Joburg faces huge claim for dam­ages

The Star Early Edition - - FRONT PAGE - ROY COKAYNE

A R1.94 bil­lion civil dam­ages claim has been lodged against the City of Joburg (CoJ) re­lat­ing to an al­legedly irregular, fraud­u­lent and pos­si­bly cor­rupt prop­erty trans­ac­tion that in­volved two for­mer may­ors, sev­eral high-rank­ing city of­fi­cials, two large banks and a prop­erty de­vel­oper.

The CoJ has given no­tice of its in­ten­tion to de­fend the claim.

A crim­i­nal charge was laid in April re­lat­ing to the al­leged ir­reg­u­lar­i­ties and un­law­ful man­ner of the dis­posal of por­tions of the Hud­dle Park prop­erty, and it was fur­ther al­leged that per­jury, fraud, forgery and ut­ter­ing were com­mit­ted dur­ing the dis­posal process.

The crim­i­nal case was opened at Hill­brow po­lice sta­tion in Joburg and then trans­ferred in April to the Direc­torate for Pri­or­ity Crime In­ves­ti­ga­tion (Hawks).

The essence of the crim­i­nal charges is that the CoJ dis­posed of an as­set of the state in an al­legedly irregular, un­law­ful and fraud­u­lent man­ner to a non-com­pli­ant ten­derer, which caused prej­u­dice to both the city’s ratepay­ers and other short­listed ten­der­ers.

Com­plaints were lodged with sev­eral en­ti­ties, in­clud­ing the Spe­cial In­ves­ti­gat­ing Unit and the Jo­han­nes­burg Com­mer­cial Crime Unit, and a re­view ap­pli­ca­tion was lodged with the CoJ, which was sub­se­quently with­drawn.

Two pro­cesses were un­der­taken for the dis­posal of por­tions of the Hud­dle Park prop­erty.

The first, ini­ti­ated in Septem­ber 2004, was ter­mi­nated in 2009.

A bank-led con­sor­tium was the only en­tity to re­spond dur­ing the sec­ond process, which re­sulted in it ac­quir­ing 52.7 hectares of the Hud­dle Park site for R46 mil­lion in June 2011.

A so-called in­de­pen­dent val­u­a­tion ob­tained by the Jo­han­nes­burg Prop­erty Com­pany (JPC) for the 52.7ha of Hud­dle Park was R40.052 mil­lion.

An in­ves­ti­ga­tion by Busi­ness Re­port re­vealed this val­u­a­tion was done by Thapelo Mmusinyane, an in­ter­nal can­di­date val­uer at the JPC, and “checked and cer­ti­fied” by Ge­orge Ramovha, a reg­is­tered pro­fes­sional val­uer. Their val­u­a­tion com­pared the site to a prop­erty ad­ja­cent to the Diep­sloot squat­ter camp.

A com­plaint was lodged against Mmusinyane and Ramovha at the SA Coun­cil for the Prop­erty Valuers Pro­fes­sion (SACVPV) in Novem­ber 2012. Both were found guilty at an SACVPV dis­ci­plinary hear­ing last Novem­ber of im­proper con­duct.

Al­le­ga­tions of fraud in prop­erty trans­ac­tion

A R1.94 BIL­LION civil dam­ages claim has been lodged against the City of Jo­han­nes­burg (CoJ) re­lated to an al­legedly irregular, fraud­u­lent and pos­si­bly cor­rupt prop­erty trans­ac­tion that in­volved two for­mer may­ors, sev­eral high-rank­ing city of­fi­cials, two banks and a black-owned prop­erty group.

The CoJ has given no­tice of its in­ten­tion to de­fend the claim.

A crim­i­nal charge was also laid in April this year re­lated to the al­leged ir­reg­u­lar­i­ties and un­law­ful man­ner in the dis­posal of por­tions of Hud­dle Park prop­erty when it was fur­ther al­leged fraud, forgery and ut­ter­ing, and per­jury was com­mit­ted dur­ing the dis­posal process.

The crim­i­nal case opened at the Hill­brow po­lice sta­tion in Jo­han­nes­burg was trans­ferred in April this year to the Direc­torate For Pri­or­ity Crime In­ves­ti­ga­tion (DPCI), com­monly known as the Hawks, for in­ves­ti­ga­tion.

Bri­gadier Hang­wani Mu­laudzi con­firmed last week the al­leged ten­der fraud case was un­der in­ves­ti­ga­tion at the Se­ri­ous Eco­nomic Of­fences Unit of the DPCI, but was still at its ini­tial stage of in­ves­ti­ga­tion.

The essence of the crim­i­nal charges is that the CoJ dis­posed of an as­set of the state in an al­legedly irregular, un­law­ful and fraud­u­lent man­ner to a non com­pli­ant ten­derer, which caused prej­u­dice to both the city’s ratepay­ers and other short listed ten­der­ers.

