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By Sipho Masondo

A forensic investigation into the failed sale of the controversial R120-million Jeffreys Bay Golf Course has uncovered an intricate web of deceit, possible corruption and wholesale flouting of procurement policies by Kouga municipal officials.

The damning allegations against the municipality are contained in a forensic investigation conducted by the auditor general at the request of the Eastern Cape local government department.

The department initiated the investigation following a huge public outcry that the sale of the golf course was possibly corrupt and flawed in every respect.

Now the municipality is seeking legal opinion and possible action to be taken against two senior municipal officials who were involved – town planning director and former municipal manager Fred Dennis and legal adviser Japie Jansen.

On December 19, 2006, the Kouga municipality entered into an agreement with Molweni Development to sell five erven, including the Jeffreys Bay Golf Course.

However, nine months later, in September 2007, municipal manager Eddie Rankwana cancelled the sale following Molweni‘s failure to pay a 10 per cent deposit of R12-million as required by procurement policies.

Following the cancellation of the sale, the investigation was initiated, and among others it reveals that:

Molweni was not registered with the Registrar of Companies.

The company registration number and tax clearance certificates as provided in the agreement of sale had the registered name of another company, Bulela Property Co (Pty) Ltd, with prominent Nelson Mandela Bay businessman Stephen Dondolo, controversial Jeffreys Bay property guru Petrus Hancke, Yusuf Ismail Adams and Joseph Mlandeli Tshume as directors.

Dondolo was a 40% shareholder in Molweni, while Tshume was a director and shareholder of Dreamworld Investments, a company which owned 20% shares in Molweni. The remaining 40% were owned by Absa Bank.

Tshume had a conflict of interest in that he did not declare that his wife, ZG Tshume, worked as a creditor‘s clerk for the Kouga municipality, while his brother Michael was a councillor at that time.

Had the sale gone through, the municipality would have sold a public road on one the five erven.

Molweni did not submit audited financial statements, and its ability to execute the contract was not evaluated.

Kouga mayor Robbie Dennis said the municipality was already seeking legal opinion against his cousin Fred and Jansen.

Dondolo said he had sold his Molweni shares to other people.

The report also urged action against Fred Dennis for failing to implement the supply chain management policies in respect of another tender – the municipal evaluation services tender.

On December 11, 2006, the municipality awarded the R12-million municipal valuation services tender to KCV, a company of which Fred had previously been a director. Fred had at that stage resigned from KCV, but he was acting municipal manager, and director of town planning.

On January 31, 2007, Dennis resigned as town planning director. A day later, on February 1, 2007, he became a founder member of a valuating firm. In February last year he was reappointed town planning director, while still belonging to the firm.

Source: The Herald