Former municipal manager, Advocate Bheki Khenisa, has clapped back at veiled insinuations by his replacement, Mandla Mnguni, in the latter’s exclusive interview with the Middelburg Observer last week, saying that when he left the municipality, there was more than R500m in municipal reserves.

Mnguni claims that when he returned to the municipality in 2022 after his resignation in 2018, municipal reserves were depleted, with Khenisa vehemently denying it, saying he was exiled for not giving in to employee demands of higher salaries and perks.

Mnguni’s allegations came as a response to allegations that he authorised R1b tenders to electrical contractors for kickbacks including a farm and luxury house in Aerorand, as well as a helicopter. He vehemently denies the ‘defamatory and baseless’ allegations, urging his accusers ‘with proof, to approach the SAPS.’

Khenisa said that when he approached the bank for a loan to fund capital projects like pipe replacements, the Mhluzi substation and establishing the Dennesig North suburb, the municipality’s reserves had formed part of the loan structure as collateral.

Khenisa said the terms of the loan were agreed to between the parties at prime rate, on the basis that Dennesig North stands be sold within a year, at market value, which had also received a stamp of approval from the National Treasury.

The Dennesig North township would have generated revenue for the municipality much sooner if the municipality had stuck to the terms.

The failure resulted in unnecessary interest on by-annual instalments to settle the loan, severely impacting the municipality’s cash flows, resulting in a qualified audit.

The dire cash flow situation also resulted in three late payments to Eskom last year, resulting in the municipality being slapped with penalty fees of more than R200 000.

Meanwhile, Dennesig North stands had been sold at a 50% discount, with properties ringfenced for municipal staff and councillors.

Khenisa said the loan would have paid itself out evenly, had the municipality followed the terms.

According to Khenisa, he was outlawed by municipal personnel after refusing to bump their salary grading from four to six, resulting in a series of violent strikes, which came to a fatal blow in August 2022 with the civic centre shootings, claiming the life of municipal electrician Tshepo Maseko by a trigger-happy security guard. Nqubeko Brian Mchunu has since been convicted and sentenced to 25 years for murder and attempted murder.

“I warned at that stage that the municipality would reach a point where the money coffers would run dry,” Khenisa told the Middelburg Observer this week.
Khenisa said the municipality actually regressed from consistently clean audits during his tenure to qualified audits since his departure.

According to him, there are no skeletons buried under the Mhluzi substation, with more and more councillors agreeing.

According to Khenisa, a thorough tender audit needs to be done, and legal opinions reviewed, in regard to the appointment of electrical service providers since his departure.

Khenisa’s denial of financial irregularities with the substation’s construction was bolstered by a number of reliable sources within the council this week, after forensic investigators presented their initial findings to the council during a closed sitting last week.

“It was underwhelming,” one councillor told the Observer, while another questioned why money had been spent on external forensic probes ‘when the matter is dead and buried and there’s no definitive proof of criminality’.

Sources said the presentation basically parroted the Auditor General’s findings, reported on by the paper two weeks ago.

Nowhere in the presentation was there any indication of widespread theft, bribery or corruption, but simply that the municipality erred in appointing a contractor with a lower grading than the grading approved by the government on an outdated circular.

Mnguni conceded that Dennesig North remained a hotbed of corruption, alongside stand sales at Rockdale and Kwazamokuhle.

The first Dennesig North stand sale raffle was halted by members of the community who accused the municipality of rigging the draw.

Mnguni said investigations are ongoing.