Jay Singh,whose four blocks of flats were seized by the Asset Forfeiture Unit, has denied any wrongdoing in the development.

Durban - Jay Singh, the controversial businessman whose four blocks of flats at a Phoenix housing project were seized by the Asset Forfeiture Unit (AFU) on Wednesday, has denied any wrongdoing in the development.

“It is all lies,” he said. “Nobody must say they knew nothing about this. It was all above board.”

Singh denied allegations that his company did not have accreditation to build social housing projects, that the flats were built without electrical compliance certificates and that he had illegally transferred the units to another housing company.

He admitted that he had built the units without building plans, but he said he had been given permission to do so.

Singh spoke to the Daily News just hours after officials from the AFU and the national Treasury swooped on the housing project north of Durban and seized assets and cash worth more than R400 million, which investigators allege are the “proceeds of unlawful activities”.

A one-year investigation by the Treasury uncovered alleged mass irregularities involving the state’s Social Housing Regulatory Authority (SHRA) and Singh’s Woodglaze Trading in the development.

The Phoenix project is the subject 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 Hawks have launched a criminal investigation into the alleged irregularities.

Yesterday, officials froze a sum of nearly R102m that had allegedly been transferred from the SHRA into the bank account of housing company First Metro as payment to manage the development.

First Metro claims the money was transferred into its account without its knowledge.

Investigators believe the money was transferred in an effort to legitimise the construction of the development.

At the centre of the probe is the conduct of the SHRA in making alleged irregular 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 as director a year later, leaving the directorships to Annamalay, Jagadasan and a business associate, Pradeep Inderjeeth.

According to papers before the Durban High Court, the SHRA paid R236m as a grant from the national Department of Human Settlements to Woodglaze and Moko to develop the Phoenix project.

The money was paid over despite the companies allegedly not having appropriate accreditation to build social housing projects, not possessing building plans and certificates for electrical compliance, and not even owning the land they intended building on.

eThekwini Municipality owned the land and “irregularly” transferred it to Woodglaze, the court papers state.

Investigators believe the development did not qualify as social housing as tenants earned above the R7 500 threshold.

In court papers, Levy Moshoette, an internal systems auditor at the Treasury, said he had come across the payments from the SHRA to Woodglaze while investigating the entity for a separate matter in the Eastern Cape.

He discovered that the SHRA had transferred R236m to Woodglaze without informing the provincial Department of Human Settlements.

He said in an “attempt to regularise” the project, the SHRA approached First Metro – an accredited social housing company – in November 2012 with a view to purchasing the units. First Metro agreed but wanted to perform due diligence on the properties before proceeding with the deal.

However in March, before the due diligence was done, a sum of R101 764 000 had been transferred into First Metro’s account, allegedly without the company’s knowledge.

“The immovable property was (also) transferred to First Metro without their knowledge and consent and consequently, the said transaction could have only been fraudulently made at the instance of Woodglaze,” Moshoette stated.

“I thus would submit that in both instances the transactions relating to the transfer of the block of flats by Woodglaze to First Metro as well as the transfer of funds by the SHRA to First Metro were unlawful.”

Singh denied the allegations on Wednesday, claiming the court papers were “false”.

He said his only problem was that some tenants earned more than R7 500 a month but he said there was a good explanation for this.

“When they moved in there five years ago they earned within the bracket of R3 500 and R7 500. However, people’s salaries increase and they get better jobs. I can’t do anything about that,” he said. “Some people earn 100 percent more than they earned five years ago.”

He denied building without electrical certificates but said he had been given permission to build without building plans.

“I was given the go-ahead to build and submit the plans later, which I did.”

Singh said First Metro was wrong to say it knew nothing about the money or the transfer of the units.

“How can they say the money was transferred without their knowledge? At the end of the day we had a meeting with them and they were aware of everything.”

He said that Woodglaze had in fact cancelled the agreement with First Metro after the due diligence dragged on for more than a year.

Singh also denied allegations that Moko was not an accredited social housing company. “I have the papers to prove everything.”

Mervin Govender, a founder of the Phoenix Tenants and Residents Association, said he was relieved that the authorities were looking into the plight of the tenants.

“We have been fighting this for so long now that this action is a huge relief. Hopefully it will give residents hope that there is light at the end of the tunnel,” he said.

* In our report on Wednesday, “Asset raid on Jay Singh”, the Daily News erroneously stated that a sum of R101.764 million was transferred from Woodglaze Trading into the bank account of First Metro. The money was in fact transferred from the Social Housing Regulatory Authority to First Metro. The error is regretted.

Daily News