The battle for the control of millions of rands in assets between the government and the association representing 117 displaced families who have been awarded the land on which the Wild Coast Sun Resort and Casino is situated will now be waged away from the courts.

People enjoy the water and view at the Wild Coast Sun Resort and Casino. (Photo: Phumlani Thabethe)

This follows the ruling of Judge John Smith in the Eastern Cape High Court on 18 August which ordered the Department of Agriculture, Land Reform and Rural Development (DALRRD) and the Mgungundlovu Communal Property Association (CPA) committee to settle the matter out of court. If they fail to do so within two months, the judge ruled, they can return to court.

Read more in Daily Maverick: “The battle for the ground Sol Kerzner used for Wild Coast Sun is still raging”

History of the land deal

A land deal was signed in October 2018, after which there was supposed to be a public event at which government officials handed over the title deed to the 700 hectares of land. But, because of the ongoing disputes, the official handover has been postponed.  

The entrance to the Wild Coast Sun Resort and Casino. (Photo: Phumlani Thabethe)

The deal stipulated that the land would be restored to the community from November 2019 and Sun International would rent the land on which the casino and resort are situated from the community at R4-million a year, rising by 6% a year. The agreement stipulated that the land claimants — also known as abasuswa (the displaced) — would take a 28.4% shareholding in the casino and resort.

The deal also saw the 117 displaced families receiving R23-million in financial compensation — R98,000 for each family — with another R27-million to be invested in developing tourism ventures that would provide job and economic opportunities to the community.

The R27-million was placed in a trust which is run and controlled by the CPA. Members of abasuswa say the CPA has been embezzling these funds and the monthly rental paid by Sun International and that CPA members are paying themselves exorbitant salaries. 

On 5 November 2020, the DALRRD approached the high court, seeking an order to put the CPA and millions of rands in assets overseen by it under administration. The department said it was forced to approach the court after receiving countless complaints from abasuswa. The department said the CPA was refusing to give it access to financial and other records. 

The bridge crossing the uMzimkhulu River that separates KZN and the Eastern Cape. It also leads to Wild Coast Sun Resort and Casino. (Photo: Phumlani Thabethe)

Judge Smith, in his August ruling, did not accede to the department’s application to place the CPA and the assets it oversees under administration, but ordered the CPA to provide its financial and other records.  

The two parties were given up to two months to find an amicable solution or working relationship, failing which either of the aggrieved parties can approach the court.

Struggling financially

One of the abasuswa is 56-year-old Philisiwe Koba, whose family was forcibly removed and relocated on rocky terrain in the late 1970s. He said CPA members are living large while the displaced families are struggling financially.

“We were supposed to get our stipend [which, according to the agreement, is paid every three months] last month, but it has not been paid to us yet.

“The CPA members are building huge houses. One of them is even building a big house for his girlfriend and bought himself a brand new Toyota 4×4 twin cab. We are struggling. Sometimes we don’t even have money to buy electricity or food.”  

Nkosiphendule Malundane at his home in Mzamba Mouth. (Photo: Phumlani Thabethe)

These sentiments were echoed by 35-year-old Nkosiphendule Malundane, who accused CPA members of giving jobs to their relatives.

“We heard that CPA members organised a secret meeting where they re-elected themselves so that they can continue to embezzle our funds,” he said.

Other displaced persons said they were not aware of the court battle between the DALRRD and the CPA.

“Nobody tells us anything,” said 66-year-old Solifina Vundla.

“It is very painful what the CPA is doing to us. We are supposed to be enjoying our old age and getting the money paid by the government and the casino for our land, yet myself and my family members sometimes go to bed hungry,” she said.

Machenge Khatula, a resident of Mzamba Mouth on the Wild Coast, walks home. (Photo: Phumlani Thabethe)

The Commission on Restitution of Land Rights said it was aware of the complaints by the land claimants, but it has no constitutional mandate to help them.

