Mahikeng
Henry Smit, the former municipal manager of the Mahikeng Local Municipality, appeared in court recently on charges related to the unlawful sale of municipal land totaling R144 million.
The National Prosecuting Authority (NPA) has announced that Smit is facing multiple charges, including fraud, theft, Contravention of Municipal Finance Management Act (MFMA), Contravention of the Public Finance Management Act (PFMA), money laundering, corruption, and violations of the Prevention and Combating of Corruption Activities Act (PRECCA).
Smit was arrested on Tuesday and subsequently released on bail in the amount of R150,000. The charges against Smit allege that he sold municipal land in 2007 to a company without obtaining council approval and without following the proper competitive bidding process.
The NPA has stated that the company only made a deposit of R5 million for the land and subsequently went bankrupt in December 2011 without paying the outstanding debt to the municipality. The assets of the company were then sold at auction for R16 million.
In April 2012, the new owners of the land changed the name of their company and proceeded to sell and transfer portions of the land to five other companies and a trust account between 2013 and 2015.
Investigations conducted by the Hawks, a specialized unit of the South African Police Service, revealed that the directors and shareholders of these companies had connections to the previously liquidated company. It is suspected that they colluded in order to profit from the irregular acquisition of the municipal land.
Furthermore, it is alleged that the company that acquired the land at auction entered into an unlawful agreement with the Social Housing Regulatory Authority (SHRA) to build 2400 units worth over R301 million. The North West Department of Human Settlements authorized an amount of R54 million for the start of this project. However, the contract failed to materialize as it had not been budgeted for by SHRA.
Investigations also uncovered that more than R550,000 was paid as gratification to one of the suspects, which was subsequently traced back to the purchase of a house for Smit’s daughter. The case has been postponed until December, and further arrests are anticipated.
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