Sisa Ngebulana, who became the first black CEO in the R150bn listed property sector in May when he placed Rebosis Property Fund on the JSE, first hit the media headlines in 2007.

At the time, the lawyer-turned-developer caused a stir when his Billion Group pipped three of SA’s big guns — Zenprop, Atterbury and Investec Property — to develop East London’s first regional mall.

Ngebulana hit the headlines again earlier this month. This time the media exposure was less flattering, with allegations that his ties with Lonwabo Sambudla, President Jacob Zuma’s sonin-law, had landed Billion a R1bn tender to build the department of public service & administration’s new head office in Pretoria.

The claims couldn’t have come at a worse time, following the controversy around dodgy leasing deals between property baron Roux Shabangu and the SA Police Service. But Ngebulana dismisses the allegations against Billion as a smear campaign. “These reports were factually incorrect. The tender hasn’t been awarded yet. Besides, Billion is not directly involved in the bidding process, and neither is Sambudla.”

Billion is being contracted as the developer by two companies that submitted independent bids for the tender — Alkara 334 and Zacacode. Ngebulana admits to being friends with Sambudla, a property broker who grew up in the same Eastern Cape town of Mthatha as Ngebulana. But he stresses that Sambudla is not a director, shareholder or employee of the two companies who submitted bids for the tender or of Billion.

What worries Ngebulana is that the perception is being perpetuated that black property professionals are benefiting from business deals with government only because they know the right people. “It negates the years of hard work done by many black entrepreneurs to build their own businesses from scratch.”

Ngebulana concedes that government is a lucrative client for commercial property owners. It’s estimated that public works spends at least R1bn/year on renting office space across SA.

But he stresses that fewer than 10% of government-leased buildings belong to BEE players.

In Billion’s case, government will occupy only 14,5% of its current R7bn development in the pipeline, and contributes 36% of the income from the company’s R3,8bn Rebosis portfolio. “The bulk of our properties are shopping centres leased to private-sector tenants.”

Unfortunately, says Ngebulana, government’s drive to increase its exposure to black property owners has opened the door to a lot of fronting, with many rogue players entering the industry simply to make a quick buck. “A BEE entrepreneur is not the same as a BEE deal-maker.”

Ngebulana says the only way to restore credibility to the government leasing process is to make tender procedures more transparent. “It’s become crucial for all to understand what the rules of the game are and what processes are followed in awarding building tenders.”

Source: Financial Mail