A R13.5m property owned by former train boss Lucky Montana was partly funded with money that can be traced back to a beneficiary of dodgy contracts worth R4bn from the Passenger Rail Agency of South Africa (Prasa).

News24 can today reveal how money from controversial Pretoria tender mogul Mario Ferreira found its way to his former business partner before the latter used it to buy a sprawling property of more than 6 000m² in the sought-after Johannesburg suburb of Hurlingham.

The property was then registered to Montana’s name, even though it was paid for by third-parties linked to Ferreira.

READ Prasa: European rail companies at odds over payments to Montana’s ‘friend’

This is the clearest indication to date that Montana may have scored suspicious benefits worth millions of rand linked to contracts of about R4bn awarded by Prasa to Siyangena Technologies, a subsidiary of Ferreira’s TMM Holdings group.

Siyangena and Prasa were harshly criticised in former Public Protector Thuli Madonsela’s 2015 report on the embattled state-owned entity. Siyangena was appointed to install access gates, security cameras and other related products at Prasa train stations across the country.

Most of the affected parties strongly denied that the property transaction and related dealings amounted to anything irregular.

Montana did not address any of the queries about the property, but instead fired off an angry SMS in which he accused News24 of racism.

Appearing before a parliamentary inquiry into state capture earlier this year, Montana insisted that he has never been involved in “corrupt activities”.

Montana provided MPs with considerable detail about his other property dealings following earlier media reports, but he failed to mention the Hurlingham transaction.

News24’s investigation has found that Montana now stands to pocket R20m in profit from selling a property that was bought on his behalf by third-parties linked to Ferreira.

Enter the lawyer

According to records at the deeds office, a huge property of 6 645m² in Hurlingham’s tree-lined Montrose Avenue was transferred to Montana’s name in July 2015. Property records don’t reflect a bond registered with any home loan institutions, which means the R13.5m purchase price was covered with a cash transaction.

News24 established that prior to the property being registered in Montana’s name, separate payments of R2m and R11.5m were transferred from third parties to conclude the deal.

READ: Prasa’s Spanish supplier paid R75m ‘consulting’ fees to Montana’s ‘friend’

One such third party was Pretoria lawyer Riaan van der Walt’s Precise Trade and Invest 02, a shelf company which in March 2015 transferred R2m from an Investec account to the R13.5m Hurlingham transaction.

Van Der Walt’s law firm, Loubser Van Der Walt Incorporated, has done legal work for Ferreira and the TMM Holdings group since 2004, according to court papers filed in a legal battle between Prasa and Siyangena.

Van Der Walt is the same lawyer who in 2014 purchased a property in Parkwood, Johannesburg from Montana at such a high price that it left local estate agents stunned. Van Der Walt conducted that transaction through Precise Trade and Invest.

Van Der Walt, who has strongly denied that he paid an inflated price for the Parkwood property, explained that Montana instructed Precise Trade and Invest “to pay R2m from the proceeds of the [Parkwood] sale towards the transferring attorneys of the Hurlingham property”.

In other words, of the R6.8m that Precise Trade and Invest paid for Montana’s Parkwood home, R2m was channelled into the Hurlingham transaction.

Van Der Walt insists that Precise Trade and Invest is an above-board property investment company, and that he bought the Parkwood property at a price that made good business sense.

But he has provided radically differing accounts with regards to how he met Montana.

When Rapport first reported on the Parkwood transaction on 2015, Van Der Walt claimed that he randomly drove past Montana’s house one day and saw a for-sale sign outside the property.

In his affidavit in the Siyangena court matter, however, Van Der Walt changed his tune. He now claimed that it was none other than Ferreira who had introduced him to Montana.

“Mr Ferreira phoned me and indicated that a one Mr Lucky Montana enquired from him whether he knows an attorney who will be able to assist him in property related matters. Mr Ferreira advised me that he gave my number to Mr Montana and that Mr Montana might call me for legal advice,” reads Van Der Walt’s affidavit.

That was the genesis of the property dealings between Montana and Van Der Walt, at least according to the latter’s affidavit.

But in the affidavit, Van Der Walt for some reason omitted the detail about how he paid the R2m into Montana’s Hurlingham property, despite providing a detailed account of other property transactions involving himself and Montana.

