The Pretoria High Court has dismissed an application by record label boss and musician Arthur Mafokate to have his multimillion-rand lodge La Villa Rossa in Midrand released from a preservation order.
The Asset Forfeiture Unit (AFU) was granted the order to preserve the property in 2022, following an investigation by the Special Investigating Unit (SIU) that the 999 Music allegedly bought it with the National Lotteries Commission (NLC) grant.
Investigations by the SIU revealed that Mafokate’s non-profit organisation, South African Arts and Development Organisation (SAADA) was granted R9.3 million to assist and develop unemployed youth in the arts and entertainment sector.
But according to the court records, SAADA allegedly only used R1.8 million of those funds on the project and used the remaining funds of R7.5 million to purchase the guesthouse.
Mafokate however argued that he was entitled to the R7.5 million as his businesses delivered the services as required by the NLC and that he had committed no offences.
“The National Prosecuting Authority however argued that although some kind of services were rendered, it was at most R1.8 million.
“The remainder of the funds was used to purchase the guest house, which was not the purpose of the grant allocation.
“The funds used to purchase the guest house was thus stolen from the NLC as it was not used for the allocated project,” said NPA Regional spokesperson Lumka Mahanjana.
The court ruled that it was against the terms and conditions of the grant for SAADA to carry over its obligations to any other organisation, and that SAADA should have also returned any unused funds to the NLC.
According to Mahanjana, the musician failed to convince the court on how he could afford to purchase the guest house if it was not for NLC funds, as there was a small balance of money in his business accounts when the grant was received from the NLC.
“This judgment paves the way for the AFU to enroll the matter for the final forfeiture of the guest house and all the other luxury properties worth millions of Rand purchased with stolen NLC funds.
Should the forfeiture application be successful, the guest house will be sold at a public auction and the proceeds returned to the NLC,” added Mahanjana.
Mafokate was ordered to pay the SIU’s legal parties and the cost of the application.
