The dispute between the Government Employees Pension Fund, Isago @N12 Developments, and Isago Property Holdings over the sale of land in the Matlosana Local Municipality, through the Public Investment Corporation, is heading to the Supreme Court of Appeal.
Image: IOL / File
The legal battle over the sale of City of Matlosana land for R510 million funded by the Government Employees Pension Fund (GEPF) is now heading to the Supreme Court of Appeal (SCA).
The dispute relates to four agreements signed in November 2018 between the GEPF, acting through its agent, the Public Investment Corporation (PIC), and Isago @N12 Developments, and Isago Property Holdings for the acquisition of a 60% undivided share in land for a purchase price of R510m.
Among the deals concluded is one stating that Isago, the GEPF, and ENSAfrica, including an escrow agreement which provided that R306m of the purchase price for the land would be held in an escrow account administered by the law firm, with the accrued interest to be paid to Isago upon a release notice duly executed by the fund.
The sale of the land to Isago by the City of Matlosana in October 2007 was structured to transfer a tract of land, which is about 1.124 hectares along the N12 highway, for development, and the municipality retained control over the project’s progression. GEPF viewed the 2018 sale of the immovable property as unlawful and irrational.
The fund said Isago purchased the land from the City of Matlosana in 2009 under an agreement that required the company to develop it and prohibited its sale to third parties except under specified conditions.
In addition, the GEPF insisted that its decision to purchase was based on incorrect information provided to the PIC, which is that necessary township approvals were not in place and that the valuation of the property was fundamentally flawed.
In September last year, the North West High Court ordered that ENSAfrica be interdicted from disbursing any further interest payments to Isago pending the finalisation of the review application. Isago then filed an application for leave to appeal.
On Wednesday, Acting Judge Marion Wessels granted Isago leave to appeal to the SCA several orders in the long-running saga.
The orders include one in which the company’s conditional answering affidavit was disregarded, another dismissing its application for postponement, prohibiting it from bringing applications for leave to appeal until the proceedings are completed, and prohibiting it from appealing against that prohibition.
Additionally, Isago was granted leave to appeal the order restraining ENSAfrica from disbursing any further funds from the escrow account to the company, which effectively ceased monthly interest payments of about R2m.
GEPF has been ordered to produce certain documents within 10 days and provide an unredacted copy of the investment management agreement concluded in March 2022, as well as two addenda to the agreement entered into between the fund and the PIC in 2007, and the investment portfolio structure, risk parameters, benchmark, and fees.
The documents shall be provided subject to the confidentiality regime, which has been adopted as an order of court.
The judgment stated that, for the avoidance of doubt, parts of the draft non-disclosure agreement circulated by the GEPF in January this year are not part of the confidentiality regime and shall not be enforced.
loyiso.sidimba@inl.co.za