Zama Memela, the commission’s Eastern Cape provincial head, said the disputes between the claimants had prevented the commission from arranging a formal handover of the land, an event that is supposed to be addressed by the President or Deputy President.  

“The commission settled the claim and has transferred the land to the claimants. The matter was then handed over to the Tenure Reform and Implementation Directorate. The … directorate is dealing with the issues and the ongoing disputes.

Philisiwe Koba (54) a resident of Mzamba Mouth. (Photo: Phumlani Thabethe)

“The claimants are free to take the matter to an alternative dispute resolution process or to a court. At present, the claimants are being assisted through the post-settlement programme, which includes the intervention by the Tenure Reform and Implementation Directorate to regularise the CPA.

“The commission can only facilitate a hand-over event once all the problems within the community have been resolved. In the meanwhile, the commission has finalised the claim and handed the title deed to the CPA.”

CPA ‘will comply’ 

Members of the CPA referred queries to their lawyers. Catherine Marcus, an associate at Richard Spoor Inc, who represented the CPA in court, said: “The CPA will comply with the order by providing the department with the necessary documents as directed.

“The department will consider these documents and initiate any training it deems necessary. The CPA will continue its work for the benefit of the community, aiming to prioritise its budget towards direct dividend payments to beneficiaries and the ring-fencing of income for future job and wealth-creating investments, rather than needless litigation.

Henry Abrahams, a resident of Mzamba Mouth, walks home with his dogs. (Photo: Phumlani Thabethe)

“The CPA has stringent financial management protocols in place. The CPA committee (or other members) does not have access to the CPA’s funds or bank accounts.

“All payments made by the CPA (including salaries), using CPA funds, are made by a contracted accounting firm in terms of a budget which is approved by the CPA itself by majority vote at a general meeting of all members. All financial reports are similarly approved by a majority vote at a general meeting of all members.

“All members benefit equally from the proceeds of the income generated by the assets of the CPA. In particular, rental that is received by the CPA in terms of the lease agreement between the Wild Coast Sun and the CPA is divided equally between all households,” Marcus said.

She said some members of the community had been instigated to litigate by former land claim committee members who had been outvoted after they used their positions to enrich themselves.

A gravel road leading to Mzamba Mouth on the Wild Coast. (Photo: Phumlani Thabethe)

“The Concerned Group’s members, in part, appear to be former land claims committee members who previously used their positions on the … committee to benefit themselves through the BEE shareholder in the Wild Coast Sun, the Bizana Development Trust,” she said.

Still awaiting documents

Reggie Ngcobo, a spokesperson for the Department of Agriculture, Land Reform and Rural Development, said his department was “still awaiting” financial and other documents from the CPA.

“Once we get them, we will evaluate them and see whether any further legal steps are required or not. The judge also ordered that there should be a general meeting of all the claimants and all the documents should be read out to the satisfaction of everyone. 

“The judge gave both parties two months to resolve this issue. If we are not satisfied with the answers and the documents we get we can always go back to court,” said Ngcobo.

Smoke from a fire along the road leading to Mzamba Mouth on the Wild Coast. (Photo: Phumlani Thabethe)

Graham Wood, Sun International’s Group COO for hospitality, said: “The land claim has been finalised and … Wild Coast Sun Resort and Casino is leasing the land, on which it operates, from the Mgungundlovu Communal Property Association (MCPA). We can also confirm that Wild Coast Sun is indeed honouring agreements in place with the MCPA, but disbursement to the MCPA members is not managed by the Wild Coast Sun.

“It would be inappropriate for us to comment about alleged disputes relating to beneficiaries of the MCPA, but we can confirm that we are nevertheless complying with all contractual obligations.”

A rival land claim

The 117 displaced families are not the only ones laying claim to the pristine land facing the Indian Ocean.

In Mzamba, near the Wild Coast Sun Casino and Resort, lives a group of coloured people, who, according to members of the community, are the descendants of a Scottish settler, John Gordon Smith, who married the daughter of Pondo King Faku Sigcau. They say they have documentary proof that in 1866 Smith paid the king for part of the land and the rest was given to the king’s daughter as a wedding gift.

