A farm in Newcastle – bought for R6.8 million with government funding in a land reform deal – has been seized by the state amid allegations of fraud.

On Friday, officials from the asset forfeiture unit (AFU), accompanied by police and a court-appointed curator took control of the 166-hectare Harte Rivier Farm and all the livestock and farming equipment in terms of an order granted by Judge Yvonne Mbatha.

This is the fourth farm in the province which has been “preserved” under asset forfeiture legislation because of alleged fraud in the awarding of settlement and production land acquisition grants.

In an affidavit in support of the application, the provincial AFU head Knorx Molelle said the police were investigating complaints of fraud and corruption committed against the Department of Rural Development and Land Reform which was responsible for redistributing productive land to previously disadvantaged individuals.

He said the department awarded grants – set at R111 000 a household – to applicants who qualified.

In August 2008, the department had awarded a grant of R6.8m to the Mdlovu Community Trust to assist in buying the Newcastle farm.

“The grant was awarded based on a memorandum compiled by Thulani Zungu, principal planner in the department.

“Upon receipt of the grant, the trust then bought the farm, livestock, farming implements and equipment from Benjamin Henry de Wet Stieger and his wife, Susan,” he said.

Molelle said Zungu, in his memorandum, had said the Stiegers had wanted to sell their farm to their labourers.

The farm was to be sold to a trust consisting of five trustees and 31 beneficiaries, who were all labourers and dwellers.

He said when the deed of trust was registered with the master of the high court, some of the names of the beneficiaries were not the same as the ones approved in terms of the department’s memorandum.

The police investigation revealed that the trust had been fraudulently created and that the trustees and beneficiaries were not aware of the trust nor of the property it now owned.

Further, Steiger denied that the alleged trustees and beneficiaries had ever worked or resided at the farm, or that he had ever expressed a desire to sell his farm to his employees, saying he only had two workers. Two other department employees who had allegedly done the valuation denied ever doing this.

Molelle said the property was the proceeds of crime and needed to be preserved until the final outcome of the matter.

Criminal investigations are continuing. - The Mercury