Human Settlements Minister Tokyo Sexwale has a stake in a company that financed a BEE deal which led to the development of an apartment block now used to house government ministers.
The Sunday Times has established that the Department of Public Works paid R20-million for 16 apartments and two penthouses in Muizenberg, Cape Town.
The penthouses at Sunrise Villas, valued at R7.8-million, have eight bedrooms, a jacuzzi, private elevators and braai areas on a combined entertainment deck overlooking False Bay.
"The penthouses are used as transit units for ministers and deputy ministers while their official residences are being upgraded. For security reasons, we are unable to disclose which ministers are currently being accommodated there," said Mandisa Fatyela-Lindie, Director-General of the Department of Public Works.
Sexwale's spokesman, Xolani Xundu, said that Sunrise Villas posed no conflict of interest because, since returning to public office, Sexwale's business interests were managed by a "blind trust".
But DA shadow minister of public works Anchen Dreyer said the link hinted at "government doing business with government, which is fundamentally wrong".
The Department of Public Works confirmed this week that an agreement to buy the properties was entered into with MSP Developers in 2010.
MSP Developers is 50%-owned by One Vision Investments, a broad-based BEE initiative financed by Mvelaphanda Holdings, the business empire founded by Sexwale.
Dreyer is now asking questions in parliament about Sunrise Villas. "It raises a definite conflict of interest. Government ministers or officials in the public service should not be doing business with the state as a matter of principle," she said.
Xundu rubbished the notion, saying Sexwale was "no longer involved in the day-to-day running of Mvelaphanda".
A blind trust involves placing assets under the control of an independent person or agency without the asset owner knowing how they are managed.
Said Dreyer: "The so-called blind trust doesn't seem to be so blind after all. Does the trust just happen to be co-developers of a property where the government just happens to buy apartments? Does the government really expect the voters to believe this fairy story? Who is the guide dog of this blind trust?"
The use of blind trusts by politicians made headlines two years ago after one of Sexwale's companies won a tender for security at King Shaka International Airport. Sexwale flaunted his business savvy in the 2005 hit show The Apprentice as the mastermind behind Mvelaphanda Holdings.
He relinquished direct control when he returned to government as minister of human settlements in 2009. He declared his stake in Mvelaphanda before parliament in 2010, saying it was "controlled by a portfolio manager".
Conflicts of interest were raised in parliament last Tuesday. DA parliamentary leader Lindiwe Mazibuko asked if the ANC would benefit from an R840-billion infrastructure programme through its investment arm, Chancellor House. President Jacob Zuma replied that to exclude firms with political connections would surely mean "discriminating simply because they are politicians".
MSP managing director John Coetzee said their business was transparent. "The development is sold to the open market by various estate agents and is open to all purchasers," he said.
MSP's rentals agent at Sunrise Villas, Mark Assure, said the penthouses were last used when parliament opened in February.
"Most residents here are unaware of politicians coming and going. There isn't much interaction really, as the penthouses also have their own private elevator with a code-system," he said.
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