Knysna’s R28m lease deal under scrutiny

The Knysna Municipality has been hauled to the Office of the Public Protector over alleged maladministration.

The Knysna Municipality has been hauled to the Office of the Public Protector over alleged maladministration.

Published Dec 20, 2023


The Knysna Municipality has been hauled to the Office of the Public Protector over alleged maladministration relating to the approval of a lease agreement with a business that apparently already owed it R28 million.

ActionSA lodged a complaint with the public protector, requesting urgent intervention to look into alleged misconduct.

The investigation comes as reports emerged recently that the municipality faces an unprecedented financial crisis that’s been affecting service delivery.

However, the municipality maintained that its finances were not in trouble.

In the request for urgent intervention, ActionSA’s constituency head in Knysna, Julie Seton, said their complaint pertained to potential misconduct by the municipal manager, Ombali Sebola.

“Despite continuous appeals from ActionSA, the Western Cape provincial government has regrettably failed to place Knysna under administration, allowing malfeasance to persist unabated. A glaring consequence of this failure is the catalyst behind our public protector complaint, where on October 28, the municipal manager tabled a recommendation before Council for the approval of a five-year lease agreement with Grey Elephant Investments (Pty) Ltd for office space.

“According to a supplementary agenda report published in March from the municipality’s finance and governance committee meeting, the municipality listed its top business debtors where Grey Elephant Investments ranked highest, owing a total of R28 467 176.07.

“However, at a special council meeting held in November, the municipality detailed it needed alternative office space as they could no longer continue the leasing of three sites due to it being on ‘a deviation as no SCM process was followed to enter into (new) lease agreements’ and that they could not afford it.

“Grey Elephant Investments (Pty) Ltd has offered the leasing of its building from January 1 for either a five-year or a 10-year lease with a 6% escalation.”

The Office of the Public Protector confirmed it had received the complaint.

“The matter has been registered and is being investigated. The investigation is ongoing.

“Accordingly, section 7(2) of the Public Protector Act 23 of 1994 prohibits the disclosure, by any person, of the contents of any document or record of any evidence given before the public protector or deputy public protector during an investigation.”

Enquiries to the Knysna Municipality and Grey Elephant Investments were not answered by deadline on Tuesday.

An ANC/Patriotic Alliance/EFF/PBI coalition currently governs Knysna, having removed the DA from power.

Local Government MEC Anton Bredell said they welcomed the public protector investigation.

His spokesperson, Wouter Kriel, said they were working with the public protector and the Special Investigating Unit to advance collaboration.

“Bredell has also appointed a committee to investigate breaches of the Code of Conduct for councillors in accordance with his powers under Item 16(5)-(8) of the Code, following a court ruling that the unlawful conduct of the executive mayor, the deputy mayor, the members of the governing coalition, and certain senior municipal officials was in direct contravention of the heightened duty that rests on public officials in the exercise of their functions in government.

“In upholding its constitutional monitoring and support obligations, the Western Cape government is presently undertaking a municipal diagnostic assessment in the municipality to assess and identify areas, where support may presently be required by the municipality,” said Kriel.

GOOD Party secretary-general Brett Herron said: “The people of Knysna have endured years of maladministration and corruption – including under the DA –which had resulted in several requests to the public protector for an investigation and intervention.

“The public protector must investigate all of the corruption and maladministration which is historically substantial and has led to where the town is today. It should be obvious that the town has a good property rates base and it should not be in the neglected state it has been in for the last decade at least.

“If the public protector is investigating she must investigate the legacy of its poor governance and not limit her investigation to the current shambles. The current mess had its roots in the previous administrations too.”

The EFF did not respond to requests for comment by deadline on Tuesday, while ANC Southern Cape spokesperson Moyisi Magalela would only say: “Unfortunately I am not able to comment as I am not aware of such.”

DA councillor Sharon Sabbagh said: “The DA are not in favour of the proposed lease with Grey Elephant Investments, being for office accommodation, in its current format. We will assist the public protector with any investigation it is currently pursuing.”

While the municipality rejected claims of experiencing financial difficulties, Knysna residents came to its rescue to repair a section of George Rex Drive just in time for the Garden Route town to welcome visitors over the festive period.

This month the municipality has also been battling with water service delivery and sewage issues.

In a post on social media on Tuesday, it advised residents of water interruptions in Dam-Se-Bos, Hlalani, Kaalkol and Nekkies.

“The Dam-Se-Bos elevated tank pump has experienced a breakdown.

The millwright contracting team is set to commence repairs, and there are indications that a new pump will be delivered to Knysna by Tuesday (yesterday). Consequently, we have taken the initiative to organise water tankers to cover a section of Dam-SeBos, Nekkies and the Sanlam area in the interim.”

Cape Times