Zuma's Nkandla costs 224% more than infrastructure projects...

[DJ...]

Another bit of information is that Chianti Lifestyle Estate was only completed in 2006. So the registered offices of Korong Capital Partners were actively and knowingly changed to this address at least 7 years after company registration. Therefore in 2006/2007, they were not an operating company, so they would have had a near zero balance sheet and zero revenue, or they would have used their actual company premises on the CIPRO registration. One can very easily deduce that this took place not in 2006/2007, but rather in 2009/2010 when they went through the deregistration and cancellation process, which would have required them to provide accurate registered offices information.

So apparently, Korong Capital Partners who remained a dormant, shell company for 10 years, suddenly managed to find funding to the tune of R1.5bn in one to two years, without ever spending a cent of this cash during the process. Either that, or they're the most incredible business in history - working with an average net profit of 20% for a startup, they'd have had to have made R7.5bn net profit in their first year of operation to have the cash on hand to fund this project. This would have required around R37.5bn in revenue. Neither of these two scenarios are plausible.

Additionally, if they are funding it through the capital markets with a fixed income bond, I cannot find the prospectus for this, so it must have been a private placement, if anything. In order to obtain such financing, the bank would have required a positive balance sheet sufficient to cover the outlay and coupon rates. So they'd have had to have grown their balance sheet, including depreciation, to the tune of around R5bn and shown forecasted revenue, however they earn no revenue from this deal they're doing. They'd also have had to provide detailed, and accurate cashflow forecasts to cover their debt, which is impossible for a company with no revenue and dishing out projects for free.

So the long and short of it is that nobody would have originated a bond of this nature for them at all.
It is impossible for them to have gone un-noticed while becoming the most successful company in SA history, with revenue of around R37.5bn in their first year of operations. This is just not possible.
They also couldn't possibly have raised investment for this project, as it is a straight loss-making venture. No investor would touch this investment - it's just logical.

So where did Korong Capital Partners' money really come from? How can they afford to fund a R1.5bn project? Quite simply, there is no way (based on information in the public domain) that they could ever fund a project of this nature...

[DJ...]

That is exactly what DJ was querying - the company is run from someone's house, there are no business rights on the house, so that implies that it is not a huge operation.

It implies that this company to date has had no fixed premises and therefore as a venture capital/private equity company, they have no revenue. And yes Fudzy - this is a tiny little townhouse that's actually pretty cheap...

[DJ...]

That is exactly what DJ was querying - the company is run from someone's house, there are no business rights on the house, so that implies that it is not a huge operation.

Furthermore, the fact that there are no business rights on these complexes means that he cannot run a business from them, yet he's registered as such, and recently changed it too. How can Public Works partner with a company that has no fixed premises; has no revenue; no balance sheet to speak of; and is being illegally run from premises with no business rights?

[Fudzy]

Furthermore, the fact that there are no business rights on these complexes means that he cannot run a business from them, yet he's registered as such, and recently changed it too. How can Public Works partner with a company that has no fixed premises; has no revenue; no balance sheet to speak of; and is being illegally run from premises with no business rights?

They shouldn't, isn't there a whistleblowers hotline for that sort of thing?

[blunomore]

Furthermore, the fact that there are no business rights on these complexes means that he cannot run a business from them, yet he's registered as such, and recently changed it too. How can Public Works partner with a company that has no fixed premises; has no revenue; no balance sheet to speak of; and is being illegally run from premises with no business rights?

You can run a small business from home without business rights; however, from the figures being bandied about, this is not supposed to be a small business.

[DJ...]

You can run a small business from home without business rights; however, from the figures being bandied about, this is not supposed to be a small business.

I don't think you can run a CC from premises without business rights...

[burn]

Their registered offices are as follows:

UNIT 2 CHIANTI ESTATE
39 LEEUWKOP ROAD
SUNNINGHILL
2196

If you got this address from a CIPC search, don't read much into it. Many companies just put their accountant's address down or which ever party registered the company for them. I've even seen the company secretaries home address used.

