Johannesburg – It’s official. Former Gauteng health MEC Brian Hlongwa’s R7.2 million house at 163 Eccleston Crescent in Bryanston was paid for in cash by officials from Baoki Consortium.
The company got multibillion-rand tenders from the Health Department while Hlongwa was MEC.
In 2009, former Gauteng premier Nomvula Mokonyane did not return Hlongwa to the portfolio after the allegations came to the fore.
Hlongwa has since become the ANC chief whip in the Gauteng legislature.
He recently opposed a National Prosecuting Authority (NPA) civil court application for the high court in Joburg to direct that the house be forfeited to the State because it was bought from the proceeds of fraud.
On Monday, the DA in Gauteng made a fresh bid to Premier David Makhura and the ANC to fire Hlongwa for allegedly accepting the R7.2m “bribe”.
During proceedings, which came to a climax late last year, Deputy Director of Public Prosecutions Motlalekhotso Knorx Molelle argued that Baoki and 3P Consulting officials had bought the house for cash.
Molelle said this took place after Hlongwa secured lucrative tenders for them.
Baoki did not oppose the NPA’s application.
Gerrit Henning, a Baoki director, said in a replying affidavit: “Baoki, Amethyst and Equiton (which form part of the consortium) were shocked to learn of the property allegations.
“Given these allegations, and as a matter of good corporate governance, it was decided not to oppose the application. This should in no way be interpreted as a concession that any other of the allegations are admitted,” he said.
The NPA has singled out Heinz Smidek as chief executive of AME Africa and director of Amethyst Limited, and Niven Pillay of Ergold Property – both part of Baoki – and Richard Payne of 3P Consulting as those who paid for the house.
The court has served a forfeiture order only against Baoki.
In contrast to Baoki, Hlongwa and Payne filed papers to oppose.
Hlongwa said in his affidavit his house was acquired from “lawfully obtained” funds.
He said: “No basis has been made out to establish a finding that the property constituted the instrumentality of an offence referred to in schedule 1 of the Prevention of Organised Crime Act No 21 of 1998.”
In terms of the ruling awarded in favour of the NPA, Baoki relinquishes its R1.2 billion claim against the Health Department for breach of contract.
The court accepted the argument made out that Pillay had initially paid R1m into the account of an entity owned by Hlongwa.
That amount, the court ruled, was used to pay for the initial deposit on the Eccleston Crescent property.
The purchase price was R7.2m.
It also accepted Molelle’s argument that “Hlongwa intended to pay the balance of the purchase price of the Eccleston property from the proceeds of the sale of a house situated at 26A College Drive, Bryanston, held in the name of Gold Pond.”
He was unable to sell it within the time periods provided for in the purchase agreement for the Eccleston property, Molelle said.
He added that due to the delay in providing guarantees for the balance, the seller of the Bryanston property, Jabulani Madlala, needed a further deposit of R2.6m.
The court heard that in February 2008, Payne paid R1.6m and Pillay a further R1m.
“On February 26, 2008, Kemsing Services (incorporated in Cyprus and owned by Smidek) bought the College Drive house for R4.6m for the use of Baoki or AME Africa.
“Smidek facilitated the sale, and also the establishment of Kemsing Services in whose name the title (deed) of the College Drive house was registered,” Molelle said.
He submitted that after the acquisition of the R7.2m house, Payne and Pillay then began to refurbish the Eccleston Drive house through their companies.
During the renovations, Hlongwa remained in the College Drive house he was selling without paying the required rent of R40 000 a month.
Molelle further said Smidek on May 8, 2009 transferred an amount of more than R1.5m into Hlongwa’s personal account, ostensibly for furniture purchased.
The DA’s Jack Bloom said: “While Hlongwa is innocent until proved guilty, and due process must be followed in this matter, there is a huge corruption cloud that hangs over his head that undermines Premier David Makhura’s pledge to run his administration with integrity and free of corruption.”
Gauteng ANC head of communications Nkenke Kekana said the Hlongwa matter was still before the ANC’s integrity committee.
“The Gauteng ANC cannot do anything until the integrity committee has concluded its report,” he added.
