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Plans to build a multi-million-rand golf estate, hotel and conference centre at Kei Mouth have been put on ice by the Great Kei Municipality (GKM) after a scathing report by the province's Auditor-General on the state of the municipality's finances.

The decision comes in the wake of an apparent three-way bungle that has seen three deeds of sale being issued to different entities for exactly the same piece of land.

Results of the hard-hitting AG probe, released in late December, highlighted the land's sale by the municipality, saying that accounting records of the action were possibly "withheld in order to conceal fraudulent activity".

The GKM was planning to sell the property to Bahlodi Housing, a subsidiary of Bahlodi Holdings, which is chaired by South African soccer boss Molefi Oliphant, to develop the "Kei Eco Estate".

The AG's report also stated that apart from the Bahlodi deal, two other deeds of sale were found for the same piece of land.

It further stated that no evidence could be found to confirm that the sale of the land was at any time advertised in a local newspaper as required by law, or that an acceptable process had been followed.

Acting municipal manager Nomboniso Mtwini on Monday confirmed that the proposed development ? estimated to be worth at least R1 billion ? had been put on hold until a council meeting later this month.

"It's been put on hold for the council to check whether due process has been followed," she said. "It has to follow due process."

Mtwini has temporarily taken over the job of former municipal manager Oxley Ngqele, who also featured strongly in the AG report.

According to the report, the land was first sold on May 15, 2006, by a deed of sale signed by Ngqele on behalf of the council for R10 million to local businessman Willie Labuschagne.

However, no record of receipt could be found in the financial records of the municipality, the report noted.

It added that Ngqele had acted without the proper authority of council and as no proper process was followed, the sale is considered to have been irregular.

Labuschagne said he had planned to put up a low impact development there.

He also planned to build a dam and to allow the local country club to extend its 9-hole golf course.

But Labuschagne said: "There were things that bothered me and I told the municipality to go to their attorneys. I said I will deal within the law," he added.

The AG report then noted that an unsigned second deed of sale, also involving Labuschagne, was found in the municipality's files.

The report noted that a deed search done by the AG's office on October 18 last year revealed that the property had in fact not been transferred.

Meanwhile, Johannesburg-based property development marketing company Platinum Planet is still advertising and has already accepted deposits on behalf of Bahlodi Housing.

Bahlodi said it planned to develop 1100 units on the same land.

Labuschagne said he was "flabbergasted" when he heard about Platinum Planet's marketing launch.

"I wrote to mayor Miranda Kema and the municipality, but have not had any reply."

Labuschagne meanwhile has instructed his attorney to take the matter further.

On its website, Platinum Planet advertises the freehold units for prices ranging from R800,000 to R1,5 million, for which a R10,000 deposit is payable.

It said that one of its agents, Zelda Caddie, had already sold 20 units by December.

Platinum Planet's Aletia Bekker said although rezoning had not taken place, the deposits received were put in a trust with Platinum Planet's attorneys.

Daily Dispatch