Former municipal manager in court for ‘unlawful sale’ of municipal land

Former municipal manager of the Mahikeng Local Municipality, Henry Smit, has appeared in the Molopo Magistrate’s Court on charges related to the unlawful sale of municipal land to the value of R144 million.

According to the National Prosecuting Authority (NPA), Smit is facing charges of fraud, theft, Contravention of Municipal Finance Management Act (MFMA), four of the Prevention and Combating of Corruption Activities Act (PRECCA), two of Corruption, money laundering and Contravention of the Public Finance Management Act (PMFA).

He was arrested on Tuesday and granted R150 000 bail.

The NPA said Smit allegedly sold the municipal land in 2007 to a company “without council approval and further ignoring the competitive bidding process”.

“The said company only paid R5 million as a deposit to purchase the land. Investigations reveal that the company went into liquidation in December 2011 without paying the municipality the outstanding debt. The assets of this company were subsequently sold to another company for an amount of R16 million at an auction.

“In April 2012, the new owners of the land changed their company name, and between 2013 and 2015 they sold and transferred portions of the land to five other companies and a trust account.

“Investigations by the Hawks revealed that directors and shareholders of these companies had links to the company that was liquidated and they acted in common interest in illegally making gains from the municipal land that was acquired irregularly,” the NPA said.

Also, it is alleged that the company bought the land at auction and went on to enter into an “unlawful agreement with the Social Housing Regulatory Authority (SHRA), to build 2400 units at the value of over R301 million”.

“An amount of R54 million was allegedly authorised by the North West Department of Human Settle for the start of the project. This contract, however, failed to materialise, as it was not budgeted for by SHRA.

“Investigations also revealed that an amount of over R550 000 was paid as gratification to one suspect and it was further traced to a purchase of a house to the accused’s daughter,” the NPA said.

The case has been postponed to December and more arrests are expected.

Source: South African Government News Agency