City spends R576 713 to recover R410 000

MORE than 10 years after the city council entered into two illegal contracts worth more than R6 million, it has spent more on legal fees than it has recouped from the parties involved.

More than R500 000 has been spent in legal fees in the Jewellery City and Full Swing Trading matters. But it has only recovered R410 000 in the Jewellery City case to date.

Legal proceedings against the parties involved in both matters, including former city manager Wallace Mgoqi, started more than eight years ago, but the lack of a paper trail proving wrongdoing against those being sued, and the long wait for court dates, have hindered bringing the matters to trial.

The city council has spent R309713 in legal fees on the Jewellery City matter and a further R267000 on the Full Swing Trading case. The fraudulent contracts first came to light when the DA took office in the city council in 2006 and the Auditor- General flagged the irregular expenditure.

For years the city council battled to track down Thabo Mokwena, the man hired without a tender in 2005, to develop the R425m Jewellery City project.

The city council paid Mokwena R1 200 an hour – a total of R4.5m for just four months of work.

The city council finally obtained a default judgment against Mokwena for R2.6m in 2012.

Yesterday, a city council legal adviser told the municipal public accounts committee ( MPAC) that Mokwena was repaying the money as per the court agreement.

He was ordered to pay the city council R10 000 a month for five years, from April 1 last year.

In addition to these monthly payments, he agreed to pay R100 000 every six months for five years as of June 1 last year.

In 2010, Mokwena’s name once again made news when he was hired by Deputy Speaker in the National Assembly Nomaindia Mfeketo as an adviser.

Mfeketo was the Cape Town mayor at the time when Mokwena was hired on the Jewellery City project.

In the other matter the city council is still pursuing – a R3.6m contract that was awarded to the unknown Full Swing Trading for a “social facilitation” process ahead of the 2006 local government elections – it has not managed to recover a cent.

It has been pursuing Mgoqi, who has since been sequestrated, and two other former city council officials who are alleged to have been privy to the contract being awarded without a tender process or council approval.

The directors of Full Swing Trading were never tracked down.

Speaking after yesterday’s meeting, MPAC chairman William Mxolose said they had requested a detailed report from its officials on the two matters, so that it can take an informed decision next month on how to proceed.

The DA’s Paddy Chapple said yesterday it felt as if “the end will never be in sight”.

But he said the city council was bound by law to pursue the recovery of the funds.