Johannesburg - In an alarming turn of events, Matjhabeng Municipality's executive mayor, Thanduxolo Khalipha, has remained mum on accusations that his municipality is failing black-owned businesses.
This comes after the mayor and his municipality are reported to be embroiled in a corruption scandal that has sent shock waves across the nation.
It has been reported that Khalipha allegedly refused to pay three black-owned companies a total of R88 million for services rendered, demanding a kickback of R4 million from each company.
These companies include MC Security, which is reportedly owed R26 million; Puseletso owed R50 million; and Motse Warona, which is owed R7 million.
One of the companies, Puseletso Security and Projects, alleges in a court summons to the Free State High Court served on July 10 that it is owed an amount of R61 million for services rendered.
"Summons were served on the defendant on July 10, 2023, and expired on August 7, 2023. The defendant has not entered into an appearance to defend, and default judgment is sought against the defendant with payment of R61 million in respect of services rendered to the defendant," reads part of the summons.
Some of the debtors have since been successful in forcing the courts to seize municipal assets in order to get the municipality to pay the alleged debtors.
According to a source close to the situation, Matjhabeng Municipality now faces dire consequences as its assets have been attached by the three companies — MC Security, Puseletso, and Motse Warona — in a court-sanctioned move to reclaim their unpaid dues. The companies took legal action after Mayor Khalipa reportedly demanded a total of R12 million from them.
According to a source, the mayor had instructed the municipality's CFO, Thabo Panyani, to withhold payment until the companies complied with his demand. This alleged act of extortion has provoked outrage and calls for accountability at the highest levels of the Matjhabeng Municipality.
“This crisis potentially threatens the financial stability of the municipality, which may suffer from the loss of crucial assets. The attached assets include municipal vehicles and other critical resources required for the everyday functioning of the council,” the source said.
Another source said the scandal is the latest to hit the embattled mayor.
"This corruption scandal marks a new low for Mayor Thanduxolo Khalipha, who has recently faced increasing criticism for his administration's handling of public funds. The mayor has not issued any public comments regarding the allegations," he said.
It has been reported that the court ruling in favour of the companies is a significant blow to the already strained credibility of the Khalipha administration. It not only validates the companies' claims but also raises serious concerns about the governance and ethical conduct within the Matjhabeng Municipality.
The source told The Star that the public response to the scandal has been overwhelmingly negative, with many residents demanding Mayor Khalipha’s resignation.
"Critics argue that this incident is symptomatic of a wider culture of corruption that has plagued the municipality for years," he said.
According to the court affidavit, payment of R61 million and interest of 10% per annum, the cost of the suit, and other relief measures are sought by the company.
Attempts to get comment from the mayor were unsuccessful by the time of going to print.