Africa-Press – Eswatini. Who is the landlord receiving rent from Logico for using government-owned factory shells?
This question emanates from statements by the Ministry of Housing and Urban Development and the Ministry of Commerce, Industry and Trade, that they do not know the bank account to which the money was being deposited to by Logico. A sum of E50 million was spent on the construction of the factory shell in Matsapha. Government has reportedly standardised rentals for its factory shell, with a square metre costing E25-E30. The property is registered as Plot No.764. Its actual size could not be ascertained but a source estimated it at 6 300 square metres. If this is the case, the rent could cost E157 500 per month at minimum. This is based on the standardised rates for government factory shells in Matsapha. At maximum, the rent could cost E189 000 per month, translating to E2.268 million per year.
operations
Tuntex constructed the factory shells on Plot No. 764 and it is where Logico currently operates. Tuntex operated two blocks of factory shells on King Mswati III Avenue in Matsapha.
Impeccable sources told the Times SUNDAY that the Ministry of Commerce, Industry and Trade was told five years ago that the Logico factory shell was under the Ministry of Housing and Urban Development. It has been established that the Housing Ministry made it clear that neither the Commerce Ministry nor the Eswatini Investment Promotion Authority should manage this particular factory shell. Sources revealed that the Office of the Attorney General (AG) had advised the Commerce Ministry to manage the Logico factory shell. Government factory shells are managed by EIPA, a department under the Ministry of Commerce, Industry and Trade. It turned out that a defunct company, Tuntex, has been collecting the rent from Logico. It could not be ascertained why Tuntex became the landlord. Dr Simon Zwane, the Principal Secretary (PS) in the Ministry of Housing and Urban Development, said he had made enquiries on what was really happening with the rent issue and discovered that officials also lacked knowledge of the account to which the rent was deposited.
cessation
He said he was told that Tuntex basically built the factory shell on government land. Dr Zwane said the contract stipulated that Tuntex would lose the right to own the factory shell upon cessation of manufacturing and operations. He said people with authority to comment on the matter could be the Office of the AG. The cessation of manufacturing and operations occurred in 2012. Investigations by this newspaper revealed that an attempt by the Commerce Ministry to recover lost rentals failed as an ex-senior official of the Housing Ministry claimed the factory shell was not under the former. At that time, in other cases, government found that the rentals were as low as E4 per month. Anthony Geldard, the Chief Executive Officer (CEO) of Logico said he would only share the information that was for public consumption, not the confidential material. Geldard said Logico moved into its current premises in August 2014. For approximately five to six years, he explained that the company paid rent to Tuntex Corporation.
The CEO said they paid the rent to the defunct Tuntex because they owned some of the properties Logico ‘currently occupies’. He disclosed that this was approved by the then relevant ministers in the relevant ministries. He did not disclose their names. In approximately 2019, he said the Eswatini Government and Tuntex reached an agreement between themselves to which Logico was not privy. He said Logico then made an agreement with the Eswatini Government for a 25-year lease on the properties concerned. Geldard had been asked the following questions –
1. Logico Eswatini neither pays rent to the Ministry of Commerce, Industry and Trade nor Eswatini Investment Promotion Authority (EIPA). Kindly share with us which public institution receives rent from Logico for using the Matsapha factory shells, which are owned by the Government of the Kingdom of Eswatini?
2. With due respect, how long has Logico been paying rent to this institution?
3. Who actually made this arrangement that Tuntex should collect rent from Logico?
4. Has Logico been also paying rent to the Ministry of Housing and Urban Development, to which account of the Government of the Kingdom of Eswatini?
5. How much rentals does Logico pay on a monthly basis?
6. Kindly comment on reports that Logico has been depositing rent to a personal account of a former senior government official.
Based on the fact that Logico was not disclosing the institution that received the rent, the Times SUNDAY wanted to know whether it was possible for the company to deposit the money to a personal account, with this person receiving it on behalf of the government. In response, Geldard said: “Logico has not and never will pay monies into anyone’s personal account for rentals on said properties.” Is there any agreement that Logico signed with government as mentioned by Geldard? Sifiso Khumalo (Indvuna Mashamphu) said he would follow it up if there was an element of truth to it. The government legal representative advised that such agreements were not confidential.
investigation
Manqoba Khumalo, the Minister of Commerce, Industry and Trade, said he was aware of the issue and would only comment on it from an informed position after he had completed an investigation. On August 4, 2011, the Times SUNDAY reported that Tuntex was closing down, leaving over 1 000 people jobless. Tuntex, which had been receiving rent from Logico was established in October 1997, when there was a boom in the world textile market. Tuntex used to operate two factories but one of them had closed down years ago, when the company experienced problems, in 2011. It must be said that the company used to have orders from world reputable European brands like Adidas, Bonton and Dick’s. On November 11, 2017, the Times of Swaziland (Eswatini) reported that government alleged that Tuntex, at some point, enjoyed a nominal rental fee of E50 per year.
Government wanted the 50 year lease entered into with Tuntex Garments (Pty) Ltd cancelled and for the company to vacate the premises within seven days, following a breach of the agreement. The lease was in respect of plot number 764, measuring 63 000 square metres. It is where Tuntex undertook to utilise the land by constructing a manufacturing factory within the premises and manage operations for a period of 50 years. During the course of 1999, government entered into a pre-incorporation written lease agreement where it was represented by Stella Lukhele, the then Minister of Housing and Urban Development, while Tuntex was represented by Yang Te-Sheng. It is understood that government provided the company with a fully serviced land. In an affidavit that was attached to court papers filed by government, Clifford Mamba, the retired Principal Secretary in the Ministry of Housing and Urban Development, explained that at the end of the lease, Tuntex was to hand over the factory and premises back to government.
agreement
Mamba cited clause five of the lease agreement, which stipulated that Tuntex, in the event, for any reason was unable to continue the manufacturing operations as agreed, the lease agreement would lapse. It would become void and the land and premises shall revert to government with all the improvements. Tuntex ratified the pre-incorporation lease agreement by constructing and manufacturing immediately after its incorporation. The former PS told the court that government discovered, in July 2013, that the respondent had ceased all operations, which were taking place within the premises, as per the lease agreement. “By ceasing all operations which were taking place, the lease agreement lapsed and was automatically cancelled. Tuntex also failed to vacate and surrender the keys of the premises, an act that amounted to being in breach of the lease agreement,” according to the court affidavit. It was also stated that despite lawful demands by government, Tuntex had refused and or neglected to surrender the keys and vacate the premises.
premises
“Tuntex’s defiance or refusal to vacate the premises and surrender the keys has left the government with no choice but to approach court for redress,” it was mentioned. In the lease, it was pointed out that Tuntex had expressed an interest in assisting government in its economic endeavours by investing in the expansion of its garment manufacturing enterprise in Eswatini.
Government said the State was also desirous of attracting direct foreign investments (FDI) as will be particularly labour intensive to alleviate the unemployment situation in Eswatini.
Government won the court case against Tuntex. Efforts to reach out to former directors of Tuntex were unsuccessful as their whereabouts could not be traced.
Source: times
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