Malema paid R2m cash for House

2011-07-31

ANC Youth League leader Julius Malema paid more than R2m in cash to buy a luxury house in Sandton.

In an exclusive interview with City Press, the previous owner of the R3.6m house revealed that Malema:

» First rented the house at R18 000 a month and paid the rent for a full year up front;

» Paid a cash deposit of R360 000 on the property; and

» Settled the outstanding amount of more than R1.7m on the R3.6m – after an Absa bond of R1.5m paid out – in “two or three” cash deposits into his account shortly after the sale went through.

Malema previously claimed that the house was fully bonded by Absa.
Millionaire lifestyle

This poses further questions about the source of Malema’s money, which funds his millionaire lifestyle.

To fund his lifestyle, an actuary calculated this week that Malema would have to earn about R123 000 a month.

City Press asked the actuary to estimate what monthly salary Malema would have had to earn to fund a moderate lifestyle, his two houses - in Sandown and Polokwane - and payments on his Mercedes-Benz C63.

The R123 000 puts Malema in the top 1.1% of earners in the country who receive an income of more than R1.2m a year.

Malema’s only official income is from the ANC, rumoured to be R50 000 a month or R600 000 a year.

This would only be enough to fund half of his lifestyle expenses, according to the actuary’s estimates.

Few cash buyers

Property economist Erwin Rode said on Saturday that he did not have statistics of South Africans who bought properties for cash compared with those who are bonded, but added that there were very few cash buyers.

“If I have to guess, I would say it is not more than 10% of buyers who pay cash for houses.

“Generally, a person who can put down R1.7m for a property is either a high-income earner or is close to retirement - typically people who are over 50 years old or earn in the top brackets.
It is very difficult for the man in the street to accumulate R1.7m after income tax.”

Malema has consistently labelled himself as “poor” and last year said he lives on “hand-outs”.

Confirmation of the cash transactions by the former owner of Malema’s Sandown house, Ken Hollingsworth, also undermines Malema’s public claims that the house is fully bonded by Absa.

Won't respond

At a press conference two weeks ago, Malema said: “That house you (the media) always make a noise about in Sandton ... it’s owned by Absa.
“And if I fail to pay it, for sure, Maria Ramos (Absa group chief executive) would be very happy she’s taking a house from a man who is leading a nationalisation campaign, because she does not want nationalisation.”

The Absa bond of R1.5m on the house only covers 42% of the total purchase price. The rest, according to Hollingsworth, was settled in cash paid into his bank account.
Malema this week failed to respond to questions about the purchase of the house, which is currently being demolished and rebuilt.

Revelations about more cash transactions followed after City Press revealed the existence of the Ratanang Family Trust last week, a vehicle allegedly used by Malema to receive cash bribes from contractors after facilitating government work for them.
Paid up front

A businessman who claims to have deposited R200 000 into the trust’s account told City Press the youth leader allegedly used the trust to receive money from politicians, companies, mayors, contractors and municipal managers in exchange for him facilitating deals and pushing certain political agendas.

On Thursday Malema told a public gathering in Queenstown that businessmen deposited money into the trust for him to distribute to a range of charities.

Malema failed to list these charities and the amounts allegedly paid to them.

According to Hollingsworth, Malema rented his Sandown house from May 2009 for R18 000 a month.

“He paid a deposit of two months’ rent (R36 000) and after that, the full balance (R180 000) was paid up front.”
Shortly after he moved into the property, Malema requested that he could make security renovations to the house, which Hollingsworth approved.

Balance paid in cash

In mid-2009, while visiting Cape Town, Malema contacted Hollingsworth and asked him to attend a meeting at the Twelve Apostles Hotel.

“Malema said he wanted to make an offer to buy the house.”

Hollingsworth didn’t want to sell the house at the time, but a few months later, he informed his estate agent that he was ready to sell.

“Malema paid a 10% deposit, which was R360 000, after the (purchase) documents were signed. He had an Absa bond for R1.5 million. The balance was paid in cash deposits into my account,” Hollingsworth said.

He couldn’t recall the origin of the payments and said he received the balance of about R1.7m in “two or three tranches”.

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