The transactions that resulted in the property sale led to a R1.94 billion civil damages claim being instituted in 2017 against the City of Johannesburg (CoJ) and Investec by Bill Kirk, whose company Associated Golf Developments previously submitted a bid for and on behalf of the Asibambane consortium for the Huddle Park property redevelopment.
However, the forensic report, a copy of which is in Business Report’s possession, concluded the original complaints and civil actions instituted by Kirk were, for a number of reasons, without merit.
The alleged irregularities and criminal conduct occurred when the ANC was in charge of the administration of the CoJ.
Business Report had reported on these issues in June 2017, with the CoJ and Investec previously both denying any wrongdoing and defending the claim.
A number of other high court applications were subsequently lodged, including a successful application by the CoJ last year for security for costs against Kirk that is now subject to an appeal.
A criminal charge was laid in April 2017 by Kirk, related to the alleged irregularities and unlawful manner in the disposal of portions of the Huddle Park property when it was further alleged that fraud, forgery and uttering and perjury were committed during the disposal process.
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.
The essence of the criminal charges was 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 the city's ratepayers and other short-listed tenderers.
The Directorate for Priority Crime Investigation, commonly known as the Hawks, did not respond to an email request for an update on the status of the case.
It was alleged that the price paid by the Investec-led consortium was significantly less than the market valuation for the property. Investec was the only bidder during the second allegedly flawed disposal process, which resulted in it acquiring the Huddle Park site for R40million, excluding VAT, in June 2011.
The valuation of the property was conducted by Thapelo Mmusinyane, an internal candidate valuer at the Johannesburg Property Company (JPC), and “checked and certified” by professional registered valuer George Ramovha.
A site adjacent to the Diepsloot squatter camp, which is about 40km away from Huddle Park, was used for comparative purposes to determine the value of the Huddle Park site.
A complaint lodged by Kirk with the SA Council for the Property Valuers Profession against Mmusinyane and Ramovha in November 2012 resulted in both of them being found guilty of improper conduct during a disciplinary hearing in November 2016.
Mmusinyane received a caution, while Ramovha was fined R5000, with the entire fine suspended for five years.
Mmusinyane lodged an appeal against the judgment and sentence, but subsequently withdrew it and then reinstated it.
But Priscilla Mdlalose, the chief executive of the Council for the Built Environment, confirmed last week that Mmusinyane had withdrawn the appeal and “the parties were in the process of finalising the negotiated agreement”.
Patrick Corban, the chairperson of the JPC until last month, confirmed in a meeting with Business Report after he had left the JPC that he had requested Paul O’Sullivan to investigate the transaction and indicated the actual value of the property was about 10 times the price eventually paid for it.
Kirk claimed a conspiracy had resulted in Investec acquiring the property and the price had been specifically valued at below R50m because this was the threshold above which the transaction would require National Treasury approval.
The forensic report said the valuers had been disciplined for their conduct, adding: “The bad valuations, coupled with a string of recklessly incompetent management failings at the JPC had resulted in the land in question being sold off at prices well below the market value. However, while the purchasers of the land have clearly benefited from (this) there can be no blame apportioned to them for seizing a commercial advantage.
“If any of the employees of the JPC that were involved in the reckless incompetence are still employed by the JPC, consideration might be given to taking steps to properly investigate their role.”
An observation in the report was that it was inconceivable that 21 persons of different races, as well as employees or directors of different entities, conspired and/or colluded with each other to commit the offence of corruption to benefit a bank.
“If such a conspiracy took place, it is inevitable that evidence would have surfaced over the last 10 years, or more,” it said.
Kirk said the well-orchestrated and corrupt activities that took place between the government entities and the private sector, as revealed at the Zondo commission hearings, were indicative that it was both plausible and possible that a conspired, unlawful, irregular outcome and disposal of the Huddle Park property occurred, not once but twice.
Nthatisi Modingoane, the deputy director of communications at the CoJ, said neither the City of Johannesburg or JPC had ever commissioned O’Sullivan to work on a report, which was generated on O’Sullivan’s own initiative.
Advocate Mxolisi Ndlovu from criminal prosecutions at the Group Forensics and Investigation Services at the City of Johannesburg said in September last year that it had taken a decision not to pursue this matter further, because Kirk’s allegations were unfounded based on the forensic report.
Modingoane failed twice to respond to a specific question about whether any action had been taken against the officials mentioned in the forensic report as having been involved in “reckless incompetence”.