The removal of minister of land and agriculture, Lulu Xingwana, as political head of the ailing Land Bank provides a good opportunity for minister of finance, Trevor Manuel, to embark on a thorough clean-out of the corruption that has become synonymous with that institution.
The Land Bank is undoubtedly one of the most mismanaged public entities. It is corrupt to the core. Under Xingwana and her predecessor, Thoko Didiza, the Land Bank became a private kitty for politically connected fat cats.
The government’s initial mandate for the bank — which, under apartheid, was Afrikaner agriculture’s private lender — was a noble one .
The bank was supposed to deracialise the country’s agricultural sector through, among other things, the targeted financing of emerging farmers, and helping historically disadvantaged South Africans enter the food-production sector.
The mandate also required the bank to “ ensure that resource-poor farmers would become active participants in mainstream commercial agriculture ... while continuing to service commercial farmers”.
Implicit in this was the role of the bank in ensuring South Africa’s food security, something even more imperative now, in the context of the international food crisis.
The government mandated that the bank’s money be used for agricultural purposes. It remains a mystery why bank bosses deemed it fit to deviate from that .
What the country’s struggling farmers witnessed instead was the opposite of what the bank was mandated to achieve.
Poor farmers were left stranded while hundreds of millions of rands were dished out to the elite few to invest in golf resorts and other property developments.
In an act reminiscent of a banana republic , one of the recipients allegedly used a large chunk of this generosity to finance the purchase of a soccer team.
More worrying is that those responsible for looting and pillaging the bank have not been brought to account.
Among them are those bank officials who used more than R2-billion of the bank’s allocations to fund their close friends and business associates.
The audit revealed that:
- Former Land Bank CEO Alan Mukoki and his executives had deviated from the Land Bank’s mandate without the board approval of Didiza and funded companies that had nothing to do with agriculture;
- Three different law firms had advised the Land Bank against using tax payers’ money to fund golf estates.
- More than R300-million was given to a company called Amber Mountain Investments to develop an upmarket equestrian estate in the KwaZulu-Natal north coast. Another multimillion-rand golf estate was developed in Midrand using money from the Land Bank. Amber Mountain features prominent businessman Abe Maduna and Paul Baloyi, the CEO of the Development Bank of South Africa (DBSA), as directors .
- Mukoki’s Executive Assistant and then Acting Head of Internal Audit Daryl Rose also had financial interest in the companies that benefited from the loans. This includes a company called Northern Jungle Trading, which was granted a R247-million loan by the Land Bank to develop a golf estate in the Vaal area.
- Sam Mkhabela, a Land Bank board member who has since resigned, also benefited from the Northern Jungle loan.
- A Land Bank loan was also used to help KwaZulu Natal sugar tycoon Patrick Sokhela to buy PSL status for his team, Amazulu, after he had failed to raise the money on the open market. Sokhela also received a R700-million loan to buy a sugar mill, a loan whose size over-exposed the bank
We trust that Manuel’s team will leave no stone unturned in its quest to clean up the bank.
The negligence or complicity of Didiza and Xingwana in the mismanagement must be established.
What is clear is crimes were committed.
The South African public will expect criminal investigations to follow.
Source Muck out the Land Bank sty
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