The Smiths claim that their forebears farmed the land and raised cattle on it. Smith paid taxes for the land until he died in September 1910. His descendants continued to pay taxes until the 1950s.

The Commission on Restitution of Land Rights said the land claim by the Smiths in the late 1990s had been rejected.

Memela said: “The land claim by the Smith family was investigated and was found to be non-compliant in terms of the Restitution of Land Rights Act. The investigation report was given to the lawyers representing the family for them to make further submissions on their claim.”

One of  Smith’s descendants, who serves on the committee tasked with claiming the land, said they had new evidence to back up their claim and were consulting with their lawyers.

“On the one hand, we are busy consulting with the lawyers and on the other, we are talking to the AmaMpondo Royal House to help us to get more information to validate our claim. The Pondo royal family, who are our distant cousins, are warming up to us and helping us.

“When we were talking about this matter, King Zanozuko died on 31 May 2022 after a short illness. Now we have started the process all over again under the acting queen, Nobandla Sigcau,” the committee member said. She did not want to be named, saying it could endanger her life.

Dr Ntsizakalo Ngalo, the chief administrator of acting Queen Nobandla, said the acting queen “will take this matter to other members of the royal family, including elders, to try and discuss and find evidence of the claim of the Smiths to royal lineage.

“The discussion will also revolve around the land claim and will involve the Eastern Cape government, the Department of Agriculture, Land Reform and Rural Development and other stakeholders. So, it is too early to determine which side of the claimants the AmaMpondo Royal House will support or not support,” Ngalo said. DM 

Timeline of a land claim

1976: The Transkei homeland, under Prime Minister Kaiser Matanzima, is given independence by the South African apartheid government. 

1979: Matanzima signs a land lease deal with Sun International founder and casino mogul Sol Kerzner, which allows Kerzner to build the Wild Coast Sun Resort and Casino on 430ha of land. The deal is followed by members of the Transkei Defence Force forcibly removing people to make way for the casino. The deal was later found to have been sweetened with a bribe to Matanzima and other members of the Transkei government, including Stella Sigcau.

1979: Matanzima appoints himself president of Transkei and elevates his brother, George Matanzima, to the position of prime minister.

1987: George Matanzima is ousted in a military coup. He is then charged with accepting $500,000 in kickbacks from a Lebanese businessman who needed to secure a housing contract in the Transkei. Further claims are made that Kerzner paid Matanzima and some members of his Cabinet R2-million to secure exclusive gambling rights in Transkei. 

1989: Matanzima is sentenced to nine years in prison for his role in this scandal. After serving three years of his sentence he was pardoned and released. Sol Kerzner, who admitted to the bribery claim, mysteriously avoided prosecution until he died of cancer in March 2020.

1994: South Africa holds its first democratic elections. An ANC-led government takes over and the homeland governments are scrapped. 

1996: Bantu Holomisa, the former military leader of Transkei, testifies before the Truth and Reconciliation Commission that Stella Sigcau, who was serving as the minister of state enterprise, had received a R50,000 bribe from Kerzner as part of the Wild Coast land and casino deal. After testifying, Holomisa is expelled from the ANC and loses his position as deputy minister.

1995: The Mgungundlovu community lodges a land claim for 700 hectares of land, which includes the 430ha on which the Wild Coast Sun Resort and Casino is built. 

1996: The land claim by the Mgungundlovu community is gazetted.  

2018: The Mgungundlovu community is awarded the 700ha of land. 

5 November 2020: The Department of Agriculture, Land Reform and Rural Development (DALRRD) approaches the Eastern Cape High Court seeking an order to place the Mgungundlovu Community Property Association (CPA) and its assets under administration.

18 August 2022: Judge John Smith orders the DALRRD and the CPA to settle the matter out of court. DM