The Ekurhuleni Metropolitan Municipality (EMM) may have lost more than R93-million in a dodgy land development deal.
This startling allegation is made by metro manager Patrick Flusk in an affidavit submitted to the Pretoria High Court this week, in an application by the developer of an upmarket East Rand property development.
Developer Rean Booysen asked the court to force Ekurhuleni to give him a certificate stating that the council will provide engineering services to his luxury ‘eco-development†on the Meyersdal Nature Estate immediately. The court postponed the matter on Thursday to June 10 — a move that infuriated Booysen, but pleased the municipality.
The council has refused to provide the certificate, which Booysen needs to register the transfer of stands to its owner.
Flusk said this was because a preliminary forensic investigation into the Meyersdal development has uncovered ‘extensive irregularities†in the land deal. Until the probe is finalised, he will not sign anything.
In his affidavit Flusk says land ‘worth not less than R100-million†was ‘alienated to the developer in an irregular fashion for the paltry sum of some R7-millionâ€.
At issue is a land-swap deal completed in 2005. Booysen swapped land that was unsuited for development for Ekurhuleni land that could be developed.
Flusk’s court papers raise red flags about the original land deal and the involvement of councillors and metro council staff in approving a seemingly senseless transaction.
It also for the first time reveals the forensic investigation by advisory firm Pasco into the multi-million- rand deal.
Pasco was in the news recently when independent Ekurhuleni councillor Izak Berg questioned the appointment of the firm to investigate allegations of fraud and corruption in the municipality’s fleet maintenance workshops a year ago, as well as money paid to the company.
The investigation led to the suspension of 12 people from the workshops.
According to Booysen’s affidavit, there are 280 purchase agreements awaiting registration that are ‘dependent upon the required certificateâ€. He says ‘there exists no lawful reason why the authority is withholding the required certificate and it is contended that its conduct is maliciousâ€.
He also claims that at a meeting in mid-February, ‘Flusk wanted to use his authority to issue the [engineering services] certificate to compel us to make payments to the EMM of amounts that it is not entitled to, but which Flusk contended were.
‘It is highly suspicious for Flusk to now attack [us] on a transaction that took place some two years ago and formed the basis for several administrative decisions which were taken thereafter on the land in question. For instance, the [council] proclaimed the township with full knowledge of the relevant facts relating to the acquisition of the land.â€
Flusk responds that the discovery of extensive irregularities in the acquisition of the land and ‘the manner in which the developer sought to secure the development rights to this land†is at the centre of the dispute.
He argued for a postponement, stating that the investigation had not yet run its course.
He said that in February last year the municipality received a letter from the Gauteng department of local government advising that the department had received a tip-off about the deal from the national anti-corruption and fraud hotline. Other complaints had ensued.