Auction threat in spotlight
The Enoch Mgijima Local Municipality (EMLM) applied for a rule nisi for a stay of execution pending the outcome of a court appearance yesterday to prevent the sale of municipal assets.
This was after the local authority challenged the court order to auction some of its assets to pay Siyahlutha Developers R5.9m for RDP houses built in 2005 on behalf of the former Lukhanji Municipality.
It was unclear at the time of going to print whether EMLM would succeed in preventing the auction from taking place or if the Grahamstown High Court would rule in favour of Siyahlutha.
EMLM municipal manager (MM) Chris Magwangqana said during a special meeting on Monday that Siyahlutha and the municipality’s attorneys had agreed last year to resolve the matter through arbitration which took place in May this year.
“Soon after the end of the arbitration, the legal service raised concerns with the attorneys about the manner in which the proceedings were conducted. “The arbitrator ruled in favour of Siyahlutha and the company applied to have the award turned into a court order which was subsequently granted.
“After changing our legal representatives who did not handle the matter with the urgency it deserved, we challenged the court order last week and awaited the outcome of the court on Thursday.
“Our attorney sent Siyahlutha’s attorneys the documentation on the matter but, they are yet to indicate their stance.
“They did contact us to say they no longer requested R5.9m, but the initial debt of R1.7m. We did everything to avoid further auction of assets and embarrassment,” he said.
UDM councillor Mthuthuzeli Hokolo said the municipality kept the issue of the auction from council like they did with Milowo which was awarded a writ to municipal assets worth R21m.
“How long have you known about this? You only now inform council. You have made the same mistake again.
“We need the MM to be transparent and bring all important matters to council before making decisions that will affect residents,” Hokolo said.
United Front councillor Aaron Mhlontlo said he was disappointed by the MM’s “scanty report” about the Siyahlutha matter and the municipality had set a bad precedent of working with “criminals and air-headed crooks whose intent was to loot municipal money and cause political and administrative distraction”.
DA councillor Chris de Wet advised that the Magwangqana-led administration look into pending legal cases the municipality was involved in so that council and the municipality as a whole could prepare for what was next to come from other creditors who were owed money.