JUSTIN ARENSTEIN, Nelspruit | Tuesday 9.30pm.
THE illegal R340-million Mpumalanga Parks Boards offshore loan scheme currently being investigated by the Heath special investigative unit is not the only such scheme in Mpumalanga.
The small impoverished township of Ekangala, near Bronkhorstspruit, secretly issued a promissory note for US$3-million to Davron Projects cc on July 23, in an attempt to raise a R10-million loan.
The offshore loan scheme is similar to the five schemes for R1,3-billion entered into by the MPB and also uses state assets as collateral.
National finance minister Trevor Manuel has branded the deal illegal.
Ekangala tried get its promissory notes discounted or cashed by pledging everything from its sewerage works, police station and local schools to 400km of tarred road as security.
The wording of the note is almost identical to those issued by the parks board but the two schemes do not appear to be linked. The promissory note was accompanied by a cover letter alleging that the provincial local government MEC, Craig Padayachee, had full knowledge of the deal and had authorised the scheme.
“I am shocked. I never sanctioned anything of the sort and never would have,” said Padayachee.
His departmental head, Steve Ngwenya, branded the letter “criminal fraud” and warned that the promissory note was illegal. “We only heard about the scheme last week and are investigating it internally. We have sent out letters to bankers and the brokerage involved warning that we have distanced ourselves from the scheme and that the whole deal is invalid.”
The department added in a statement on Monday that other councils in the province had been warned not to enter any loan schemes, issue any bonds or other negotiable documents without written authorisation from national fiscal authorities. – African Eye News Service