Ex-council pair deny getting kickbacks in office block deal

2013-03-12 00:00

TWO former uMgungundlovu district councillors have denied any wrongdoing in connection with a 2003 property deal for which they face fraud and corruption charges in the regional court.

The state alleges Lucky Moloi and Alpha Shelembe colluded with others to persuade uMgungundlovu Municipality to buy the MIB building situated in Langalibalele (Longmarket) Street — for use as office and parking space — at an “inflated” asking price of R6 850 000.

Each of them allegedly received R200 000 as “commission”.

Shelembe and three other co-accused, Thembinkosi Xaba, Nelisiwe Shelembe and Joyful Shelembe, pleaded not guilty to further charges of money laundering linked to the transaction.

Magistrate Jaco Jordaan was told that two former co-accused in the case, estate agent Neville Watts and another ex-councillor, Themba Zungu, died before the trial began.

Watts — who was expected to give evidence for the prosecution after striking a deal with the state last year — died just weeks ago, the court heard.

Part-owner of MIB House, Gavin Breetzke, gave evidence yesterday that Watts was the person who had approached him asking if he and his partner, Eric Hobson (who lived in Australia), would consider selling the property to uMgungundlovu Municipality.

They agreed to do so.

Breetzke said the asking price at that stage was R6 000 000, plus R500 000 commission.

Subsequently, he said, Watts told him he required the commission to increase to R650 000 or 10% of the total price.

Later, Breetzke said, Moloi informed him at a meeting in the boardroom at Mason Incorporated attorneys that the price had been increased by a further R200 000 “in order to increase the commission to them”.

Moloi denied this in a statement setting out his defence.

He said he was part of a task team negotiating the sale price for MIB House, which the executive council had resolved to buy instead of the Telkom building, which was initially identified for parking.

He denied he was instrumental in, or had recommended, the purchase of MIB House to council.

“I deny further that the mayor and I met with Breetzke and that I suggested that the price be increased from R6 500 000 to R6 850 000 and that I indicated that the extra amount was for commission,” he said.

Moloi also admitted in his statement that he had received a cheque for R200 000 from Watts, drawn on the account of Cenpark Partnership, but said this money was paid in settlement of a debt Watts owed him.

In his statement to court, Alpha Shelembe denied he had made any representations to the council in respect of MIB House, “save to move for its acquisition based on a caucus decision”.

Shelembe admitted having received six post-dated cheques from the late Themba Zungu, drawn on the account of D B Consultants, but said the money was repayment for a R350 000 loan he gave Zungu.

Shelembe said he had paid five of the cheques into the family business, Joy Catering and Hire Services, owned by him and his wife, Joyful Shelembe.

The sixth he paid into the account of his sister, Nelisiwe, as she had asked him for money to carry out a traditional ceremony. He said he did not tell either women the source of the money because he didn’t think it necessary.

Shelembe’s wife and his sister confirmed this in their statements and denied having any intention to commit money laundering.

Xaba admitted in his statement that he had received three cheques from Themba Zungu in 2003, but said these were salary payments for working as his bodyguard and driver.

One payment was a refund for repairs to Zungu’s motor vehicle which had broken down in QwaQwa, which he had paid for.

The case is proceeding.

• ingrido@witness.co.za

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