Akani Properties (Pty) Ltd (“Akani Properties“), Akani Retirement Funds Administrators (Pty) Ltd (“Akani RFA“), and its Chairperson, Mr Zamani Letjane (“Mr Letjane“), have been the targets of misinformation and demonstrably false allegations made in a recent article published on 8 August 2024 by News24 on News24.com and its affiliated social media and news outlets.
The article, titled “Money for jam: How workers’ fund manager scored R300m by selling property … to the workers“, purports to shed light on Akani Properties, Akani RFA and Mr Letjane’s involvement in the sale of a Kempton Park hotel and property to the Municipal Employees’ Pension Fund (“the MEPF“) in 2018, for an allegedly inflated price of R 333 million. However, the article makes far-reaching baseless allegations concerning the history of the property, the sale transaction and the registration of the property, among a host of other false accusations and defamatory statements.
At front and centre of the hit-piece is the overarching allegation that Akani Properties, Akani RFA and Mr Letjane have abused their respective relationships with the MEPF, for personal and commercial financial gain through the sale of property. Nothing could be further from the truth.
This press release has been prepared to set the record straight and present the true facts in relation to the issues raised and plethora of false allegations made in the article. We deal with each of the allegations in sequence.
History of the property
Allegation: the property was initially purchased by Mr Letjane in 2010 for R1.1 million
It is incorrect that Mr Letjane bought the property in 2010. The property includes a number of properties, which were purchased by Mr Letjane in the 1990s and were subsequently consolidated. At the time, Mr Letjane used one of the properties as his personal residence and developed the Destiny Exclusive Hotel on another.
In fact, by 2010 (the alleged date of purchase), the Destiny Exclusive Hotel on the property was already fully developed and operational. During the 2010 World Cup in South Africa, the Destiny Exclusive Hotel provided accommodation to tourists visiting South Africa for the World Cup.
Allegation: the property comprises 1.5 hectares
The property does not comprise 1.5 hectares. The property, which is a consolidation of various adjacent properties initially purchased separately, comprises significantly more than 1.5 hectares of land.
Allegation: between 2010 and 2018, Mr Letjane sold and re-sold the property to himself and Akani to extract financial benefit for himself
As mentioned, the property initially comprised several adjacent properties by Mr Letjane and Akani Properties. The sales of property referred to between 2015 and 2018 formed part of an effort to consolidate the properties and to provide for its consolidated holding through Akani Properties. There is nothing unusual or sinister about this. The suggestion that Mr Letjane was buying and selling properties to himself in order to financially benefit himself is baseless and appears to be borne out of a failure to appreciate that the property was not one single property.
Sale of the property to the MEPF
Allegation: in 2018, the MEPF paid R333 million to buy “the 1.5 hectare piece of land“
The article attempts to portray the property as small piece of non-commercial land at the time of its sale to the MEPF in 2018. This is incorrect and misleading.
When the property was sold to the MEPF in 2018, the land comprising the property was already extensively developed with buildings and infrastructure, including the Destiny Hotel and the International Convention Centre (“ICC“). Both were operating at the time. The property was thus significantly enhanced and commercialised in 2018, when it was sold to the MEPF.
In 2016, Akani Properties embarked on a project further to expand and improve the Hotel and ICC. For this purpose, it had appointed various contractors in 2016 and 2017
In 2018, various presentations concerning the property were made to the MEPF Board, including a feasibility study and an independent valuation of the property was procured, which demonstrated that the value at approximately R 555 million excluding VAT.
In September 2018, the MEPF Board resolved to make an investment to purchase a 60% undivided share in the property for R 333 million excluding VAT, and pursuant to that decision sale agreement was concluded. That agreement has been amended and restated on several occasions. By way of amendments, a further 20% of the property was acquired by the MEPF, again on the basis of an independent valuation.
When the MEPF Board was considering presentations on the property delivered by external consultants, and considering whether to resolve to acquire the property, representatives of Akani RFA and Akani Properties (including Mr Letjane) were not involved in such meetings and in fact were not present.
Allegation: the IDC cancelled a prior funding facility agreement to finance the property in the amount of R234 million, which necessitated funding from the MEPF
As already mentioned, in 2016, Akani Properties embarked on a further expansion of the property, and by early 2018, the Industrial Development Corporation (“IDC“) had shown an interest to provide funding for the expansion project. This was also around the time when MEPF’s Board had shown an interest in making an investment in Akani Properties’ portfolio of assets; but this was not taken further until later in 2018, as stated above.
