The beleaguered Great Kei Municipality faces another financial shock as the developer of a proposed multi-million-rand golf estate at Kei Mouth prepares for legal action.

If a lawsuit against the municipality is pursued by the developers, Bahlodi Housing, it will be the second one this month based on bad property deals with the cash-strapped council.

Last week the municipality's custom-made furniture was attached after an execution order was granted to Kei Mouth businessman Willie Labuschagne, who is trying to recover R1.5 million following the collapse of a real estate deal.

In both cases the agreements fell apart after criticism of the transactions by the Eastern Cape Auditor-General (A-G).

Yesterday, Bahlodi chief operations officer Glen Taaibosch said he would meet his lawyers this morning to discuss the prospects of legal action.

"I am tired of being moved from pillar to post by the incompetency from the municipality's side."

He said Bahlodi obtained land from the municipality for the golf estate development in terms of a land availability agreement. "We have to pay to provide the services and the upgrading of the water and sewerage network."

Bahlodi paid for the design of the golf course, the environmental impact assessment and for advice from various other experts.

Taaibosch would not specify the amount he intended claiming from the municipality, but said it was "substantial".

"To have a golf course designed costs about R2 million."

Earlier this year the municipality's lawyers wrote to the Great Kei council and advised it to inform Bahlodi and Labuschagne the deeds of sale were "unenforceable and void" because council approval for the sale of the land was not obtained.

The advice followed a report by the A-G slating the agreements with Bahlodi and Labuschagne.

Taaibosch, however, contested the A-G's report. "We did not buy the land. We offered the municipality R10 million as a development contribution."

In a further twist to the saga, Labuschagne has instructed his lawyers to prepare another summons, this time in connection with a R10 million deed of sale signed with the Great Kei Municipality last May to buy two farms for a property development.

Despite the A-G's report, which said there was no evidence that the sale of this land was advertised or that council approved the sale, Labuschagne insisted he bought the farms in 1995 through a closed corporation following a council resolution.

"I am planning to personally serve the summons on the council and will give it seven days to respond," said Labuschagne.