/ 21 July 2008

Massive Ekurhuleni land probe

The Ekurhuleni Metropolitan Municipality is reviewing more than 500 land transactions worth millions of rands to uncover possible corruption and maladministration.

Deals under investigation include numerous upmarket estates in Ekurhuleni’s exclusive suburbs, where plots alone are being sold for R1-million and more.

If any of the 526 transactions are found to be irregular or crooked, the Ekurhuleni council will consider going to court to reverse them.

This dramatic development was revealed in court papers submitted to the Pretoria High Court during a dispute between the developer of the controversial Meyersdal Nature Estate and the municipality.

At the centre of the dispute lies a 2005 land swap the Mail & Guardian reported on previously.

Ekurhuleni municipal manager Patrick Flusk is refusing to issue a certificate that will provide engineering services to the estate, pending the outcome of a forensic investigation into the estate by forensic firm Pasco.

Developer Rean Booysen unsuccessfully tried to persuade the court that Flusk should be forced to issue the certificate. Judge Francis Legodi ruled last month that Booysen should have followed internal grievance procedures before turning to the court.

Booysen, the court ruled, should have approached the Services Appeal Board to determine whether Flusk’s decision to hold back approval was just. The board is headed by an attorney or a retired judge, assisted by a registered engineer and accountant.

”I think the Services Appeal Board is, in fact, better placed than this court,” Legodi ruled.

On its part, the municipality lodged a counter-application for the entire development to be cancelled, because of alleged irregularities identified by Pasco in a preliminary forensic report.

Flusk contends that the municipality might have lost up to R90-million by swapping the land where the estate is being developed for a protected area worth R7-million. It is alleged that Booysen manipulated officials and councillors to ”dispose, sell and/or exchange the land”.

The judge also rejected Flusk’s arguments, concluding that he had no authority to make such an application on behalf of the municipality when the council had adopted a resolution in January for the review of this land deal and 525 others in Ekurhuleni. The resolution provides for irregular land transactions to be ”ratified” in cases of a minor administrative error or to be cancelled if corruption is established.

”Two things are clear,” Legodi noted in his ruling, ”the resolution of January 31 2008 envisages verification of 526 land transactions and then to save and maintain such transactions insofar as it might be possible. On the other hand, the counter-application envisages an outright declaration of the exchange agreement and sale agreement relating to the land in question as invalid and that they ought to be set aside.”

Flusk told the M&G this week that although he differed with Legodi’s ruling, he accepted the approach that the investigation into Meyersdal and the other land deals should be finalised before legal steps are considered.

Booysen did not return the M&G‘s calls.

Flusk elaborated on Pasco’s preliminary findings in court papers, alleging serious misconduct by various Ekurhuleni councillors and officials in approving the land swap.

The Pasco investigation has been severely criticised by opposition councillors, who have referred to it as a witch-hunt. Flusk has also been accused of spending millions of rands on the probe without council’s permission. He contends that he had to keep the investigation under wraps.

Councillors and officials implicated in Flusk’s affidavit include ANC councillor Neil Diamond, ”who lobbied for the conclusion of the alienation transaction, notwithstanding that he had been appointed as the sole agent [for the Meyersdal Nature Estate]”.

Diamond previously told the M&G that he had recused himself from two council meetings at which the development was discussed, declared his business interests to the council and was able to wear two hats simultaneously.

Flusk further alleges that ANC councillor Leon van Ronge was influential in the approval of the township establishment application for the estate, ”while being aware of the problems underlying the land alienation transaction”.

Van Ronge is chairperson of Ekurhuleni’s development portfolio committee. Flusk is accusing him of ”blatant disregard” of important town-planning ordinances.

”Councillor Van Ronge’s involvement in the Meyersdal Nature Estate application may have benefited the developer, because it was fast-tracked,” Flusk wrote.

Van Ronge, who also owns an option on a plot on the estate, denies any conflict of interest. ”Does this mean I could never buy land in Ekurhuleni?” he has asked previously.

He said he was not aware of the contents of the Pasco forensic report, but he had spoken to the Pasco investigators and ”made them aware of their mistakes. I was always an arms-length away from the decisions [concerning the land swap],” Van Ronge said.

Another councillor also taken to task by Flusk in court papers is the ANC’s Mahomed Akoon, chairperson of the corporate affairs committee that approved the land swap with Booysen. Flusk charges that his decision was made in ”total disregard of legal advice”.

The municipal manager also lashes out at Ekurhuleni project manager Deon Claassen, who, according to Flusk, ”allowed the developer a free hand to establish the township without due regard to the applicable laws and policies”.

In his judgement Legodi says the grounds for the review of the 526 land deals are twofold: that the disposal of state land was authorised by officials who didn’t have the appropriate powers to do so and that the decision to dispose of such land was manipulated by Booysen, ”who allegedly colluded with the officials of the municipality to improperly dispose of the land belonging to the municipality”.

However, the court found it was ”clear” from Flusk’s affidavit that the municipality does not have ”concrete information or evidence to substantiate their allegations against Booysen”. A copy of the preliminary forensic report was not admitted as part of the evidence.

”Remember, even if it was to be found that the decisions sought to be reviewed in the counter-application [the land swap] were improperly made, that would not necessarily mean having to undo everything arising from such a finding,” the judge noted. ”But if the allegations made against Booysen are proved, this could have direct bearing on the land exchange agreement and on whether to undo everything.”

The M&G reported previously that Gauteng local government MEC Qedani Mahlangu also bought two options on plots in the Meyersdal Nature Estate and later resold them at an undisclosed price.

The Gauteng legislature’s integrity commissioner, Jules Browde, was subsequently asked by the Democratic Alliance to investigate the purchase and found that it was a ”perfectly legitimate purchase” by the MEC.