JUSTIN ARENSTEIN, Nelspruit | Monday 6.00pm.
THE town council of Ekangala, Mpumalanga, has been ordered to take disciplinary action against the chairman of its housing committee and a senior housing official, after they illegally issued promissory notes worth R78-million.
The African National Congress also announced a review of councillor Jacob Masango’s role in the scheme.
Masango and housing official Johannes Mnguni tried to use 400km of regional road and a series of council assets including schools, a sewerage works and the local soccer stadium as collateral for a deal with Davron Projects cc, a Pretoria-based developer. Davron was to raise R78-million for local housing projects, using the promissory notes and council assets lodged with Standard Bank as assets.
An investigation report, to provincial local government MEC Craig Padayachee, said on Monday that the notes were issued without any formal council resolution but were facilitated by a Section 59 council sub-committee.
Davron attempted to discount two separate promissory notes for US$10-million and US$3-million at local financial institutions, before an internal government investigation was prompted by news reports three weeks ago.
But the one-man investigation, by local government management services director Bruno Vilane, found this week that neither official had attempted to enrich themselves or otherwise defraud the government. But Vilane’s report excluded an account of the council’s ignoring orders from Padayachee, and of misrepresentation of Padayachee.
Padayachee now says he accepts that the council had “good intentions”.
The assets illegally attached as collateral included five schools, a library, police station, magistrate’s courts, soccer stadium, sewerage works, council houses and 400km of regional tarred road. The deal is similar to six illegal promissory notes worth R1,3-billion issued by suspended Mpumalanga Parks Board (MPB) chief, Alan Gray, earlier this year. The Heath special investigative unit and the Reserve Bank are currently investigating the deals. — African Eye News