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Former National Prosecuting Authority (NPA) director Bulelani Ngcuka is facing legal action to pay R6.7m after allegedly giving a personal guarantee for a loan to a company linked to a housing development that allegedly defaulted.
In the claim, filed in the Johannesburg high court on July 22, Passives Funding is seeking judgment against Ngcuka and businessman Marthinus Steyn Fourie after The Housing Hub (THH) special purpose vehicle (SPV) allegedly failed to meet its repayment obligations under a senior funding agreement. Ngcuka and Fourie are directors of the company.
The development was the Mohlakeng Extension 16 housing development on the West Rand. The lender claims Ngcuka and Fourie bound themselves as personal guarantors for portions of the debt should the borrowing company default.
Ngcuka was the first NPA head to be appointed, upon the establishment of the entity in 1998, and resigned in July 2004. He created and led the Directorate of Special Operations, also known as the Scorpions, a highly effective, multidisciplinary elite unit combining investigators, financial analysts and prosecutors.
Ngcuka and Steyn Fourie irrevocably and unconditionally, jointly and severally, undertook with the applicant that whenever THH SPV did not pay any amount when due under or in connection with the senior facility agreement, that they shall immediately on demand pay that amount as if they were the principal obligor … subject to the total aggregate amount recoverable by the applicant from Ngcuka not exceeding R6.7m and Steyn Fourie not exceeding R18.3m
— Affidavit
Passives Funding states that the original funding agreement was concluded in December 2021 when THH SPV secured a R127m loan facility to finance construction, engineering and development work on the Mohlakeng housing project.
It says the funding package later grew substantially through two amendments to the facility agreement. An additional R35m facility was approved in September 2023, and a further R20m was advanced in May 2024.
The affidavit states that Ngcuka and Fourie expressly agreed to become liable if the borrower failed to honour its repayment obligations.
“Ngcuka and Steyn Fourie irrevocably and unconditionally, jointly and severally, undertook with the applicant that whenever THH SPV did not pay any amount when due under or in connection with the senior facility agreement, that they shall immediately on demand pay that amount as if they were the principal obligor … subject to the total aggregate amount recoverable by the applicant from Ngcuka not exceeding R6.7m and Steyn Fourie not exceeding R18.3m,” reads the affidavit.
The application alleges that the project company subsequently fell into financial distress and failed to make required capital repayments, and also failed to pay accrued interest in accordance with the repayment schedule.
Though one of the facilities was eventually settled, the lender says the remaining obligations were left unpaid.
Passives Funding says the defaults entitled it to invoke provisions contained in the financing agreement allowing it to accelerate repayment of the outstanding debt.
Rather than claim only overdue instalments, the lender says it declared the entire balance immediately due.
The court papers show that the overall indebtedness had climbed substantially.
It claims that by June 30, more than R259m was outstanding.
But the lender confirms that Ngcuka’s liability is capped at R6.7m while Fourie’s extends to R18.3m.
The accompanying notice of motion asks the high court to grant judgment against both men and to order them to pay the legal costs of the application.
Ngcuka did not respond to several calls and questions sent to him about the claim.
Mduduzi Nonyane
www.sundaytimes.timeslive.co.za
