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Johannesburg - Mining magnate Mzi Khumalo has finally been hit with a R1bn order of forfeiture by the Reserve Bank for flouting exchange control laws, almost a decade after the authorities first pursued him.
Finance Minister Pravin Gordhan has attached Khumalo’s shares in more than a dozen companies; football club Lamontville Golden Arrows, which he bought in August 2004; a Sandton, Johannesburg, property; and interest in a R50m private jet, the Raytheon 390 Premier 1 aircraft.
The order is said to be one of the biggest issued by the Reserve Bank.
In the order of forfeiture, signed by deputy governor Lesetja Kganyago on August 2, the Reserve Bank lists the assets it wants Khumalo to forfeit to the state.
The assets include interests in 15 companies and investments held by Deutsche Bank.
The 56-year-old businessman lost a lengthy legal battle after he secured a R760m loan from Deutsche Bank in London, using his Harmony Gold shares.
Khumalo bought Harmony Gold shares from his partners in Simane Security Investments valued at R2bn from a 2002 empowerment deal and made a hefty profit when the share price rose to R186.80 from R37.30.
Simane Security Investments lists lawyer Themba Langa and erstwhile Home Affairs director-general Mavuso Msimang among its former directors.
The Reserve Bank launched an investigation and issued its first notice of forfeiture in August 2008, but Khumalo took the matter to the North Gauteng High Court.
He argued that the exchange control regulations used by the Reserve Bank were unconstitutional and invalid. He succeeded.
However, Khumalo lost at the Supreme Court of Appeal in March last year, paving the way for the order to be enforced.
Khumalo and his Mawenzi Resources and Finance Company, which has his personal investments, were listed as respondents in both court cases.
Cash generated from the forfeiture will be paid into the National Revenue Fund, in which all money received by the national government is kept.
Last month, City Press reported that Khumalo was closing shop in South Africa with his main corporate entity, Metallon, going into final liquidation.
In June, Andile Reve, chief executive of Khumalo’s Metallon Gold, successfully appealed the registrar of companies and closed corporations’ decision to deregister the company.
The Companies and Intellectual Property Commission was ordered to restore Metallon Gold’s registration.
Reserve Bank strategy and communications head Hlengani Mathebula said the country’s central bank did not comment or provide information on investigations, whether current or complete.
Khumalo is a former ANC Southern Natal treasurer and was one of the earliest recipients of BEE funding after his release from Robben Island, where he had served a term for his involvement in Umkhonto weSizwe.
He owns a beach house at the luxury Zimbali Estate on the KwaZulu-Natal north coast, where his neighbours include arms deal kingpin Fana Hlongwane and former justice minister Penuell Maduna. When City Press visited the estate recently, cleaners said Khumalo hardly made use of the house, which they understood to be up for sale.
A former ANC colleague who is also in business and who spoke off the record said while Khumalo was under increasing business pressure, it was unlikely that his current woes would bankrupt him.
“You need to understand that Mzi is enormously wealthy, and has massive mining and other interests outside South Africa. My own understanding is that the bulk of his money is outside, not inside, South Africa.
“Even if he is forced to cough up, there is no way that this will break him financially.
“He just has far too much wealth for that to bankrupt him,” he said.
Khumalo could not be reached for comment, while his lawyer Tayob Kamdar failed to respond to questions.
- City Press
Finance Minister Pravin Gordhan has attached Khumalo’s shares in more than a dozen companies; football club Lamontville Golden Arrows, which he bought in August 2004; a Sandton, Johannesburg, property; and interest in a R50m private jet, the Raytheon 390 Premier 1 aircraft.
The order is said to be one of the biggest issued by the Reserve Bank.
In the order of forfeiture, signed by deputy governor Lesetja Kganyago on August 2, the Reserve Bank lists the assets it wants Khumalo to forfeit to the state.
The assets include interests in 15 companies and investments held by Deutsche Bank.
The 56-year-old businessman lost a lengthy legal battle after he secured a R760m loan from Deutsche Bank in London, using his Harmony Gold shares.
Khumalo bought Harmony Gold shares from his partners in Simane Security Investments valued at R2bn from a 2002 empowerment deal and made a hefty profit when the share price rose to R186.80 from R37.30.
Simane Security Investments lists lawyer Themba Langa and erstwhile Home Affairs director-general Mavuso Msimang among its former directors.
The Reserve Bank launched an investigation and issued its first notice of forfeiture in August 2008, but Khumalo took the matter to the North Gauteng High Court.
He argued that the exchange control regulations used by the Reserve Bank were unconstitutional and invalid. He succeeded.
However, Khumalo lost at the Supreme Court of Appeal in March last year, paving the way for the order to be enforced.
Khumalo and his Mawenzi Resources and Finance Company, which has his personal investments, were listed as respondents in both court cases.
Cash generated from the forfeiture will be paid into the National Revenue Fund, in which all money received by the national government is kept.
Last month, City Press reported that Khumalo was closing shop in South Africa with his main corporate entity, Metallon, going into final liquidation.
In June, Andile Reve, chief executive of Khumalo’s Metallon Gold, successfully appealed the registrar of companies and closed corporations’ decision to deregister the company.
The Companies and Intellectual Property Commission was ordered to restore Metallon Gold’s registration.
Reserve Bank strategy and communications head Hlengani Mathebula said the country’s central bank did not comment or provide information on investigations, whether current or complete.
Khumalo is a former ANC Southern Natal treasurer and was one of the earliest recipients of BEE funding after his release from Robben Island, where he had served a term for his involvement in Umkhonto weSizwe.
He owns a beach house at the luxury Zimbali Estate on the KwaZulu-Natal north coast, where his neighbours include arms deal kingpin Fana Hlongwane and former justice minister Penuell Maduna. When City Press visited the estate recently, cleaners said Khumalo hardly made use of the house, which they understood to be up for sale.
A former ANC colleague who is also in business and who spoke off the record said while Khumalo was under increasing business pressure, it was unlikely that his current woes would bankrupt him.
“You need to understand that Mzi is enormously wealthy, and has massive mining and other interests outside South Africa. My own understanding is that the bulk of his money is outside, not inside, South Africa.
“Even if he is forced to cough up, there is no way that this will break him financially.
“He just has far too much wealth for that to bankrupt him,” he said.
Khumalo could not be reached for comment, while his lawyer Tayob Kamdar failed to respond to questions.
- City Press