The IDC, however, never advanced any funds to Akani Properties and, by May 2018, it became clear that the IDC could not be relied upon to make the advance. The IDC then proceeded to register a bond against the property, even though it never advanced any funds to Akani Properties and acknowledged that it had not done so. The IDC subsequently refused to cancel the bond, which culminated in lengthy liaison and several issues with the registration of the property, as set out below.
Allegation: a similar funding deal with a Chinese lender also fell through
There was no such potential deal or transaction. This is false.
Allegation: Akani was in a financial bind as it did not have the funds to the develop the hotel
There is no truth in this allegation. Akani Properties has never had financial difficulties and was not in any financial bind.
Allegation: the property was held by Akani Properties on a different title deed to that of its registration in 2016
The difference in the title deed stems from the fact that at some stage there was more than one property with separate Erven registered. These adjacent properties were then consolidated into one and allocated a new erf number (Erf 155).
Registration and ownership of the property
Allegation: despite the sale to the MEPF, Akani Properties remains the owner of the property and not the MEPF
This is plainly false. The MEPF owns 80% of the property, including the Hotel and ICC.
The actual transfer of the property into the MEPF’s name was delayed because the IDC unlawfully refused to cancel the bond it passed over the property in 2018, prior to the MEPF’s investment. The IDC only furnished its consent for the cancellation of the bond in 2024, and the process of registering 80% of the property in the name of the MEPF was subsequently finalised in July 2024.
Allegation: the property does not appear on the list of the MEPF’s property holdings in the latest audited financial statements for the year ended February 2023 and the hotel does not appear as an MEPF asset in the previous year’s financial statement
It is incorrect that the property is not listed in the MEPF’s audited financial statements, simply because it is not on the list of property holdings. It was not listed because of the issues with the registration of the property in its name. The MEPF has at all material times, however, held the right to the full economic benefit of its ownership stake in the property.
The failure to transfer the property formally has no material bearing on the MEPF or its financial position. The benefits of the investment have, in any event, begun to flow to the MEPF since the completion of the expansion project and the opening of the hotel and ICC doors in October 2020. The hotel is managed by Radisson and has positioned itself as a premier destination for business travellers in the vicinity of OR Tambo International Airport.
Reportable irregularity
Allegation: SNG Grant Thornton (“SNG“), the MEPF’s auditors in 2019, alerted the Independent Regulatory Board for Auditors (“IRBA“) to a reportable irregularity regarding the sale transaction and the title deed of the property not reflecting the MEPF as owner
In March 2020, SNG did inform IRBA of an alleged reportable irregularity regarding a discrepancy in respect of the title deed of the property. As mentioned above, the lack of reference to the MEPF’s ownership on the title deed was as a result of the registration issues arising out of IDC’s registration of, and failure to cancel, a bond over the property.
The article fails to mention, however, that in June 2020, SNG informed the IRBA that the reportable irregularity was no longer taking place. This came after the MEPF and Akani Properties provided SNG with all the relevant information and agreements underlying the sale.
Alleged malfeasance on the part of Akani Properties, Akani RFA and Mr Letjane
The article also contains several disturbing and sweeping allegations against the integrity of Akani Properties, Akani RFA and Mr Letjane, and their relationship with the MEPF. There is no truth to these allegations. Such statements are plainly defamatory, whether in relation to the transaction and sale of the property, in light of the above facts, or otherwise (and the article provides no shred of evidence to support such allegations).
Other allegations
Allegation: the opening ceremony in October 2020 was attended by then-Gauteng premier David Makhura and Ekurhuleni mayor Mzwandile Masina, and President Cyril Ramaphosa
This is incorrect. Premier David Makhura did not attend the ceremony.
Allegation: in March 2023, the hotel was renamed Radisson Hotel and Convention Centre Johannesburg OR Tambo
This is incorrect. The hotel was named in 2019 and when it was opened in late 2020, it was opened as the Radisson Hotel OR Tambo.
Allegation: Akani’s lawyers threatened News24 with legal action
This is false.
Webber Wentzel did not threaten News24 with legal action, as falsely alleged in the article. Webber Wentzel simply indicated that Akani’s rights “are reserved, including – without limitation – in relation to any unlawful defamatory allegations“.
Conclusion
Akani Properties and Akani RFA are proudly South African companies committed to delivering services of the highest quality, including to the MEPF. The incorrect, misleading and unfounded allegations contained in the News24 article are unfortunate, particularly as they were designed to impugn the reputation of Mr Letjane, Akani Properties and Akani RFA. These matters are not taken lightly. The allegations in the article are plainly unsustainable.
We call upon News24, without delay, to retract the article, in the interests of journalistic integrity and to prevent the further publication of unlawful, false and defamatory allegations, and reserve Akani’s rights, in relation to the content and publication of the article.
