Investigating officer Deon de Villiers said in evidence on Tuesday during the murder trial of her boyfriend Fred van der Vyver, that he had been told on April 19 2005 of Werner Carolus's confession.
De Villiers said Carolus's confession concerned "a young woman who regularly bought drugs from us" and whom they had followed.
De Villiers said in his testimony in the Cape High Court that Carolus had pointed out the Shiraz complex in Welgevonden, Stellenbosch.
"He could point out the complex but not the flat."
Knife, pair of scissors seized
After interviewing Carolus, said De Villiers, he had come to the conclusion that there was no link between whatever Carolus may have done and the murder case that he was investigating.
De Villiers said he had interviewed everyone implicated by Carolus - including a woman named Eleanor, who was implicated when Carolus witnessed a crime.
Their fingerprints were nowhere to be found in Inge's flat.
Carolus had indicated that the murder weapon was hidden in Krige Street, Stellenbosch, and a search was conducted.
A knife and a pair of scissors were seized and a certain Jaco Swanepoel's car was searched for leads, said De Villiers.
A remote-control mechanism that De Villiers had seized and taken to the people who'd been involved in the Shiraz development, did not correspond with the mechanisms that opened the gate or unlocked the complex.
De Villiers testified that he had discussed the matter with director Attie Trollip, who was co-ordinating the murder investigation.
Carolus later confessed that he had lied about it.
Concocted a pack of lies
"Now why would someone lie about something like that?" asked Judge Deon van Zyl.
De Villiers said it appeared that Carolus had been involved in a drug deal and that, after being assaulted, he wanted to get revenge on someone.
Carolus is serving time in jail at present.
According to De Villiers, Carolus had concocted a pack of lies in his sworn statement.
Once the Inge Lotz case had been finalised, there would have to be a further decision about whether or not the police would go after Carolus for obstructing the course of justice.
In the testimony given in February by sergeant Peta Davitsz, a police forensic expert, the court heard that there were traces of blood of another possible suspect on the knife, and that person's house had been searched by the police.
Van der Vyver's defence team had placed it on record that the knife had been found.
During cross-examination by advocate Dup de Bruyn SC for the defence, he put it to the investigating officer that other people had made statements to the effect that Carolus had admitted to murdering Inge.
De Villiers replied that Carolus had not killed Inge, "but a person".
"But a student in the complex? asked De Bruyn.
De Villliers replied that it was not stated that Carolus had killed Inge.
Witnesses went home to Mozambique
The last witnesses to have seen Inge at her flat were employees of Quick Con Construction, but they could not be traced by the police.
De Villiers said on Tuesday that the company had been liquidated and that the temporary employees had returned to Mozambique.
According to the defence, they had important information, because they could give the time that Inge was at her flat.
The case continues.