[Bern]

For those interested, Korong Capital Partners, who are funding the entire freeway project and then handing it over to government (apparently), at a cost to Korong of at least R1.5bn and absolutely no return on investment, have been a registered company since 1999, yet no information exists for them working on anything whatsoever - ever. They appear to be a one-man show with no real operations, who attempted to deregister as a CC in 2009 and then cancelled the deregistration in 2010. Shortly after that they offered to build the Nkandla freeway for free - a R1.5bn project.

Their registered offices are as follows:

UNIT 2 CHIANTI ESTATE
39 LEEUWKOP ROAD
SUNNINGHILL
2196

So this company who apparently have R1.5bn spare to flush down the toilet, are situated at unit 2, Chianti Estate in Sunninghill, a location that does not have business rights for its units, and where units go for around R500k. So how does this company operate from this 80sqm apartment and manage to rake in cash in such vast quantities that it can simply dish out R1.5bn to government, because it feels generous? And who lives there at unit 2 Chianti Estate? And why are they operating a business from these premises? I mean a company with this sort of spare cash lying about is certainly operational prior to the funding of the project. If not, and more plausible, who deposited the R1.5bn into Korong Capital Partners' account to fund this project? And what does the US attorney who is being paid to be the middle-man, have to do with this deal?

Very interesting - the plot thickens!! BTW you can run a business from a residential address, you just have to live there as well as well as far as I remember. You can then write off some of the space to business use for tax (like a dedicated office) not the whole place.

But it is obviously not a real company, no one with R1.5 billion in SPARE CASH could operate from such a small space as it would require a much higher turnover, even if we were talking some internet startup with virtually no cast base. I look forward to finding out more details.

[blunomore]

DJ, what do you intend doing with the info you gathered?

Or do you just leave the DA to do their own investigations?

[DJ...]

If you got this address from a CIPC search, don't read much into it. Many companies just put their accountant's address down or which ever party registered the company for them. I've even seen the company secretaries home address used.

Companies with revenue of R37bn do not add their accountant's address. Companies with a positive balance sheet to the tune of R5bn don't do so either. I highly doubt that this is just a random employees' address if they're as big as they'd have to be. Or they're a tiny company who recently came into an incredibly large amount of cash to donate. It's not right either way...

[Bern]

See this article as well:

http://m.news24.com/citypress/SouthA...-road-20121110

Mpuru is Korong’s only registered director.

Through his “partners”, Mpuru said, he had secured funding for the project, but needed to pay a US-based attorney $100 000 (R870 000) in legal fees for the “initial phase of the funding” to be released.

It is not clear who Mpuru’s partners or funders are and whether they are based in the US.

Mpuru offered the local construction company the first 10km of the road – and more work – in return for a loan of R1 million to pay the US lawyer.

A former member of the Azanian Students Organisation, Mpuru keeps a low public profile. His Matimba Resources was the BEE partner of Australian miner Blackthorn Resources in a nickel-platinum project at Mokopane.

He couldn’t secure R4 million to buy Blackthorn’s 74% equity in the project early last year.

[DJ...]

DJ, what do you intend doing with the info you gathered?

Or do you just leave the DA to do their own investigations?

I'll forward it to Thuli's office, Lindiwe's office, and Carte Blanche...

[Bern]

If you got this address from a CIPC search, don't read much into it. Many companies just put their accountant's address down or which ever party registered the company for them. I've even seen the company secretaries home address used.

Companies that have R1.5 billion in spare cash to throw around??

[DJ...]

See this article as well:

http://m.news24.com/citypress/SouthA...-road-20121110

He also initially attempted to fund the project through a loan from the construction company tasked with the surfacing. When they rejected that offer, he suddenly found angel investors willing to part with R1.5bn. It appears this money is coming from The States or is at least being washed there...

[blunomore]

See this article as well:

http://m.news24.com/citypress/SouthA...-road-20121110

If there is a US based attorney involved, would it be a stretch to assume that that is where the funds originated?