A 50-year lease that was signed for the construction of a shopping complex in Kuruman, on municipal land owned by Ga-Segonyana Local Municipality, has been reported for investigation by the Specialised Commercial Crimes Unit.
A 50-YEAR lease that was signed for the construction of a shopping complex in Kuruman, on municipal land owned by the Ga-Segonyana Local Municipality, has been reported for investigation by the Specialised Commercial Crimes Unit.
According to the agreement, the lease that was concluded on July 1, 2018, for a period of 30 years, would automatically be renewed for a further 20 years on the expiry date.
The monthly rental for the three-hectare piece of land in Kuruman was set at R120,000 per annum (R10,000 per month).
The chairperson and head of the legal unit of the Northern Cape Civics Organisation, Ross Henderson, said the company that was awarded the long-term lease was a copy shop based in Kuruman.
“It did not have the financial capacity or expertise needed to develop the land,” said Henderson.
He stated that the service provider’s core business was the sale of stationery, textbooks, toiletries, cleaning supplies and photocopying and office equipment.
“The developer entered into a joint venture with a company based in Klerksdorp to build a shopping mall on the former railway grounds,” said Henderson.
“A number of small businesses operating on the grounds pay monthly rentals of R96,000 to the municipality, as opposed to the R10,000 that it would receive from the lessee.”
Henderson stated that the lease was later ceded to another company that shared the same director.
“A false affidavit was made under oath to conceal the true identity of this director, who allegedly acted as a front for the company,” Henderson claimed.
“The conditions of the agreement do not permit the lease to be ceded to another company without the consent of the municipality.”
He added that the development could not proceed due to an ongoing court battle to prevent the eviction of the small business owners.
Henderson believed that a senior official at Ga-Segonyana Municipality had failed in his duties to prevent “unlawful conduct”.
“He actively participated in allowing the lease to be ceded and in the registration of the notarial lease.
“A special power of attorney was signed by the municipality on behalf of the company to appoint a firm to cancel the existing leases of tenants on the land and evict the occupiers, without a council resolution.”
Henderson reported that he had contacted the Department of Co-operative Governance, Human Settlements, and Traditional Affairs (Coghsta). According to his claim, Coghsta informed him that the municipal official’s approval of the unlawful lease cession violated municipal asset transfer regulations.
“The legal adviser promised to investigate our concern, which until now seems not to have happened.
“Under these circumstances, we will bring an application in the public interest to review and set aside the unlawful cession.
“We cannot allow a situation where government condones this kind of unlawful conduct where officials show no respect for the rule of law.”
A spokesperson for Coghsta, Babalwa Mzambo, stated that the head of legal services, Frank Mashilo, was unable to confirm any record of being questioned about this matter.
“The MEC is prepared to address any enquiries or concerns directed towards him and will comply with any court summons if necessary,” said Mzambo.
She added that the department could not comment on the lease agreement as it was a matter between the municipality and the lessee.
Hawks provincial spokesperson Lieutenant-Colonel Tebogo Thebe confirmed receipt of the docket from the Kimberley SAPS on July 30.
“The docket still has to undergo internal processes to determine whether to investigate the matter and to designate to which unit the allegations fall in line with our mandate,” said Thebe.
A legal representative for the company, Justus van Heerden, said that while he was not aware of any criminal charges, his clients would offer their full co-operation with any investigation.
He stated that the “unlawful occupiers” of the property had not succeeded in appealing an urgent eviction notice that was obtained in the Northern Cape High Court in 2021.
“The application involving a fence that was erected around the property was also dismissed with costs. The eviction application is currently the subject of a petition to the Supreme Court of Appeal.”
Van Heerden added that the cession of the lease agreement formed the subject of a review that was also dismissed with costs in court in 2022.
“The dismissal of the review application was not appealed and the land occupier abided by the court’s decision.
“At no point did our clients act unlawfully or deliberately withhold information from the court, as alleged. The occupants of the property raised their allegations in open court and were found to be without merit, as supported by the judgments.”
He stated that his clients had at all times acted “openly and honestly”.
In court papers dated 2021, Zinvomax (Pty) Ltd related that the unlawful occupiers had delayed the development for approximately four years, while building costs had escalated and the cost of steel had increased by 60 percent.
It stated that it could have been deriving rental income had it not been for the delays, while it would not be able to recover its losses.
The company had bound itself to deliver occupation by 2025 or suffer penalties, lose secured tenants of the shopping complex and suffer reputational harm.
It described the illegal occupants as “commercial squatters”.
Ga-Segonyana Municipality did not respond to media enquiries by the time of publication.
