Behind the evictions of hundreds of people in Johannesburg’s inner city — and a protest march last week — lies evidence of fraud, theft and mismanagement, as revealed by a forensic audit commissioned by the Gauteng Department of Housing.
The audit, now two years old but kept hidden until it was leaked to the Mail & Guardian this week, looks into the Seven Buildings Company. It alleges that five of its directors, who were elected by tenants, are responsible for the abuse of funds that led to the liquidation of the company last year.
Seven Buildings was hailed as a pioneering social housing pilot project when it began in 1998. The Gauteng Housing Department granted R6-million to 2 000 tenants to buy their flats. But in 2000 five of the seven buildings split from the company because of a hike in rentals. A new board of directors that represented tenants from those buildings was elected.
Two years later the company was liquidated for failing to pay back a R3,6-million bridging loan to Inner City Housing Upgrade Trust (Ichut). “Documentation presented to us indicates gross mismanagement of the affairs of Seven Buildings,” says the forensic report. Most of the members of the new board have been cited for “misappropriating” rentals.
Last Friday a small group of tenants marched to the housing department to demand mediation between tenants and Ichut. Leading the group was a former director, Mike Zulu, named in the audit as using company funds for personal use. Zulu told the M&G: “This report is not true … They never contacted me and asked me what happened to this money.”
Pressage Nyoni, former manager of Seven Buildings, said it was the housing department’s responsibility to protect tenants: “They cannot just give millions to tenants then wash their hands of them.”
The housing department failed to respond to questions sent this week.