were owed money for work on the party’s 2016 election campaign.

And, while the ANC had permitted him to release this information, the rest, Raheman argued, would have to be obtained from Regiments.

It is unclear whether he eventually appeared at the confidential hearing and attorneys for the liquidators, Tintingers Inc, declined to comment.

But liquidators have now issued summons for repayment and are holding the ANC liable along with Nyhonyha and Pillay as well as the Education Policy and Research Trust.

This good-causes trust of which Pillay and Nyhonyha were the trustees, was a member of what was known as the Kgoro Consortium.

Regiments was the major shareholder of the politically connected consortium, which in turn owned 100% of Cedar Park Properties 39, the company that owned the valuable Sandton property. 

‘Fraud’

Nyhonyha and Pillay have claimed that shares in the consortium were allocated for the benefit of the trust and that the R50-million was an advance payment for Regiments acquiring that allocation.

But liquidators are not buying this and have deemed it fraud, partly due to some missing paperwork to back up a “recordal agreement” setting out the specifics.

They say Regiments did not pay the money to the trust, which was seemingly entitled to the allocation of shares, and instead moved the money to the ANC’s lawyer who then disbursed it for the party’s benefit.

They view the donation as a disposition, one made to the prejudice of creditors.

While the company held R747-million in assets at the time and/or immediately thereafter, it had liabilities of just over R1.9-billion that included additional tax liabilities of R679-million to SARS, VAT of R124-million, R580-million for the Transnet Second Defined Benefit Fund (TSDBF) and another R245-million to Transnet.

Read more in Daily Maverick: Exclusive: Regiments Capital puts up R500m in Capitec shares in lieu of ‘State Capture’ claims

Regiments’ owners settled the TSDBF debt through a sale of Capitec shares in 2019.

Nyhonyha has filed an intention to oppose the application and Daily Maverick has not had sight of such a notice in respect of Pillay or the ANC. 

The payment to the ANC took place in June 2016, a time of heightened awareness of State Capture. 

The Public Protector’s investigation into the fraud and corruption in the public sector and the role of former president Jacob Zuma and the Gupta family was in full swing. (This investigation ultimately led to the establishment of the State Capture inquiry chaired by Judge Raymond Zondo.)

In the same year, Regiments Capital, once regarded as a beacon of black success in the financial sector, became embroiled in the scandal when it emerged that the company had paid kickbacks to Gupta-linked front companies such as Homix in exchange for deals at state-owned companies.

Nyhonyha and Pillay have since been caught up in a punishing flood of litigation and are among a group facing criminal charges relating to an advisory contract linked to Transnet’s acquisition of 1,064 locomotives. They have yet to plead to charges.

Daily Maverick couldn’t immediately get comment from the ANC but the story will be updated should the party respond. DM

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Comments - Please in order to comment.

  • Richard Blake says:

    The chickens have come back to roost.

    • Ben Harper says:

      Unfortunately, uncovering their ongoing and constant criminal activity is one thing, actually prosecuting them is something that is as elusive as a 3 Rand Coin

    • Theart Korsten says:

      This is the Nth time and yet no one is in prison nor are they held accountable. They get promoted when this happens. SARS chases the small guys and harasses them but tje big guys just sail away. Lekker man. So so lekker!

  • Richard Bryant says:

    If I understand the situation, Regiments debt to the TSDBF was repaid. Which means the R60m paid to the ANC was money owed mostly to SARS in taxes and VAT.

    Like we are all expected to pay our taxes, with SARS doing verifications and audits on pensioners and salary earners while the ANC is happy to simply take money owed to SARS. And the Minister of Finance, who is a member of the ANC and NEC and the cabinet just looks the other way.

  • Kevin Venter says:

    So much corruption in the South African government! Even if the government by some miracle had to change. It won’t change because as the support for the ANC dwindles, they will then start messing with the ballot, following suite of Zimbabwe. But let’s entertain the idea for a second that our government does change. Then, if we get a party that is better at the administrative side of actually governing, how long will it take to stop the corruption which has bled over into pretty much all of the private sector that does any business with the government? How long will it take to fix the mess that is left behind by the lack of maintenance on basic infrastructure. The list is endless. Even with a switch to a better governing party (which won’t happen), it will take decades to undo the damage. People in South Africa live in hope but they don’t do anything about it. Where are the same mass protests that toppled the Apartheid regime? Seems to me that the mass action was merely so that a white person would not be in power rather than for an improvement of live. No, if the motivation was for improved conditions, South Africa would long ago have had the same widespread mass action because of the ANC’s inability to govern itself let along the country.

