Oct 10, 2010 12:00 AM

http://www.timeslive.co.za/business/article697680.ece/Imperial-kickback-case-set-for-trial

More than R200-million in unauthorised loans will feature, writes Kim Hawkey

A senior banker who allegedly dished out over R200-million in unauthorised bank loans to property developers in exchange for kickbacks almost a decade ago is finally being brought to book.

Eben Kotze, the former head of property finance at Imperial Bank, a division of the Nedbank Group, faces a litany of charges - including fraud, corruption, money-laundering and perjury - relating to his three years in that position.

The case against him is set out in a 140-page indictment that will form the basis of his criminal trial in the High Court in Johannesburg next year.

Many of the 50 charges against the 49-year-old relate to him allegedly using his position to award multimillion-rand loans to developers who would not otherwise qualify for them, in exchange for bribes. In addition, Kotze is said to have taken profits from some of the property deals.

Through a variety of business vehicles, including close corporations and trusts, Kotze allegedly bought and immediately sold properties to developers for exorbitant profits, often double or in one case three times the original purchase price.

He is also accused of providing other "favours" for developers, including concealing from the bank that they were not paying deposits for the properties, wrongfully transferring amounts between loan accounts, and fast-tracking progress payments from these accounts, knowing that in many of these cases the claims were fictitious.

In exchange for these favours, he allegedly demanded payments of hundreds of thousands of rands. In one case he claimed R495000 - which was used as a deposit on a house for his mother.

Many instances are mentioned in the indictment, including the more than R3-million that one developer allegedly paid Kotze either in cash or indirectly by, for example, contributing towards properties purchased, including in the Pecanwood golf estate near Hartbeespoort Dam.

In addition, Kotze allegedly received payment in kind, in the form of building materials for his and his mother's homes, as well as renovations to his home and his church, both in Roodepoort, west of Johannesburg.

One of the developers implicated, Hendrik Lubbe, pleaded guilty to several charges including fraud and corruption in 2007. He was sentenced to three years' correctional supervision and received a five-year suspended prison sentence. National Prosecuting Authority spokesman Mthunzi Mhaga confirmed that no one else had been charged in connection with the matter.

Other developers Kotze is alleged to have "conspired" with are believed to have turned state witness. Mhaga said he was unable to comment on this.

Kotze, who was arrested in September 2007 and is currently out on R1-million bail, was bust after two of these developers told the bank they had been paying him kickbacks after their relationship soured.

"At the time, we had no idea," Piet Swanepoel, formerly Imperial Bank's property finance head and now part of Nedbank Business Banking, told the Sunday Times this week. Swanepoel said that Kotze, who he described as "seriously intelligent", was suspended in August 2004 and dismissed in February 2005 following a forensic investigation by PricewaterhouseCoopers.

Swanepoel said it was "very difficult" to quantify the bank's loss as a result of Kotze's actions, but added that it had largely been offset by foreclosing on the mortgage bonds registered over the properties.

"The luck we got was the property market at the time - people were paying crazy amounts at the time, but the risk he exposed the bank to, if it had been in circumstances like now, it would've been very different," Swanepoel said.

The matter was in court on Monday, when it was postponed for trial in April next year. It is expected to sit for the entire court term.

Kotze, who is a director of several companies and who lives in Strand in the Western Cape, has not yet pleaded, but he told the Sunday Times this week that he intended to plead not guilty, and the details of his case would emerge during the trial.