uMngeni: DA councillor vindicated

2011-07-08 00:00

DEMOCRATIC Alliance councillor in the uMngeni Municipality, Tim Lindsay-White, was not entirely wrong.

If there were inaccuracies in the evidence he provided to the Commission of Inquiry into the affairs of the municipality, the blame lay with senior officials and the “shambolic administration of the finance department”.

This summing up by evidence leader Paul Schumann was accepted by Venn, Nemeth and Hart (VNH) director Guy Smith during cross examination yesterday.

Earlier, mudslinging gave way to more subdued proceedings. Schumann said Lindsay-White took exception to statements made by Smith saying that his evidence was inaccurate and defamatory. Lindsay-White in turn felt that Smith had defamed him.

Smith replied it might be regarded as per se defamatory, but not necessarily actionable. Commissioner advocate Vuzi Khuzwayo responded: “That’s the advantage of having lawyers around”.

Evidence emerged that:

• Because senior officials withheld information, it was reasonable for Lindsay-White to question whether there was a conflict of interest with regards to VNH’s role in the municipality, where it was legal adviser, debt collector, property developer and rates debtor. Similarly, it was not unreasonable for residents to ask the same question.

• The report presented to the commission by Lindsay-White was not a witch-hunt, but came about because the uMngeni Municipality stared bankruptcy in the face.

Schumann said that when KZN MEC for Co-operative Governance and Traditional Affairs (Cogta), Nomusa Dube, instituted the commission of inquiry, she also ordered that it put its financial affairs in order.

Two committees were formed — credit control and valuation. Lindsay-White was on the valuation committee, which looked at the income coming into the municipality. Rates came under the spotlight because they formed the bulk of the income. It was in this context that the valuations of properties and the valuation roll were examined and problems across the town — including on major VNH-linked developments Gowrie Farm, Gowrie Village and Garlington — were picked up.

With the dearth of information available, the committee had to do its own research into the ownership of the properties. Information in Lindsay-White’s schedules to the commission came from the Master’s Office.

The information on debtors to the municipality and the amounts owed came from the finance department.

Smith said all senior officials at the municipality knew he was involved in the developments.

However, Schumann added, “Yes, they were aware that you were involved, but you could have been the agent and not necessarily the owner”.

However, according to Smith, chief financial officer Bertus van der Merwe knew he was an owner.

Schumann noted that Smith himself went to a great deal of effort to resolve the problems he encountered with regards to claims on the property. This was not communicated to the credit control and valuation committees.

“Unfortunately the very people entrusted to sort out the problems you were encountering were kept in the dark by the administration,” he said.

To compound the problem, when the valuation committee called for information from the VNH debt collection call centre on monies owing, the information they received was that the call centre did not know about the ownership of the property in question.

A note on one of the queries said, “suspected that Guy Smith owns the property”.

Schumann noted it was correct to say that ownership of the Gowrie Developmnent was not clear, as it is evident that VNH’s own staff did not know.

Smith’s statement that the municipality would eventually collect the rates once transfers are done, was cold comfort for a municipality struggling with a cash flow crisis, said Schumann. He added that a positive outcome was that Lindsay-White’s efforts paid off as the town’s rates base increased by R7 million.

Both parties agreed to disagree on some of the disputes. Lindsay-White placed on record that he did not accept that he was inaccurate on several of the disputes listed in his schedules.

However, the commission was not the forum to resolve rates disputes.

Senior counsel for VNH, advocate Gerhard Roberts, summed up the situation. He said it would seem the entire problem was the result of a breakdown in the relationship between councillors and senior officials.

“If the officials had given the councillors all the information that Mr Smith had to collate, as well as the letters and addresses, we might have not been here today,” he said.

The commission was adjourned to September.

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