    • Theart Korsten says:

      Another 30 years. And to be honest most government ln this earth are corrupt. They are just better ad managing and hiding it and they don’t steal 80% of the money like the guyse here they only steal 10%

    • Greeff Kotzé says:

      A glimmer of hope might be: if a capable governing party/coalition force tender processes to become more transparent and streamlined, the awarding of tenders to be adjudicated fairly, and contractual payments are made on time when they are due, then honest businesses that have long since stopped tendering for government contracts might once again do so.

      And if those honest companies then submit tenders at fair value, instead of bloated ones stuffed with hidden costs, they would be very likely to land those contracts. Which would then immediately start diluting the number of contracts in total that are held by corrupt businesses. This then strengthens the capacity and resources of the state, so that it can pursue corrupt remnants in the system. Rinse and repeat.

    • Calvin Botha says:

      We will all be long dead by the time it turns around I’m afraid Kevin, but that isn’t a reason not to start. Change happens only when the pain of staying the same is greater, and the people of South Africa have a massive capacity for pain. So whether they’ll ever strive for improved conditions, who knows, our culture would need to change first and that takes many many generations.

  • Krynauw Nel says:

    Ag nee sies man

  • Charles Butcher says:

    Break them if possible best action YET against corrupt governmunt. If pavemunts were repaired then managemunt in the governmunt may function to prevent this corruption and thievery

  • Steve Davidson says:

    Two quotes that might help those of us who detest these useless, crooked, corrupt and incompetent ANC and Indian thieves who have ruined this country (all but the amazing Western Cape which is run by an outstanding group of honest and hardworking souls):

    “The wheels of justice grind slowly” (but at least they grind)

    “Revenge is a dish best served cold” (and may these swine rot in hell for what they’ve done)

  • Miles Japhet says:

    Tax man should be all over this like a rash. Guilty until proved innocent – Ask Al Capone!!

  • Tony Reilly says:

    Very encouraging development ! The scale of the fraud is astonishing. Cyril will no doubt be “ shocked”.

  • Fanie Rajesh Ngabiso says:

    Like the scorpion, cleaning house and becoming an honest party necessitates the ANC fatally stinging itself.

    The question is – does this scorpion control its own tail.

  • Just Me says:

    It is known that the decision on the awarding of the Sandon land (Kgoro Site) was made in Luthuli House as a political decision, in contravention of the Municipal Finance Management Act 56 of 2003. The then CEO of the Joburg Property Company (JPC), a Ms Gugulethu, was instructed by the ANC to produce money off the sale of or awarding of Joburg’s crown jewel properties.

    Therefore the JPC is implicated in this R50m payment made by Regiments to the ANC, as it was this ‘inducement’ (in contravention of the MFMA), which is why the JPC awarded the land to Regiments Capital (see article in the press regarding this auction – Finally for sale: Large Gupta-linked Sandton plot near Gautrain station).

    It remains irregular that this land, still owned by the public, is not put back on public tender, but allowed to be used by the liquidators of the embattled Regiments Capital.

  • Mkulu Zulu says:

    Heh heh heh Viva Amaliquidators!

  • Alley Cat says:

    “In the same year, Regiments Capital, once regarded as a beacon of black success in the financial sector”. Success?? Why is this scenario so common?

  • Vincent Britz says:

    You can be 100% guaranteed that where ever you hear the ANC name…. Corruption will follow!!! That’s all the ANC stands for “Corruption” & will always be remembered as the party that destroyed a beautiful country.

  • Gavin Ford says:

    Is there no end to the trail of corruption, illegal dealings, illicit transactions and completely immoral behaviour of senior officials that are linked to this government? Nelson Mandela gave this party his life in order for it to achieve control of the most technologically advanced, successful and sophisticated country on this continent. He would be appalled at the state of affairs in the country now.

