uMngeni: more questions

2011-02-03 00:00

YESTERDAY’S sitting of the commission of inquiry into the affairs of the uMngeni Municipality, chaired by advocate Vusi Khuzwayo, saw continued questioning of the municipality’s chief financial officer, Bertus van der Merwe.

Questions from the commission’s evidence leader, Paul Schumann, further explored the possibility of a conflict of interest arising from legal firm Venn, Nemeth and Hart’s (VNH) relationship with the municipality. The firm is the municipality’s legal adviser and debt collector and some of the firm’s partners are also property developers in the area.

A rates dispute with Gowrie Estates, of which Guy Smith, a partner in VNH, is the developer, over whether rates should be levied on unsubdivided land resulted in Gowrie Estates becoming a debtor to the municipality.

Schumann asked Van der Merwe if he did not see a problem with the same attorneys representing both parties in a such a dispute. Van der Merwe said the matter would not have gone as far as litigation. When Schumann pointed out the dispute had gone on for five years, Van der Merwe explained that advice on the matter had to be sought. Schumann again queried the lengthy time period, pointing out that no other such dispute had been so protracted and that normal process would have required that legal action be taken. This did not happen in this case, he suggested, due to the relationship with VNH.

Schumann said the normal process in a rates non-payment would be to hand over the debtor to the debt collection service where the usual strategy in the case of a dispute would be to obtain a “good faith” payment until the dispute was resolved. Given that Smith, the developer of Gowrie Estates, is also a partner of VNH, Schumann asked if it would not have been logical to contact another legal firm then available to the municipality. “That’s your view, sir,” replied Van der Merwe.

Van der Merwe denied Schumann’s suggestion that Gowrie Estates and other developments with VNH connections were given favoured treatment not extended to other ratepayers. He also denied the suggestion from Schumann that VNH had enjoyed “favoured treatment” since their appointment to be the municipality’s debt collector in 2008.

Questions were also asked about the procurement process or lack of it that led to VNH’s being appointed to this role. Van der Merwe said he had no idea why it was decided not to seek tenders.

Senior counsel Gerhard Roberts, representing VNH, indicated he would like to question Van Der Merwe again on matters that had arisen from the cross-examination by Schumann.

Proceedings were adjourned early and will resume tomorrow at 9 am at the uMngeni Municipality council chamber to allow Van Der Merwe time to consult documents that have been added to the record that he will be questioned on.

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