Court hears of potential Mpekweni deal of R270m - 13 Sept '05

court hears of potential mpekweni deal of r270m

a potential investor in the mpekweni resort was prepared to put up to r270 million into the operation, the fraud case against former top eastern cape development corporation officials heard.

the interested parties were disqualified as they would not disclose details of the company directors and wanted a 120-day moratorium on the deal.

this was the evidence in the fraud trial of former ecdc finance director john cerff, its former director of property development don maclean and its former ceo mcebisi jonas - who have all pleaded not guilty to fraudulently misrepresenting details of the mpekweni resort deal concluded in april last year.

the investor, nello benade, was acting on behalf of a consortium that was looking for tourism opportunities in the eastern cape.

east london businessman bruce mclean said he had made calls to the ecdc on behalf of benade, with whom he had dealings in another property development near port alfred.

benade had asked mclean to contact him if he heard about any opportunities in the province.

mclean had heard that the mpekweni deal was not finalised and approached the ecdc for information.

he initially dealt with ecdc executive welani mlonzi and subsequently with maclean.

in his first two phone calls to maclean a second bidding process for the resort was mentioned.

maclean said there were a number of people interested in the mpekweni deal, wanting to buy the operation for nothing, and the facility was worth between r30m and r35m.

mclean had not mentioned this in his statement to police "as it was not relevant at the time as they were asking why a mandate had not been given".

he said benade was reluctant to name the directors as he felt that, as a broker, he might be jeopardised, as the ecdc would try to deal with them directly.

mclean said he had asked for a 120-day moratorium on the deal so a proper evaluation of the facility could be made for development purposes and, as this would be expensive, the group did not want to waste its money.

the group was also interested in the rest of the farm on which the mpekweni resort was situated.

it had approached the eastern cape's department of economic affairs to find out who they should deal with.

"the investors were good for r270m and were looking at putting up another hotel and additional conference and convention facilities, as well as a country estate development," mclean said.

the case continues today.