Hawks probe R154m land deal

Alleged Big Five cartel member Steve Motsumi scored a questionable R67m “facilitation fee” in a R154m land deal involving the Gauteng department of human settlements that is now being investigated by the Hawks.

Forensic evidence reveals that during the final stages of negotiations to sell 579ha of privately owned agricultural land to the department in 2023, two companies belonging to Motsumi — who played no visible role in the transaction — were allocated a 43% commission, leaving the seller out of pocket.

Uncorroborated claims by a source close to the case are that Motsumi was introduced to one of the sellers by a human settlements official, suggesting his 11th-hour insertion into the deal may have been initiated by the department. This came after the deal had increased from an initial 2020 valuation of R120m to more than R150m when it was finally executed three years later.

Motsumi is a prominent businessman with interests spanning private security, construction, the taxi industry and money lending.

He is due to be grilled by the Madlanga commission on Friday on several allegations, including a plot to illegally acquire a military-grade “grabber” — a cellphone interception device — in a deal involving disgraced police officer Sgt Fannie Nkosi, the late Big Five cartel boss Jotham Msibi and suspected underworld kingpin Katiso Molefe. He is also said to have had a close relationship with suspended deputy police commissioner Shadrack Sibiya.

The land deal, which originated in 2018, saw three parcels of land in Farm Nooitgedacht 176 in the Midvaal Local Municipality sold to the government with the intention of developing residential settlements in an area surrounded by other farms and industrial operations. A visit to the site by the Sunday Times this week revealed no development other than an informal settlement.

The deal was negotiated by an entity known as Gauteng Highlands Holdings (GHH), associated with Springs urologist Rui Graça and businessman Sivile Mabandla, while the land was registered under Blue Rose Developments, a company in which Graça is a director. Mabandla is chairperson and 50% owner of both GHH and Blue Rose.

(Nolo Moima) In 2020, the two brought prominent mining engineering father-son duo Fred and Diego Crabbia and their entities on board in a deal that was meant to be a three-way split. But in 2022, Graça fell into financial difficulties and was persuaded to transfer the land to the entities CBR Developments, MV Developments, Circle Way Trading 293 and Renetech (Pty) Ltd.

In his statement to the Hawks, Graça alleges that Diego Crabbia then circumvented the agreed mandate for GHH to negotiate with the government and began his own talks, which culminated in a new agreement in which the price was increased and Motsumi’s companies were allocated the 43% commission.

A copy of the participation agreement underpinning this arrangement — which is understood to now form part of the Hawks investigation — simply notes that the fee, which is exempt from VAT, was in return for “services and expertise”. The agreement was countersigned by Motsumi and Diego Crabbia in October 2023 through Fluxmans Attorneys, where Motsumi’s lawyer, Charles Shapiro, is a director.

Graça alleges the R67m commission “constituted an unlawful gratification used to secure, accelerate or influence the department transaction (a bribe). If that allegation is proved, the payment cannot be treated as a legitimate commercial expense.”

The Hawks, formally the Directorate for Priority Crime Investigation, became involved as a result of the stand-off between the sellers.

Neither the Crabbias nor Motsumi responded to questions this week.

The Gauteng human settlements media department said it was aware that aspects of the transaction were under criminal investigation and would not comment on the details of the transaction.

“The department takes any allegation of fraud, corruption or irregularity in its transactions with the utmost seriousness,” it said, adding that it “co-operates fully with law enforcement agencies and will place all relevant information at their disposal”.

“It is equally committed to establishing the facts through its own internal processes, and where any wrongdoing by officials or third parties is found, it will act decisively and pursue all available remedies to protect public funds.”

(Nolo Moima) Graça alleged that Motsumi was introduced from the government’s side.

“Diego explained that, while attempting to finalise the land transaction, he had encountered a particular man coincidentally through the Housing Development Agency call centre.

“Diego stated that further discussions with that man led to the arrangement and payment of R67m as a ‘commission’ required to secure, facilitate or finalise the department transaction,” he said.

Publicly available information about the Crabbias focuses on the patriarch, Fred, formally known as Alfredo, who has made his name in heavy industrial manufacturing and international thoroughbred horse racing. He is the founder of Mining Pressure Systems (MPS), a company established in 1991, that supplies and fabricates piping, pipe specials and ancillary equipment for the mining and petrochemical industries.

Fred Crabbia is celebrated as one of South Africa’s most distinguished thoroughbred racehorse owners. His career is most famously defined by owning Rocket Man, widely regarded as one of the greatest racehorses in Singapore’s history. The horse has won numerous local and international accolades. His son is involved in the operations of MPS.

Although there is no evidence of the Crabbias purchasing the land, they ended up with the bulk of the balance of the sale after Motsumi’s payment, and e-mails between Diego Crabbia and Graça — who is now based in Portugal, where he also has citizenship — reveal serious acrimony.

In a March 15 2024 e-mail, Diego Crabbia defended the legitimacy of the R154m transaction and dismissed allegations of hijacking the deal and financial impropriety.

He said the purchase price was legitimately eaten up by unavoidable outlays, including a R71.4m “loan account payment” to recover capital advanced by his family on a separate failed deal in Zimbabwe and the R67m he describes as a “commission by partner”.

Diego Crabbia rejected claims that he had unlawfully sidelined his partners, arguing that Graça’s 34% profit participation of R3.5m was fully honoured out of the remaining R10m net profit pool, leaving him with “absolutely no reason to complain”.