PARLIAMENT has resolved to institute an inquiry into allegations of corruption, fraud and maladministration at the Development Bank of Southern Africa (DBSA), which the development finance institution has denied.
However, the DBSA yesterday failed to convince the Standing Committee on Public Accounts (Scopa) that various loans amounting to R426 million to Cranbrook Property Projects were above board.
Scopa chairperson Mkhuleko Hlengwa said the committee would rope in the office of the auditor-general and the Special Investigating Unit in this matter.
Hlengwa said that the responses and explanations from the DBSA did not assist the committee with the information it required.
“Scopa will now start the process of instituting an inquiry into the DBSA,” Hengwa said.
“The committee will consult Parliament Legal Services on the process to follow as it begins this process.”
The saga relates to the alleged mismanagement and maladministration of three loans that the DBSA extended to three entities in the mid2000s for property development in Limpopo.
The entities concerned; Blue Horizon Investments 11 (BH 11), Moeparutsi Properties and Proline Trading 60 (PT 60), were all part of Cranbrook Property Projects.
Allegations of mismanagement of these loans were brought to Scopa by the president of the United Democratic Movement, Bantu Holomisa, in October last year.
But the DBSA has dismissed these allegations as baseless.
The bank said Blue Horizon repaid R113.5m towards the R124m loan in seven instalments between 2010 and 2017.
The remaining property in the development in Lephalale was being sold off by auction by the liquidator for DBSA’s benefit after Blue Horizon was liquidated in 2017.
It said Proline had repaid R24.1m between 2011 and 2020 of the R125m loan for bulk infrastructure in Burgersfort.
Moeparutsi repaid R10.4m between 2009 and 2011 as capital repayment it had been able to acquire a 17percent shareholding of Cranbrook as a black economic empowerment partner, but defaulted on R6.6m repayments.
DBSA chief executive Patrick Dlamini said the bank had formulated a comprehensive legal strategy for recovery of monies owing in these transactions.
Dlamini said all these entities had been impacted by the 2008 economic downturn which resulted in the decline in housing demand in these mining towns.
“These allegations have serious potential reputational repercussions. There is no evidence of conflict of interest,” Dlamini said.
“The failure of the transactions in question is attributable to the economic recession in the aftermath of the financial crisis.”
Dlamini also dismissed the alleged victimisation of board members at the State institution.
Holomisa had accused DBSA chairperson Enoch Godongwana of running the DBSA as his “spaza shop”, allegedly leading to the refusal to reappoint two board members.
Dlamini said it was the minister of finance who appointed board members in a fair and credible manner.
Finance Minister Tito Mboweni called for open dialogue and encouraged Holomisa to participate in the meeting.
“The matter must be ventilated openly and credibly so that we can all leave this meeting with a view that DBSA is well run and well managed,” he said.
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