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Durban - Officials from the Asset Forfeiture Unit (AFU) and the national Treasury swooped on four buildings linked to controversial Durban businessman, Jay Singh, on Wednesday and seized assets and cash worth more than R400 million.
This took place after forensic investigation uncovered alleged mass irregularities in the development of a Phoenix housing project.
The unit, with the assistance of Treasury, also froze a sum of R101.764 million that had allegedly been transferred by Singh’s Woodglaze Trading into the bank account of housing company, First Metro, to manage the development.
First Metro, an accredited social housing institution, claims the money was transferred into its account without its knowledge and is assisting authorities with the investigation.
Investigators believe the money was transferred as part of an elaborate effort to legitimise the construction of the controversial housing development.
In addition, 1 224 units that are part of four blocks of flats at the housing project, were placed under curatorship.
The four blocks – Stanmore, Eastbury, Treehaven and Rydalvale – are worth an estimated R100m.
At the centre of the one-year investigation is the conduct of the state-owned Social Housing Regulatory Authority (SHRA) in making multimillion-rand payments to Woodglaze Trading and Moko Rental Housing Projects for the development.
The directors of Woodglaze are Singh’s ex-wife, Shireen Annamalay, and his son, Ravi Jagadasan.
Singh founded Moko – a Section 21 company – in 2008 and resigned a year later, leaving the directorships to Annamalay, Jagadasan and a business associate, Pradeep Inderjeeth.
The Hawks have launched a criminal investigation into the alleged irregularities.
According to papers before the Durban High Court, the SHRA paid R236m as a national Department of Human Settlements grant to Woodglaze and Moko to develop the Phoenix housing project.
The money was paid over despite the companies allegedly not having appropriate accreditation to build social housing projects, not having building plans and certificates for electrical compliances, and not even owning the land they intended building on.
The land is still owned by eThekwini Municipality.
Head of the forfeiture unit in KZN, advocate Knorx Molelle, alleged in papers filed in court for the preservation of the assets that in addition to transferring money to First Metro, Woodglaze transferred the 1 224 units into the institution’s name, “despite the fact that the purchase price was not secured and the suspensive conditions not fulfilled”.
“First Metro supports this application in order to ensure that funds allocated for the project are rightfully reassigned to the National Treasury and the relevant properties are attached to investigate the misrepresentations that were fraudulently made in respect of the Phoenix Housing Project,” Molelle states.
“They did not sign any transfer documents as purchasers to give effect to the transfer of the units.
“It only became aware that it was the unintended owner of the units in question when the Phoenix Tenants and Residents Association brought an interdict and review proceedings to try and halt the illegal evictions of tenants from the properties at Phoenix by Woodglaze.”
Molelle said the transfer of money and units from Woodglaze to First Metro were derived from unlawful activities and were therefore the proceeds of fraud and theft.
The Phoenix development is part of separate court proceedings brought by the Phoenix Tenants and Residents Association, which represents families who fear eviction and who accuse Woodglaze of irregular conduct.
The families, some of whom moved into the development four years ago, pay between R2 500 and R3 000 a month in rent.
According to a source with intimate knowledge of the investigation, the units were meant for people who earned between R3 500 and R7 000 a month.
But many had been given to those who earned much more than that.
“There are Jeeps parked there, and Mercs.
“We don’t know what criteria was used in getting people accommodation there but some of the tenants there earn well above R7 000,” the source said.
The source said the saga began in 2008 when eThekwini Municipality awarded the contract to Woodglaze to develop 2 281 houses in Phoenix.
“Somewhere along the way the land these units were built on was not transferred from the municipality into Woodglaze or Moko.
“They in turn decided to sell units on land they do not own, to people for a profit,” the source said.