City’s ‘sweetheart land deal’ to Gupta-linked company irreversible – Mashaba

City’s ‘sweetheart land deal’ to Gupta-linked company irreversible – Mashaba

Former City of Johannesburg Mayor Herman Mashaba during an interview related to service delivery on May 03, 2018 in Johannesburg, South Africa. Picture: Gallo Images

In the deal, the city transferred ownership of land to Cedar Park Properties in 2013 and has not received a cent for it.

Joburg city mayor Herman Mashaba has announced that the city has failed in its bid to reverse the sale of the land on which the Sandton Gautrain Station is situated.

The city reportedly transferred ownership of the land to Cedar park Properties 39 Pty Ltd in 2013 and has never received a cent of the R280 million purchase price. Mashaba said the ownership transfer of the property could only be described as a “sweetheart deal”, as the land was among the city’s most valuable pieces of land in the city’s portfolio.

The prime land, purchased for R280 million, had a clause which stipulated that payment was only payable once development of the land was complete, however, development never got off the ground and the city had not received a cent.

To date, Cedar park, which is heavily associated with Regiments capital, a Gupta-linked company, continues to collect rent from the street-level shops.

Mashaba said in a statement Regiments Capital was heavily associated with Cedar Park as its current chairperson signed the sale agreement on behalf of Cedar Park in 2009.

“Cedar Park was set up as a special purpose vehicle to acquire the land on which the Sandton Gautrain Station is situated.

“The sale transaction to a Gupta-linked company, that had no track record in property development, is currently subject to a full forensic investigation.

“While the city’s forensic investigation is ongoing, Cedar Park’s shareholders filed papers to put Cedar Park under business rescue.

The city reportedly plans to oppose the rescue application and believe Cedar Park is not worth rescuing. If opposing the application is unsuccessful, the city will support the liquidation application to ensure the land is sold to an experienced property developer who will develop the land with the initial sale, lease, and development agreement.

“Fortunately, a notarial deed of servitude was registered over the land, which means whoever purchases the land is legally required to develop the land in line with the sale, lease, and development agreement that the city entered with Cedar Park in 2009,” Mashaba said.

This follows Mashaba’s confrontation with the Gupta-linked firm, which resulted in him cutting water supply to the train station in September.

Earlier this month, Gauteng MEC for public transport and roads infrastructure Jacob Mamabolo announced that water would be reconnected at the Gautrain Sandton station on Thursday, October 3, after the water supply was cut off for three weeks.

Mashaba ordered the city to cut the water supply to the station on September 6, until R8 million in outstanding debt had been paid.

Bombela Concession Company had claimed unfair treatment after paying its water accounts in full and took the matter to the High Court in Johannesburg. The city and Bombela have reached a settlement agreement whereby the city agreed to install a separate water supply meter directly to Sandton station.

(Compiled by Gopolang Moloko)

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