O’Sullivan offers aid in Huddle Park probe
• Suspect events in sale of Johannesburg’s potentially high-value estate to Investec Property to be examined
The Johannesburg mayoral commission investigating the Huddle property scandal has received an offer from Paul O’Sullivan’s forensics company to assist on a pro-bono basis in the probe into the alleged multibillion rand land sale fraud.
The investigation will examine the many outlandish, obscure and suspicious developments that have marked the sale of the city’s potentially highvalue estate at Huddle Park to Investec Property.
“The extremely low price, dearth of other bidders, questionable methods used for the … tendering process, fraudulent valuation processes and other suspicious activity all call the transaction into serious question,” a city spokesman said.
Investec is already marketing stands at the development site, The Neighbourhood.
Meanwhile, losing tenderer Asibambani Consortium, headed by Johannesburg businessman Bill Kirk, is suing the city for R1.9bn in civil damages alleging a fraudulent and possibly corrupt property transaction.
The sought-after property near Johannesburg’s Bedfordview suburb was offered for sale by tender by the city in 2004, attracting a number of bids, shortlisted to four. In the past 14 years the transaction has degenerated into a corruption-ridden horse trade.
Huddle Park is best known to Johannesburgers as a sprawling 250ha public golf course complex in the vicinity of high-end golf courses such as Houghton Country Club, Glendower as well as Royal Johannesburg and Kensington Golf Club. The upper -middle-class area about halfway between Johannesburg city and OR Tambo International Airport is essentially a tract of wetlands with a 53ha area suitable for residential and business development.
The original tender document called for the inclusion of two golf courses — one for private membership and the other open to the public. The tender was terminated after Investec’s successful Islandsite consortium failed to uphold the conditions of use of the land.
A new sale was concluded in March 2011 and the land was sold to Tiyani, an Investec company created for the purpose.
“The company that bought the 53ha is no longer called Tiyani,” notes architect Marian Laserson, “although some of the partners are remnants of Tiyani. For the sake of clarity it is recognised that Investec is the new owner. Investec has created a company called TP Hentiq 6463 Pty Ltd which appears on title deed no T73146/2011.”
A participant close to the deal said there appeared to have been only one bidder, “probably because the sale’s only publicity was an advertisement headlined ‘Request for expressions of interest relating to certain properties owned by the City of Johannesburg’.” The notice was not identified as a tender, nor was Huddle Park mentioned.
Investec’s plan to establish a residential area and commercial centre, to be called The Neighbourhood, has the local community up in arms. They claim the area is already overserved with living and business space and its sparse road facilities are inadequate for handling more traffic.
A residents’ organisation, Head (Huddle Park and Environs Anti-Degradation) League, chaired by attorney Raymond Druker, is fighting Investec’s plans to develop a shopping, residential and office complex.
The Head League has briefed counsel to apply for a review of the transaction. If it is granted it will allow dissenters more time to oppose the development.
As the legal battle plays out, the political element of the confrontation appears to deepen. The issue started in 2004 when the ANC ran Johannesburg under mayor Amos Masondo, who was succeeded by Parks Tau. Druker had submitted two requests for documentation under the Promotion of Access to Information Act. Both were ignored, he says.
Tau was succeeded by Amos Masondo, also of the ANC, and then came Herman Mashaba when the DA formed a coalition to oust the ANC in the 2016 municipal election. The ANC’s defeat did not make it any easier for the Huddle Park dissenters to fight the disputed award of the land to Investec. Access to the council’s records of the sale was extremely difficult, if not impossible in some cases. Kirk had to pressure the public protector to force the release of information.
Researchers have had to take extraordinary measures against the city to gain access to records that should be public.
The question has repeatedly been asked why the DA council was taking such lengths to shut out legitimate inquirers. Why is a DA council so intent on defending, even concealing, evidence on behalf of a past ANC council? “Surely,” says one dissenter, “it would make more sense to open the hoard of evidence and let the ANC council members have it good and proper.
“This smacks of collusion between the past and present city administrations.”
A major point of contention is in the second transaction in 2011, after the first was cancelled.
The question most persistently asked is why Investec was apparently the only bidder in the second transaction and able to buy the property at a fire-sale price. The answer seems to be “because no one else knew about it”, Druker said. Various city officials insist that bids were called for in a January 21 2011 “tender notice” in the press.
The devil in the detail says differently. The statement does not bear scrutiny.
Dissenters maintain that the advertisement referred to was not a tender; it was simply a “request for expressions of interest” relating to certain unidentified properties owned by the city and zoned residential, commercial and mixed use. As Druker points out, Huddle Park is zoned public open space. “This advertisement had no relevance to land zoned public open space and did not relate to Huddle Park at all.” Consequently, it would hold no interest for prospective buyers of open public space.
The question posed by interested parties that might have missed the boat is whether the notice was a red herring to mislead potential buyers.
The job of placing a value on the Huddle Park property was entrusted to a city council internal cadet valuer, Thapelo Mmusinyane. His valuation of R40m plus VAT coincided with Investec’s later bid. Consequent revelations disclosed that the land’s extremely low value had been calculated by comparing it with a shanty squatter camp, Diepsloot, on the other side of the city. Mmusinyane found Diepsloot township similar enough to Huddle Park township to use as a value reference.
Registered valuator George Ramovha confirmed his findings. In a later hearing both were found guilty of improper conduct. The intern was not penalised, while Ramovha received a suspended sentence.
The damage had been done however, and the value of the Huddle Park land was officially noted at the greatly discounted price. Investec was the only tenderer and its bid was close to the evaluators’ erroneous calculations. Its R45.6m purchase price coincided with the cadet’s estimation of R40m plus VAT.
“This amounts to a discount of approximately 89.5% to the value of land (at Senderwood suburb) a few minutes’ walk away,” Druker wrote in a 2013 Head League communication.
“As the value was under R50m it was not subject to the rigorous interrogation required in terms of the Municipal Finance Management Act,” a city spokesman said. Johannesburg Property Company MD Helen Botes is on record as saying that in terms of the act due legal and policy requirements were fulfilled in the process of the sale of the property.
In a letter to the city manager, she wrote: “This includes the issue of a public notice for interested parties on January 21 2011 and specification, evaluation and adjudication of bids in accordance with the supply chain management policy for land….
“The land was sold at a price not lower than the market value for unzoned, unserviced bulk land and as determined by a registered valuer. Comparisons to zoned, serviced small adjoining residential erven are incorrect,” Botes wrote.
Druker said questions had to be asked of how anyone could “bone fide regard Huddle Park as remotely comparable [with Diepsloot]”, and O’Sullivan believes Investec has reasonable grounds to know that the deal was not entirely on the level.
ACCESS TO THE COUNCIL’S RECORDS OF THE SALE WAS EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE