News / South Africa / State Capture

Makhosandile Zulu
3 minute read
13 Aug 2019
4:50 pm

Zondo calls for probe into auctioning of municipal livestock, farming equipment

Makhosandile Zulu

A witness says the auction happened in 2011 and the trust that leased the municipal-owned farm was subsequently dissolved.

File image: Dairy cows on the Vrede dairy farm in the Free State. Picture: Neil McCartney

The chairperson of the Commission of Inquiry into State Capture, Deputy Chief Justice Raymond Zondo, has urged that “steps should be taken” to probe whether corruption occurred when livestock and farming equipment on a farm owned by a municipality in the Free State was auctioned off.

Parts of the farm was later used for the Vrede dairy farm project.

The commission is hearing testimony on the project which was used to siphon off millions of state funds through the Gupta-linked Estina Pty Ltd.

On Tuesday, former Phumelela municipal manager Moses Moremi told the commission that during his time as the municipality’s chief financial officer (CFO) in 2011, one of his roles was to account for all the assets, expenditure and revenue of the municipality.

Moremi served as CFO until his appointment as the municipal manager in May 2012, which coincided with the establishment of the Vrede dairy farm project, the commission heard.

As CFO, Moremi unsuccessfully sought to obtain audited financial statements of the trust which leased the farm, the commission heard.

The trust was established in 1993 by the municipality’s councillors at the time who were its trustees, the commission heard.

“It was actually operating as a trust for the community by that time,” Moremi said, adding that council at the time then took a resolution to lease the farm for a period of 99 years.

The farm had livestock, farming equipment “and everything was there”, the commission heard.

“When I started requesting financial information … asking for the audited financial statements and the records from the accountant then, I found it very difficult to get those particular records because I had to make it a point that we account for the revenue from that particular farm,” Moremi said.

The trustees subsequently took the decision to auction off the livestock on the farm and the farming equipment without involving the municipality and its officials, Moremi said, adding that at a later stage the trust was dissolved.

“Even when I left in 2014 there were no audited financial statements for that particular trust,” Moremi said.

Moremi told the commission that another difficulty he encountered was determining whether the said councillors’ trusteeship was terminated when their term of office came to an end, or if the initial trustees continued in their role well beyond serving on the council, failing also to obtain a copy of the deed of trust.

An amount of R8 million was paid into the municipality’s account after the auction. However, the municipality did not know how this figure was calculated as it did not have the details on the auctioned goods, their quantity and value, Moremi said.

Moremi said he did inform the municipality’s then-mayor, John Motaung, about these difficulties.

Moremi said an “Afrikaans article” in an Afrikaans newspaper had been the only public notice he came across, which he said was evidence that the auction “was just not opened to everybody”.

Zondo said considering the number of years since the establishment of the trust “it was very strange” that there was no documentation for the trust.

“I could not get anything,” Moremi said, adding that he had been bothered that “such an important asset of the municipality” did not have any records.

Zondo: “Well, the matter should not rest there. Steps should be taken to see whether there may be any corruption involved in regard to that because the commission has to look at issues of corruption.”

Moremi said following the auction, only the farm was left, which he estimated to be valued at close to R30 million.

The farm is 4,439 hectares big and includes the Thembalihle township and Vrede town.

ALSO READ: Zwane did not present Vrede dairy project proposal at council meeting, Zondo hears

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