Report: Molefe scores millions on mansion, creating conflict of interest

Newly sworn-in African National Congress (ANC) MP Brian Molefe reportedly received a bonanza discount on a luxury “platinum” mansion in an upmarket Pretoria estate while he was still the CEO of Eskom.

News24 reported on Tuesday that Molefe bought the property in the Cornwall Hill Estate in January last year for R10 million from his friend and former Public Investment Corporation (PIC) colleague Tshepo Mahloele.

According to the news website, the R10 million sale is 41% less than the R17 million the property was originally advertised for.

The sprawling property includes its own cigar lounge and gym, and went to Molefe for about R4 million less than an offer made on the house by a prospective buyer, according to an estate agent with knowledge of the transaction.

Local estate agents were apparently shocked when they learnt that Mahloele had decided to sell the house for R10 million because similar properties were often sold at higher prices, between R15 million and R20 million.

Property records, seen by News24, show that Molefe acquired the house in January 2016 after securing an R8.1 million bond from Investec. This means he would have had to pay R1.9 million cash to Mahloele to cover the rest of the purchase price.

The transaction may probably result in a conflict of interest dilemma for Molefe, should President Jacob Zuma appoint him to National Treasury, as has been widely rumoured.

Mahloele is the CEO of Harith General Partners, a boutique fund manager started with state money by the PIC in 2007 to invest government pensions in infrastructure projects outside of the country. The PIC is the main shareholder in Harith.

Molefe as a former PIC chief executive is credited with establishing the boutique fund manager.

Mahloele defended the transaction, saying it was “bona fide” and “above board”, according to the report.

The minister of finance is government’s shareholder representative at the PIC, but over the years it has become conventional for the deputy minister of finance to chair the PIC board.

“As minister or deputy minister of finance, Molefe would be involved in PIC investment decisions, including transactions involving Harith. This means Molefe could be exposed to decisions that would benefit his property benefactor: Mahloele,” the report stated.

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