File picture: Matthews Baloyi/Independent Media
A R1.94 billion civil damages claim has been lodged against the City of Johannesburg (CoJ) related to an allegedly irregular, fraudulent and possibly corrupt property transaction that involved two former mayors, several high-ranking city officials, two banks and a black-owned property group.

The CoJ has given notice of its intention to defend the claim.

A criminal charge was also laid in April this year related to the alleged irregularities and unlawful manner in the disposal of portions of Huddle Park property when it was further alleged fraud, forgery and uttering, and perjury was committed during the disposal process.

The criminal case opened at the Hillbrow police station in Johannesburg was transferred in April this year to the Directorate For Priority Crime Investigation (DPCI), commonly known as the Hawks, for investigation.

Brigadier Hangwani Mulaudzi confirmed last week the alleged tender fraud case was under investigation at the Serious Economic Offences Unit of the DPCI, but was still at its initial stage of investigation.

The essence of the criminal charges is that the CoJ disposed of an asset of the state in an allegedly irregular, unlawful and fraudulent manner to a non compliant tenderer, which caused prejudice to both the city’s ratepayers and other short listed tenderers.

Complaints were lodged previously by Kirk with several entities, including the special investigation unit (SIU) and Johannesburg commercial crime, and a review application lodged with the CoJ, which was withdrawn when the CoJ demanded R100000 security from Kirk.

A complaint was also lodged with the Public Protector in November 2011, but to date it has not issued any report on the investigation of the complaint.

Oupa Segalwe, the senior manager communications at the Public Protector, said this week the investigation of the complaint was “pending” and was unable to provide any indication of when it was likely to be completed. He said its finalisation had taken so long “due to capacity constraints as the office has a backlog” of complaints.

The civil damages claim and criminal charges were laid by Bill Kirk, whose company Associated Golf Developments submitted a bid for and on behalf of the Asibambane Consortium for the Huddle Park property redevelopment.

In terms of an affidavit Kirk submitted in support of the criminal charges that were laid, the complainant named 23 people or companies who, according to him, were involved in the allegedly irregular and unlawful award of the tender for disposal and redevelopment of 183 hectares of prime land in Huddle Park.

Business Report has a copy of the affidavit, but has been advised on legal grounds not to disclose the identify of the implicated people and companies at this stage. The alleged irregularities and criminal offences relate to two disposals for the sale and redevelopment of a portion of Huddle Park that have been investigated by Business Report over the past five years.

The first tender was terminated. An Investec-led consortium was the only bidder during the second disposal process, which resulted in it acquiring the Huddle Park site for R46million, including VAT, in June 2011.

The Asibambane consortium, one of the short-listed bidders, disbanded after it lost the tender. Asibambane members ceded and assigned all their rights and claims they had in the matter to Kirk.

It is alleged the price paid by an Investec-led consortium was significantly less than the market valuation for the property.

Estimate

Brian Mahlangu, the then spokesperson for the Johannesburg Property Company (JPC), told Business Report in 2012 the price paid by an Investec-led consortium was in line with “the independent valuators estimate”.

Subsequent Business Report investigations revealed the valuation was conducted by Thapelo Mmusinyane, an internal candidate valuer at the JPC, and “checked and certified” by professional registered valuer George Ramovha.

However, an adjacent site to the Diepsloot squatter camp was used for comparative purposes to determine the value of the Huddle Park site.

This resulted in Kirk lodging a complaint with the SA Council for the Property Valuers Profession (SACPVP) against Mmusinyane and Ramovha in November 2012.

Both of them were found guilty during a SACPVP disciplinary hearing in November last year of improper conduct. Mmusinyane in December received a caution while Ramovha was fined R5000, with the entire fine suspended for five years.

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