The investigation into multimillion-rand kickbacks in the KwaZulu-Natal Department of Housing is about to widen after the arrest in the second week of March of the province’s housing CEO, advocate Emmanuel Mdu Khoza, and his alleged accomplice, estate agent Jayanderen Pillay.
The Mail & Guardian first reported the kickback probe two weeks ago.
Pillay and Khoza, who was appointed by former African National Congress housing MEC Dumisani Makhaye, have been charged with fraud and corruption totalling R30-million. Both men were released on bail of R500 000 each.
The charges relate to the purchase of about 27 properties by the province on the instructions of Khoza for a total of R72-million. The properties were allegedly massively overvalued and, as part of the sale, ”commissions” of 30% to 40% were paid to Pillay’s company, SAI Enterprises Properties. Prosecutors said police had evidence of R1,6-million that Pillay had allegedly paid to Khoza.
In one example for which the M&G has seen documentation, the province paid R1,9-million for a property, of which R716 000 was paid by the seller to SAI Enterprises. SAI does not appear to be a registered company.
In another example, the province bought the well-known Four Seasons hotel on the Durban beachfront for R15-million. Independent valuations said it was worth less than R4-million.
In a twist to the case, Anesh Maharaj, the attorney representing Pillay, was himself involved in at least two of the sales. M&G investigations have linked him to the sale of the Four Seasons and of another well-known hotel, the Palm Beach. The Palm Beach was valued at a little more than R2-million, but was sold to the province for R7-million.
Confronted with this potential conflict of interest with his client, Maharaj first claimed he was involved in only one ”prospective sale” — that of the Four Seasons. He claimed that the transfer was never completed, though a spokesperson for the provincial Department of Housing later said that the deeds office had confirmed that the sale had gone through.
When confronted with his 14% interest in the close corporation that sold the Palm Beach, Maharaj said he was a ”minor shareholder” but confirmed he had known about the sale.
He refused to comment on his potential conflict of interest with his client and said he would issue a statement after the next court appearance, scheduled for April 17.
Meanwhile, the police are expected to investigate if Pillay made other payments from his generous commissions. Sources close to the investigation said it was unlikely that Pillay, a small-time operator who worked from home, would have been allowed to retain the lion’s share of the commission while Khoza allegedly took all the risk in approving an inflated price.
Police sources also said it was likely that the asset forfeiture unit would get involved in the investigation.