Cape Town – The Special Tribunal has ruled that a land reform lease agreement between the Department of Rural Development and Land Reform and Cultiver Investments is irregular and unlawful.
According to the Special Investigating Unit (SIU), the agreement was made in 2019 after the department’s minister at the time, Maite Nkoana-Mashabane, ordered the agreement to be concluded despite three independent forensic reports advising against it.
The agreement was related to a chicken farm in Limpopo, and it followed a previous agreement between Cultiver Investments and Nkoana-Mashabane, where the company agreed to withdraw a High Court application in exchange for the department signing the lease agreement.
“The lease agreement followed an agreement reached between Cultiver Investments and Ms Nkoana-Mashabane for Cultiver Investments to withdraw a High Court application on condition that the Department will sign a lease agreement. The High Court application sought to compel the Department to conclude a lease agreement following the expiry of a one-year caretaker agreement with Cultiver Investments in respect of Mike’s Chicken farm.
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“In May 2013, the Department and Mike’s Chicken concluded an agreement for the sale of nine immovable properties. The immovable properties comprised of chicken hatchery farms which the Department acquired as a going concern for approximately R137 million and appointed Cultiver Investments as a caretaker,” the SIU said.
The SIU found several irregularities and failures in the agreement and related processes.
These included irregularities in the approval process for acquiring the chicken farm, lack of due diligence, absence of beneficiary verification or vetting, failure to identify a strategic partner, contravention of the Public Finance Management Act, lack of profitability and long-term viability of the business, and poor business strategies to address challenges.
The SIU became aware of the decision to conclude the lease agreement in March 2019 and initiated legal action in the Special Tribunal in November 2019 to declare Nkoana-Mashabane’s decision irregular and unlawful.
The Special Tribunal, which handles matters arising from SIU investigations, ordered on April 19, 2023, that the lease agreement is declared irregular and unlawful. The tribunal has directed the parties involved to convene a case management meeting to determine the next steps and appropriate remedies in the matter.
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Composed by Betha Madhomu