Com­plaints were lodged pre­vi­ously by Kirk with sev­eral en­ti­ties, in­clud­ing the spe­cial in­ves­ti­ga­tion unit (SIU) and Jo­han­nes­burg com­mer­cial crime, and a re­view ap­pli­ca­tion lodged with the CoJ, which was with­drawn when the CoJ de­manded R100 000 se­cu­rity from Kirk.

A com­plaint was also lodged with the Pub­lic Pro­tec­tor in Novem­ber 2011, but to date it has not is­sued any re­port on the in­ves­ti­ga­tion of the com­plaint.

Oupa Se­galwe, the se­nior man­ager com­mu­ni­ca­tions at the Pub­lic Pro­tec­tor, said this week the in­ves­ti­ga­tion of the com­plaint was “pend­ing” and was un­able to pro­vide any in­di­ca­tion of when it was likely to be com­pleted. He said its fi­nal­i­sa­tion had taken so long “due to ca­pac­ity con­straints as the of­fice has a back­log” of com­plaints.

The civil dam­ages claim and crim­i­nal charges were laid by Bill Kirk, whose com­pany Associated Golf De­vel­op­ments submitted a bid for and on be­half of the Asi­bam­bane Con­sor­tium for the Hud­dle Park prop­erty re­de­vel­op­ment.

In terms of an af­fi­davit Kirk submitted in sup­port of the crim­i­nal charges that were laid, the com­plainant named 23 peo­ple or com­pa­nies who, ac­cord­ing to him, were in­volved in the al­legedly irregular and un­law­ful award of the ten­der for dis­posal and re­de­vel­op­ment of 183 hectares of prime land in Hud­dle Park.

Busi­ness Re­port has a copy of the af­fi­davit, but has been ad­vised on le­gal grounds not to dis­close the iden­tify of the im­pli­cated peo­ple and com­pa­nies at this stage. The al­leged ir­reg­u­lar­i­ties and crim­i­nal of­fences re­late to two disposals for the sale and re­de­vel­op­ment of a por­tion of Hud­dle Park that have been in­ves­ti­gated by Busi­ness Re­port over the past five years.

The first ten­der was ter­mi­nated. An In­vestec-led con­sor­tium was the only bid­der dur­ing the sec­ond dis­posal process, which re­sulted in it ac­quir­ing the Hud­dle Park site for R46 mil­lion, in­clud­ing VAT, in June 2011.

The Asi­bam­bane con­sor­tium, one of the short-listed bid­ders, dis­banded af­ter it lost the ten­der. Asi­bam­bane mem­bers ceded and as­signed all their rights and claims they had in the mat­ter to Kirk.

It is al­leged the price paid by an In­vestec-led con­sor­tium was sig­nif­i­cantly less than the mar­ket val­u­a­tion for the prop­erty.

Es­ti­mate

Brian Mahlangu, the then spokesper­son for the Jo­han­nes­burg Prop­erty Com­pany (JPC), told Busi­ness Re­port in 2012 the price paid by an In­vestec-led con­sor­tium was in line with “the in­de­pen­dent val­u­a­tors es­ti­mate”.

Sub­se­quent Busi­ness Re­port in­ves­ti­ga­tions re­vealed the val­u­a­tion was con­ducted by Thapelo Mmusinyane, an in­ter­nal can­di­date val­uer at the JPC, and “checked and cer­ti­fied” by pro­fes­sional reg­is­tered val­uer Ge­orge Ramovha.

How­ever, an ad­ja­cent site to the Diep­sloot squat­ter camp was used for com­par­a­tive pur­poses to de­ter­mine the value of the Hud­dle Park site.

This re­sulted in Kirk lodg­ing a com­plaint with the SA Coun­cil for the Prop­erty Valuers Pro­fes­sion (SACPVP) against Mmusinyane and Ramovha in Novem­ber 2012.

Both of them were found guilty dur­ing a SACPVP dis­ci­plinary hear­ing in Novem­ber last year of im­proper con­duct. Mmusinyane in De­cem­ber re­ceived a cau­tion while Ramovha was fined R5 000, with the en­tire fine sus­pended for five years. roy.cokayne@inl.co.za See Page 19

Photo: Itumeleng English

Sales of­fice for The Neigh­bour­hood, an In­vestec mixed use prop­erty de­vel­op­ment at the Hud­dle Park golf course in Links­field, Jo­han­nes­burg. The City of Jo­han­nes­burg says a claim of R1.9bn from Bill Kirk is with­out merit.

Bri­gadier Hang­wani Mu­laudzi con­firmed last week the al­leged ten­der fraud case was un­der in­ves­ti­ga­tion.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.