Zuma’s flight of fancy

The foray by President Jacob Zuma’s financially embattled son, Edward, into the low-cost airline market was described yesterday as alarming, and opposition parties have promised to keep an eagle eye on his new business venture.

Edward Zuma, notorious for not paying his bills, which total nearly R6 million, is a leading player in a fledgling consortium with a 75 percent stake in South Africa’s newest low-cost airline, Fastjet, which this week announced its entry into the competitive market.

Playboy businessman Zuma is one of four directors of a hitherto unknown company called Blockbuster, the local partner that has stepped in to help multinational Fastjet skirt a law that dictates that airlines should be under 75 percent South African operation control.

Edward Zuma is mired in controversy. He has yet to pay for his 2012 wedding, and has defaulted on repayments of two loans from state bank Ithala, amounting to approximately R6m.

The other directors of Blockbuster are businessmen Zakiyyah Vawda, Yusuf Kajee and Paul de Robillard.

Zuma and Kajee have a lengthy history of business dealings, and have been joint directors in other companies, while De Robillard has close ties to Fastjet, and is rumoured to have brokered the deal.

Vawda, Zuma and De Robillard have only been directors of the consortium for 10 days, according to the companies register.

Zuma appears to have been pulled into the deal to beef up the consortium’s BEE credentials, a move that has been widely slated in the financial media because of Zuma’s less than successful track record in business.

Blockbuster, which was established in May 2011 and has now been renamed Fastjet Holdings, will operate on the licence and infrastructure of Federal Air.

The airline is expected to make its first flight this week with a leased Boeing 737, running two flights a day on the lucrative Joburg to Cape Town route.

Zuma’s well-publicised plush lifestyle and money woes have dominated headlines.

Last year, his flash wedding to Phumelele Shange at the Tala Game Reserve was attended by more than 500 guests and came with a price tag of R2.5m. After paying a R1m deposit, Zuma is alleged to have reneged on his agreement with Paul Mann, the owner of organisers Functions for Africa.

Zuma had given Mann a letter assuring him he was due R28m in foreign funding, but after the wedding, he refused to answer Mann’s calls, prompting legal action.

Household goods and a BMW X5 were seized by the sheriff of the court, but never went under the hammer, because an 11th-hour payment to Mann last year averted this.

Mann confirmed yesterday that the wedding bill had still not been settled, and that he was proceeding with legal action. He did not want to be drawn on news of Zuma’s involvement in Fastjet.

Ithala this week confirmed it was still engaged in a legal battle with Zuma to recoup two loans worth R4.4m and R512 000.

Moneyweb this week reported De Robillard was the key figure in the airline deal, which saw Fastjet’s UK shareholder invest R28m in the local venture. The report detailed De Robillard’s close friendship with the UK management of Fastjet.

The story quoted Federal Air chief executive Evan Bailey as saying that all of the start-up funding would be sourced from Fastjet.

“The funding is coming from Fastjet. All revenues come to Federal Airlines, and there is an agreement on what portion of those funds remain with us,” he said.

According to Bailey, Zuma and Kajee were roped into the deal to provide BEE credentials.

“I think the rationale (for Zuma getting involved) was a political play… it is important that we have somebody… we are going to be scrutinised by regulatory authorities,” he was quoted as saying.

When initially contacted by the Sunday Tribune, De Robillard agreed to speak, but then directed all queries to Fastjet chief executive Ed Winter, who could not be reached. Repeated attempts to contact Zuma, Vawda and Kajee were unsuccessful.

Richard Bodin, Fastjet’s SA chief executive, when questioned about where Fastjet’s local funding had originated, said: “We’re not commenting any further.” He said he was “definitely” not commenting on Zuma’s debts.

Bodin said on radio this week he expected the company to invest a “great deal more” than the R28m already sourced from the UK.

Fastjet has a reputation for not settling its debts, according to a report in the London Daily Telegraph, which said Fastjet left a legacy of unpaid debts in Kenya, where a R60m deal had gone awry.

The DA’s spokeswoman for public enterprises, Natasha Michael, said Fastjet’s lack of transparency was disturbing. “The first thing we hear they (Fastjet) are trying to do a deal with 1time, and all of a sudden they are in business with the president’s son. It’s alarming.”

IFP transport spokesman Petros Sithole said Zuma’s involvement with Fastjet was “worrying”.

“If you attach the Zuma name to anything, you will make money.” - Sunday Tribune.

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