Bakubung used funds for microlender

[] — THE head of Mafori Finance, the microlender that has been drawn into a bitter feud which has split the Bakubung royal house, has confirmed that the clan is a controlling shareholder in the business.

Pakie Mphahlele, the managing director of Mafori, said this week that the poverty-stricken clan owned more than 50% of the microlender.

This is contrary to speculation that private equity and investment firm Musa Capital was the owner of the stake. “Musa Capital invested in Mafori through a fund controlled by the Bakubung.

“Unfortunately, I am not at liberty to disclose the amount of money that was invested because we are not a listed company,’ said Mphahlele.

His revelation provides clarity on what happened to half of the R700m that is reported to have been raised by using – as collateral – the Bakubung’s 117 million shares in platinum exploration firm, Wesizwe Platinum.

Government-owned lender Industrial Development Corporation and Germany’s Deutsche Bank provided the funding, which was meant to be invested in non-mining cash-generating businesses.

In April, Musa Capital, the financial advisers of the Bakubung, said half of the funds that were raised through the collateralisation of Bakubung’s shares in Wesizwe were invested in the money market.

But the firm declined to say where it had invested the balance of the funds. Musa Capital says it raised R527m.

There are rumours that the money is either missing or has been invested in Mafori, a takeaway franchise, a property development near Sun City or a hotel chain.

The fate of the R700m is the subject of a raging battle inside the Bakubung royal house.

Margaret Monnakgotla, who claims to be acting for the royal house, is legally seeking to dethrone her younger brother, Ezekiel, on the grounds that he mismanaged the family’s affairs. Whoever prevails will control the clan’s assets.

Mphahlele said he was concerned that his company had been dragged into the dispute. He maintained that there was nothing sinister about Bakubung’s investment in Mafori.

“I am worried about the reputational risk this may have on Mafori, but I don’t want to be reckless and give out confidential information to the media. “I do things according to the book.

“The company belongs to the Bakubung and at this stage it is profitable,’ he said.

Mphahlele said Musa’s directors William Jimerson and Antoine Johnson, who are both US citizens, are non-executive board members of Mafori.

“They are not operationally involved. They represent the Bakubung on our board,’ he added.

He said the investment by Bakubung and the involvement of Jimerson and Johnson in his company has had a positive impact, adding that when they came on board in 2007, Mafori had 18 employees but today has 134 employees.

“We have 25 branches across the country with a loan book of R125m,’ Mphahlele said.