Durban — The eThekwini Municipality is investigating how its officials sold a prime piece of real estate in Durban North for R200 000, labelling the sale as “fraudulent”.
Attorney Nico Gey van Pittius, acting on behalf of the Riverside Hotel, said in a letter sent in October that his clients learnt about the “illegal sale” of a Durban North property by complete chance.
Gey van Pittius said his clients had a “substantial interest” in two neighbouring properties which were said to have a combined value of R15 million and could fetch monthly rentals of R100 000.
His clients requested he do a check for any encumbrances or servitude against their title deeds.
That’s when he learned about the 2012 sale of one of the properties for R200 000 to Shabeer Joosub, who immediately “sold” it to a company he owned, but the transfer of the property only happened in July.
Lindiwe Khuzwayo, the municipality’s spokesperson, confirmed: “Our City Integrity and Investigations Unit is investigating the sale of the property for R200 000 as this is fraudulent.”
When approached for comment, Gey van Pittius said: “The municipality has to present the letter to their council and they indicated they will respond. Therefore, we cannot comment any further.”
In his letter, seen by the Sunday Tribune, Gey van Pittius listed what he believed were indiscretions committed in the supposed sale, and requested the municipality’s response.
Gey van Pittius said his clients had been using the properties in question since 1998, with the municipality’s knowledge and approval as overflow and conference centre parking.
“The property and its continued usage is extremely important to our client as it forms an integral part of their business and its ability to attract commerce to Durban,” wrote Gey van Pittius.
They came into possession of a municipal report generated by the City’s finance cluster real estate unit, which was sent in July 2022 to their human settlements infrastructure committee, exco and council, Gey van Pittius indicated.
He said the purpose of the report was owing to the City seeking approval to conduct a public participation process in accordance with its municipal asset transfer regulations.
His client responded by requesting a meeting with municipal officials, based on the discovery, which was refused.
Due to their vested interest, the client requested Gey van Pittius to probe further.
His office approached the Pietermaritzburg Deeds Office and conducted further checks on the properties.
Their findings were that one of the properties spanning nearly 2 000 square metres was owned by the municipality.
However, the other property that measured more than 10 000 square metres was sold to Joosub on November 12, 2012, for R200 000.
As a start, Gey van Pittius requested that the municipality urgently provide responses to the following: how did they sell land worth millions to Joosub for R200 000, what municipal laws justified their actions, and whether a public participation process was followed.
He also asked what was the legal context in which the municipality had now proposed to “transfer, lease or develop” a portion of the land in question that did not belong to them, as included in the July 2022 report that they circulated.
Some of the other issues that emerged regarding the sale included: no purchase and sale agreement was attached to the deeds download, the date of the sale and the power of attorney (POA) was November 12, 2012, but the POA was only signed in December 2022.
The person who signed the POA on behalf of the municipality was not listed as their employee, but served as one of the heads in their housing department.
It was also indicated that the site was being excavated for development.
Khuzwayo confirmed that they always were clear about the process that must be followed when disposing of municipal properties.
“The said property was advertised for public participation which is part of the process of disposing of the property. In that public participation process information about the value of the property was disclosed, and that information is public. The sale for R200 000 is being investigated as it did not follow the required legal processes.”
Khuzwayo said they had no obligation to respond to the Riverside Hotel’s correspondence and meeting request after the public participation process began.
Also, they were expected to adhere to regulations that required them to act in a “fair, equitable and transparent” manner when disposing of the property, via a long-term lease in this instance.
Attorney Fathima Rajah, Joosub’s legal representative, said she would not be commenting on allegations if the municipality was doing an investigation, as it could be used against her client in the future.
Rajah also indicated that they were not approached by the municipality regarding the matter.
“Comments will only be made to the relevant governmental institution if and when called upon,” she said.