“I understood from Mr Montana that he wanted to use the proceeds of the sale of his [Parkwood] property to invest in other properties which were, inter alia, a property identified as a guest house in Pretoria and a property in Sandhurst. I will deal with both these properties hereinafter,” reads the affidavit.

Rapport previously revealed how Precise Trade and Invest paid R25m in cash for the Pretoria and Sandhurst properties, while it was Montana who took possession of the properties’ keys after the deals were concluded.

The R11.5m ‘investment’

In mid-May of 2015, two months after Van Der Walt had made the payment of R2m, a company called “Midtownbrace” transferred a whopping R11.5m from another Investec account to the Hurlingham property deal.

But according to deeds office records, the property was formally transferred to Montana in July 2015, not to Midtownbrace or Precise Trade and Invest.

South African company records do not reflect a company called “Midtownbrace” registered in SA, so we expanded our search.

We eventually found “Midtownbrace” on Botswana’s registry of companies.

According to its registration documents at Botswana’s Companies and Intellectual Property Authority (CIPA), Midtownbrace’s directors are South African businessman Andre Wagner and his father, Johan. Both are based in Newcastle, KwaZulu-Natal.

News24 managed to track down Andre to find out why his company, Midtownbrace, would advance R11.5m toward helping Montana acquire a property.

According to Wagner, he previously owned shares in a company called Wetlands Country Retreat, which in turn owns a game farm and a hunting lodge near the town of Wakkerstroom in Mpumalanga.

Wagner initially told News24 that he sold his shares in Wetlands to “TMM Holdings”, the parent company of the Prasa contractor Siyangena Technologies.

He then “re-invested” the proceeds of these shares in a proposed property development together with Montana, Wagner explained. We’ll get to this “property development” a little later.

Wagner denied any impropriety, but his admission was startling – for the first time, News24 could directly link money that had originated from Ferreira or one of his associated companies to a property deal involving Montana.

“I vehemently deny any unfounded allegations and assumptions of any untoward conduct from my side in this business transaction. My conduct was at all times bona fide and lawful with all decisions taken based on experience and sound business principals,” said Wagner.

Ferreira also strongly denied any wrongdoing.

“To insinuate that TMM Holdings (Pty) Ltd had supposedly laundered money through Mr Wagner and/or Mr Van Der Walt, in order to corruptly gratify Mr Montana as a ‘kickback’ for the contracts Siyangena Technologies (Pty) Ltd had secured from Prasa is vehemently denied by our clients,” Ferreira said through his lawyers at Van Dyk Oosthuizen Incorporated.

Share of the pie

News24 obtained the shareholding documents for Wetlands Country Retreat to verify exactly how its shares were disbursed or moved.

It confirmed Wagner’s claim that he had sold his shares, but the exact details differed somewhat from his original account.

According to Wetlands’ register of members’ share accounts, a company called H&F Oudehoutdraai initially owned 80% of the shares in Wetlands. H&F Oudehoutdraai’s two directors are Wagner and his brother-in-law, Louis Beukes.

In 2014, a year before the Hurlingham property transaction was concluded, 60% of Wetlands’ shares were transferred from H&F Oudehoutdraai to Triple Trade and Invest 04, a shelf company of which Ferreira and his son, Mario jnr, are now the only directors.  

Van Der Walt, the lawyer who first bought Montana’s Parkwood home before paying R2m toward the Hurlingham transaction, was also a director of Triple Trade and Invest at the time. He resigned from the company in 2017, according to company records.

Ferreira’s Triple Trade and Invest later acquired a further 20% of Wetlands’ shares.

Wagner’s Midtownbrace, meanwhile, acquired a 8% stake in Wetlands in March 2014. This 8% stake was later bought by Triple Trade and Invest, according to a previous auditor of Wetlands.

It was with the proceeds of these share transfers that Wagner was able to fund, at least partly, the R11.5m “investment” that his company, Midtownbrace, would later push into the “property development” deal with Montana, according to Wagner.

It is not clear how much of the R11.5m was made up of Wagner’s profits from selling his Wetlands shares to Ferreira. He did not divulge this detail.

“For extra clarity I confirm part of the proceeds [from selling the Wetlands shares] were invested in the [Hurlingham] property,” was all Wagner was willing to say in this regard.

Ferreira and Ferreira jnr, speaking through their lawyers, denied that they had any knowledge of what Wagner did after he sold his shares in Wetlands.

