Record label boss Arthur Mafokate had less than R17 000 in his organisation’s bank account before receiving a windfall to purchase his multimillion-rand lodge, La Villa Rosa, in Midrand.
On Tuesday, the high court rejected the music legend’s request to lift a preservation order that the Special Investigating Unit (SIU) had obtained.
Lottery funds
The SIU was granted the order in December 2022 while investigating the possibility that Arthur Mafokate bought the posh guest house in Midrand through money that he got from the National Lottery Commission (NLC).
A judgment handed down at the High Court Gauteng division ordered Mafokate to pay the SIU’s legal parties and the costs of the application.
In the 15-page judgment earlier on Tuesday, the court states that it had problems figuring out how Mafokate could afford to pay for his luxury lodge without the help of the funds from the NLC.
Mafokate received funding to the tune of R9 300 000 from the NLC through his non-profit organisation SAADA. The organisation was meant to fund programmes for the needy.
According to the judgment, Mafokate received the money in two tranches: R4 650 000, which was deposited in 2014, and R4 650 000, which was paid into SAADA’s account in 2015.
The court stated that Mafokate started the process of purchasing his new property shortly after the second payment was made.
“After the receipt of the second tranche, SAADA made five transfers totaling R4 517 421 to Roadshow Marketing CC (Roadshow Marketing).”
Sole company director
“The sole member of Roadshow Marketing is Mr Arthur Mafokate, who is also the director of SAADA. It is noteworthy that prior to receiving the first transfer, the balance of Roadshow Marketing was R226 522,29. The money then moved from Roadshow Marketing and was transferred to a Nedbank Home Loan account in four transfers totaling R4.4-million.”
A year later, the money was moved from the Nedbank Home Loan Account and transferred to Mafokate’s record label, 999 Music. In 2016, 999 Music transferred R6 750 000 to a law firm for the purchase of the lodge.
In court, Mafokate’s lawyers submitted that he purchased the lodge with his profit after he successfully concluded the project.
Mafokate’s argument rejected
However, this was rejected, as he was contractually obliged to return the money to NLC if it was not used for the project. He also stated that some of the money was sent to Roadshow Marketing as they invoiced SAADA for working on the project.
This too was dismissed as SAADA was funded with a clause that it would be the one doing the work at no profit.
“The gist of counsel’s submission was that SAADA, an NPO, transferred over R7,1 million, which ended up purchasing a house for Mr Mafokate, which was against the grant agreement, and there was just over R1,8-million left and enough to cover all costs of the project,” the judgement read.
Muso’s ability to afford the property questioned
The court said that after thorough interrogation of a report of SAADA’s work, it was realised that only R1,8-million was used for work relating to SAADA. It also questioned Arthur Mafokate’s ability to buy the property, stating that his argument that the money was from savings was questionable.
The judgment concluded: “When all is said and done, the vexed question facing this court is: if I were confronted with facts submitted by both the respondents and the applicant, would I have given the preservation order, as the court did in the ex parte application? Mindful of the standard of proof required to grant this order, my answer is yes.
“The respondent has not dealt with the money flow or given a simple explanation about where it procured the money to purchase the property in question.”
