Liberty Group sues ANCYL's Lembede

PRETORIA - Liberty Group Holdings has confirmed that it is pursuing legal action against ANC Youth League front company Lembede Investment Holdings.  An arm of Lembede, has defaulted on the lease for its offices in Johannesburg's Sandton Towers.  If the judgement is granted, Lembede will have to pay Liberty the remainder of the lease agreement which runs until August 2011.

The City Press reported earlier this week that the amount owning to Liberty could come to as much as R450 000, but Liberty Properties Retail Director Mel Urdang says the amount has most likely been overstated.  The newspaper further claimed that Lembede's debts totalled more than R14m, but that most of its debtors were staying out of court in "fear of jeopardising future chances of getting work from government".

In a statement last week, the ANCYL announced the closure of the struggling entity:

"The National Executive Committee received a report on the closure of Lembede Investment Holdings, the investment wing of the ANC Youth League. We accepted a recommendation that Lembede should be closed to settle creditors and thereafter pay the residue to its shareholders as a liquidation dividend and that the implementation of the resolution should be that the assets of Lembede should be sold through unsolicited bid process which must be implemented simultaneously with the voluntary liquidation process."

Prior to this the City Press published an exposé alleging that Lembede directors, including Youth League leaders, were cut in for 30% of all deals Lembede signed while these directors served the company.

It further claimed that Lembede used its Youth League influence to land a R10m printing contract from the Limpopo government.  The report stated that Lembede's chief operating officer Ali Boshielo bought 80% of Review Printers, two months before the government contract was signed.

Realestateweb contacted Review Printers in Polokwane for comment on the article and according to Managing Director Ben de Jager, Lembede was in partnership discussions with Review Printers some two years ago, but nothing came of the negotiations. De Jager, who is also the owner of Review Printers denied that Lembede had a stake in the company and added that its contract for government printing was with the Government Gazette, not directly with the Limpopo government. The company that had purchased an 80% stake in Review Print was Mercuritech and as far as De Jager knew, this company had no ties with Lembede or the youth league.

Thus far ANCYL and Lembede officials have declined to comment on the allegations in the City Press, other than denying that there was any wrongdoing in the 30% Lembede share scheme.

Realestateweb could not reach ANCYL spokesperson Floyd Shivambu, or any of the Lembede directors for comment.

Get commercial property news by email

Free alerts when we publish — pick a focus or get everything, unsubscribe in one click. Subscribe »