Get more Mail & Guardian
Subscribe or Login

Housing scandal arrest ‘imminent’

The wheels of justice finally seem to be turning over a huge suspected fraud involving a housing scheme for the poor that is said to have cost the Vryburg municipality more than R60-million in 2008 and 2009.

National Prosecuting Author­ity spokesperson Velekhaya Mgo­bhozi confirmed this week that the Hawks have handed the NPA a docket and that an arrest will be made shortly. He said a fraud investigation is “at an advanced stage”, but would not elaborate.

Central to the scandal is a company called Khasu Engineering Services, which an engineer appointed by the Special Investigat­ing Unit (SIU) found had completed only four of the 3?000 low-cost houses envisaged by the scheme, despite receiving the full R86?million contract price.

After an on-site inspection, the engineer found that work to the value of only R20-million had been completed, much of which was of poor quality.

A cash-flow analysis by Johannesburg-based forensic accountant Anton Kriel, hired by the SIU, found that the owner of the company, Khotso Frank Khasu, shifted millions of rands through at least 167 accounts during the first year of the contract, many held by his friends, business associates and relatives.

Kriel said he is angry that “the money was not used to build houses for poor people … it’s a crime against humanity, in my opinion”.

In another development, amaBhungane learned this week that Khasu has been placed on “precautionary suspension” by the department of co-operative governance and traditional affairs, where he is a chief director on an annual salary of at least R900 000.

He was suspended on full pay in November, following the publication of a Mail & Guardian story earlier in the year revealing that he had been hired by the department despite an ongoing Hawks investigation into the Vryburg housing debacle.

At the time, department spokes­person Dumisa Jele said that “the necessary steps will now be taken to establish the facts and deter­mine the actions, if any, that need to be taken. Impropriety of any sort will be dealt with in an appropriate manner on the basis of sound legal advice.”

This week Jele said Khasu’s suspension related to the fact that he had not declared his business interests when applying for his government job, in line with section 30 of the Public Service Act.

AmaBhungane tried to speak to Khasu on Wednesday, but was told by an unnamed interlocutor that he was in a meeting.

Later, his lawyer, Ismail Ayob, contacted amaBhungane and said neither he nor Khasu knew anything about an impending arrest over the Vryburg housing project. He described the allegations against Khasu and his company as “far-fetched”.

Ayob said the M&G article had been part of a departmental disciplinary hearing against Khasu, but the department had been forced to amend and drop some of the charges after being unable to substantiate them.

The lawyer also charged that amaBhungane had based its previous articles about Khasu Engineering Services on allegations from an unnamed source, rather than on the findings of Kriel and the other SIU consultant. In the M&G article published in June last year, Khasu said: “I don’t want to comment. I have no story and I have said this before: I have nothing to say about this. It happened five years ago.”

“Urgent need”
The housing project began controversially in 2007 when the Naledi (Vryburg) council appointed Khasu’s firm to build the houses and provide bulk services in extensions 25 and 28 of the Huhudi township without issuing a tender. It justified this on the grounds that the houses were urgently needed.

The Democratic Alliance raised the issue in the National Assembly and the local government minister, Pravin Gordhan, said in reply to a question that Khasu Engineering Services had not repaid the overpayments made by the Naledi municipality.

The DA called on Gordhan and the North West co-operative governance and traditional affairs MEC “to urgently intervene and to institute the necessary criminal and disciplinary action in terms of section 32 of the Municipal Finance Management Act. Criminal charges must be laid.”

The DA quoted a technical report by the North West human settlements department as saying that only some of the internal water services for the 1?500 stands in phase one of the project were completed; that there was still an outstanding requirement to install internal water and sanitation services for 1?500 stands in phase two; that the quality of the structures on the ground did not warrant the expenditure incurred; and that the top structures needed extensive remedial work.

The SIU identified “numerous” fixed properties registered in Khasu’s name and said it had asked the Asset Forfeiture Unit to put a caveat on all of them.

* Got a tip-off for us about this story? Click here.

The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See for our stories, activities and funding sources.

Subscribe to the M&G

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them.

Drew Forrest
Drew Forrest has been working as a journalist for 40 years, with stints at Business Day, Mail & Guardian, Times of Swaziland and the amaBhungane Centre for Investigative Journalism. He has been a deputy editor, political editor, business editor and labour editor, among other positions. Author of a book on cricket, The Pacemen (Pan Macmillan 2013), he has also edited several non-fiction books. He is the managing partner (editorial) of IJ Hub, a regional training offshoot of amaBhungane.

Related stories


If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here


Subscribers only

R15m to rid Gauteng of dirty air

The World Bank is funding a plan to deal with air pollution in Ekurhuleni, Tshwane and Johannesburg

Reservations about ‘new deal’ for rhinos, lions, elephant, leopards

Draft policy promotes species playing their role in wilderness systems but one conservationist says leopards are being sold out

More top stories

Malawi moves to Maggie Mkandawire’s beat

Empowering her people through music and education, Maggie Mkandawire fights the Covid-19 pandemic in her own unique way

Vaccines split global recovery – IMF

The global economy will expand by 6% this year but the economic gap between nations is widening.

R15m to rid Gauteng of dirty air

The World Bank is funding a plan to deal with air pollution in Ekurhuleni, Tshwane and Johannesburg

Reservations about ‘new deal’ for rhinos, lions, elephant, leopards

Draft policy promotes species playing their role in wilderness systems but one conservationist says leopards are being sold out

press releases

Loading latest Press Releases…