  • Middle aged Mike says:

    Time for another quick call to the Iranian Dept of Glorious Foreign Liberation Movement Finance eh Cde. Gwen Ramokgopa?

  • Retief Ueckermann says:

    One thing is for sure, the truth will always prevail, even if it takes time.

  • Dee Bee says:

    Slowly but surely, let’s hope they don’t get off the hook!

  • Rae Earl says:

    Up to the ANC’s usual high standards of fraud, theft, and dishonesty. Nothing they do or say is believed by the population at large anymore. Ramaphosa will deliver his usual mindless pre-election speeches vilifying agencies which expose the corrupt inner workings of the ANC from the NEC down. He and his wrecking crew will never allow journalists to interview them. Probably because they know they’ll be crucified trying to answer tough questions.

  • Geoff Coles says:

    Oh dear, yet again, and again! Should the ANC be funded by Iran, as is quite possible, then another squeeze by them both…… think is, what else is out there?

  • Brian Doyle says:

    The chickens have come home to roost

  • Confucious Says says:

    Can’t run a party, a country and probably not even a bath!

  • Mark O’Malley says:

    Same modus operandi to hide the money which Iran and Hamas have “ donated “ to the ANC for running to the ICJ on its behalf .

  • Theart Korsten says:

    When do ” we think the people will awaken to the ANC’s corrupt ways? Another 30 years?
    I mean, it never stops!!!
    They are eating cake, celebrating the ANC’s 112th birthday, spending money left right and centre.
    And yet, seem to believe they have done well. It is an embarrassment to ALL South Africans and yet they survive every election.
    People only change their ways when they are forced to.
    We need to get them out of government now and clean house. We need to get our own house in order here.
    They have forgotten who they work for. We the People!

  • dmpotulo says:

    I agree that it will take many years to clean out the mess that has been caused by cANCer government. But they must lose this coming election dark or blue. Yes, it appears that the fight against the apartheid government was not against the wrongs of that government, but merely to replace whites, and perpetuate malfeasance on an industrial scale.

  • JAJ Stewart says:

    Let the dogs eat each other.

  • Annie Conway says:

    As soon as the anc responds …. Ja, pardon me while I don’t hold my breath

  • Jurie Welman says:

    I am not a legal expert but when I was responsible for businesses across the world, the organization’s responsibility to comply with the laws of the country was my responsibility in my personal capacity. I had to submit a signed statement every year to the effect that all legal requirements were met, and no laws were breached. Therefore, if these transactions which are clearly fraudulent, are true, why would the ANC office bearers who oversaw these transactions, not be prosecuted?

  • Marco Johannes says:

    Its no wonder we see a max exidous by many talented ceo, the damage is irrecoverable – impossible to fix this level state capture and failure. Personally i dont mind paying tax to a system that works. Not here to support this state filled with corruption moral decay.

  • Sunil SHAH says:

    [20/01, 12:20] Justin susan: All that optimism. We had in the 90s and early 2000s…..gone. And they’re moving us closer to Iran Russia and China. I fear for future elections now. How will this lot ever give up power.
    [20/01, 12:26] Sunil Shah: If ANC maintain a majority, then the electorate deserve what they get. Im convinced Nelson Mandela would not vote for today’s ANC… But the black South Africans – even younger educated ones – have an ANC loyalty that can only be described as racist. Strong word yes, but there is no other explanation, certainly not a meritocratic or ideological one, to explain the ANC’s support today.

  • Sunil SHAH says:

    If ANC maintain a majority, then the electorate deserve what they get. I’m convinced Nelson Mandela would not vote for today’s ANC…

    But the black South Africans – even younger educated ones – have an ANC loyalty that can only be described as racist. Strong word yes, but there is no other explanation, certainly not a meritocratic or ideological one, to explain the ANC’s support today.

  • Sunil SHAH says:

    Justin, from my limited sampling of Africans I know (limited granted) the 30yr olds and under are disgusted with the ANC, and will vote EFF or DA…but the older crowd, say +40yrs, even professional artisans like mechanics or electricians dont attribute the appalling state of the country to the ANC as a party, but bad actors within…they hope for younger blood to replace the old guard. HOWEVER, THAT WILL NOT HAPPEN. The ANC as a political party lacks any mechanism for meritocracy to rise. And this is why the ANC have to go.

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