Former Scorpions boss Bulelani Ngcuka’s Amabubesi Investments has beefed up its property portfolio via a R100m empowerment deal with auction and valuation group Asset Alliance.

Amabubesi is an investment company and owns stakes in listed and unlisted companies including Enaleni Pharmaceuticals, food group Lancewood Cheese, construction group Basil Read, GrowthPoint Properties and Pinnacle Technology Holdings. Ngcuka, originally from the Eastern Cape, is chairman of Amabubesi and its chief executive is another Eastern Caper, Sango Ntsaluba, founder of accounting and consulting firm Sizwe Ntsaluba VSP.

Ngcuka has made good on his word to give something back to the province. Amabubesi already has business interests in the Eastern Cape including a 36% stake in information technology company ELCB; a housing development and tomato farming projects in East London; an agricultural development near his home town of Middledrift; a R1,1bn golf estate on the Garden Route; and the province’s biggest shopping complex, under construction outside Jeffrey’s Bay.

Asset Alliance shareholders have sold 20% in the business to Amabubesi and 5% to Bamaka Investments – an empowerment vehicle for Asset Alliance’s existing black management.

The new partnership will see Amabubesi appoint two nonexecutive directors to Asset Alliance’s board, which effectively increases black board representation to 57%. Ntsaluba will be the group’s new chairman.

Asset Alliance chief executive officer Rael Levitt said the deal was the first of its kind in the South African auction industry where management and existing staff had taken a stake in the business. He said both empowerment partners would play a key role in growing the business.

Levitt said the auction and valuation industries were worth about R10bn a year and he expected substantial growth driven by the public sector. He said that while the group had experienced strong organic and acquisitive growth over the past three years, it expected huge opportunities relating to the privatisation of state assets and work relating to various government departments.

“We have always believed that auctions are a first choice method of asset disposal in the public sector. Auctions represent the best method for government to sell off assets because it’s open and transparent,” he said.

Ntsaluba echoed Levitt’s sentiment that the auction industry was poised for growth, saying: “There is still a lot more business that could be done through auctions but people do not know it, even though this is the most transparent way to do business.”

The Eastern Cape stood to benefit from the empowerment deal as Amabubesi was planning to open an office in the Eastern Cape in the near future. “We do not believe opportunities should be concentrated in the Johannesburg area. We want to take them to other provinces as well, not just the Eastern Cape.”