“The utilisation of the proceeds arising from the sale of Mr Wagner’s Wetlands shares does not fall within our clients’ knowledge,” Van Dyk Oosthuizen Inc said in a written response.

“Any allegation, innuendo or imputation that our clients and/or their companies are associated with the ‘property development’ venture between Mr Wagner, Mr Van Der Walt and Mr Lucky Montana is a far cry from the truth, unfounded and misleading,” the firm added.

A ‘development’ that never was

To justify why Midtownbrace pushed R11.5m into a property now owned by Montana, Wagner claimed that he and Montana intended to “develop” the Hurlingham property and share the profits from such a venture.

Wagner said that it was Van Der Walt who had originally introduced him to Montana. Van Der Walt confirmed this, though he denies having been involved in the property development in any other way.

Wagner also provided News24 with a memorandum of agreement (MOA) signed by himself and Montana in April 2015. The MOA is surprisingly scant in detail for a document that forms the legal basis of a R11.5m investment.

Another baffling aspect of the dealings between Wagner and Montana is the extent to which Wagner seemingly allowed for the MOA’s stipulations to be cast aside, apparently to his own detriment.

According to the document, the two parties intended to form a “joint venture” for the “development”. It makes no mention of what kind of structure or units the duo intended to build.

To match the R11.5m Wagner had put into the scheme, Montana was supposed to cover the “development costs of R8.1m”, according to the MOA.

These “development costs”, together with the R2m deposit paid by Van Der Walt’s shelf company and the transfer, registration and ancillary costs supposedly put forward by Montana, would have ensured that each party invested exactly R11.5m in the venture.

But there was never any “development”.

The MOA stipulates that “the development must be finalized within 3 (three) years from signing of this Agreement”.

Seeing as it was signed in April 2015, the project should have been completed by now. However, when News24 recently visited the property, we found only a derelict and abandoned old house on a large parcel of land.

Asked why the development was never concluded or why he never took legal action against Montana, Wagner cryptically explained that his company had “reached an agreement with Mr Montana through his lawyers prior to the period expiring”.

However, this was not what Wagner originally told News24 during a meeting in February.

He then maintained that he had lost all the money that he invested in the “development” and that he did consider taking legal action. He even provided us with the name of a Pretoria advocate who supposedly received instruction from him in this regard.

Another key stipulation of the MOA was also transgressed, again to Wagner’s apparent detriment.

According to the MOA, “the parties agree[d] that as security for the capital investment [of R11.5m] already invested by Midtownbrace, a covering mortgage bond will be registered over the property in the amount of R11.5m plus R500 000 towards costs, after the property has been duly registered in the name of Montana”.

But, as mentioned earlier, there are no bonds registered to the property.

Asked why the covering bond was never registered at the deeds office, Wagner replied: “A signed and binding Covering Mortgage bond is in the company’s [Midtownbrace] possession, and can be lodged at any time – therefore sufficient security exists.”

News24 asked for a copy of the covering mortgage, but Wagner did not provide us with one.

Montana’s R20m profit prospect

Montana seems to have been much luckier in his dealings with Wagner and Van Der Walt. He could earn about R20m from a property that, for all intents and purposes, was bought for him by third parties.

Property records show that he already disposed of a portion of the property in August 2016 at a price of R5.25m.

A “for sale” sign was recently placed outside the property. Asked what the owner’s asking price was, the estate agent said that the remaining two portions could be bought together for R15m.

When approached for comment, Montana’s response was a far cry from his smooth demeanour and soft-spoken answers in Parliament earlier this year.

He accused “the racist News24” of “publishing lies” about him.

“I urge you to write more crap and Lucky Montana will remain standing,” he wrote in an SMS.

“Those feeding you the stuff and giving you money to write are becoming desperate by the day. You should be ashamed of yourself but like every dog, you will have your day. Stop writing to me,” Montana fumed.

At his appearance in Parliament, Montana failed to mention the Hurlingham property when MPs asked him about his property dealings.

“I obtained a bond facility of R10.5m from ABSA and another small one from FNB for my properties. My monthly bond repayment was R97 000 covering 5 properties I owned at the time,” Montana claimed under oath.

He added that his relationship with Van Der Walt “had nothing to do with any [Prasa] contractor”.

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