African Eye News Service (Nelspruit)
Sizwe Samayende
10 June 2003
Ermelo — Controversial Msukaligwa municipal manager Thamsanqa Nkosi has been suspended ahead of a probe into misuse of taxpayers' money in Ermelo.
Nkosi's suspension follows media reports that he masterminded a rewrite of the council's vehicle loan scheme to enable himself and senior officials to use tax funds as a 'private bank' to grant themselves extremely low interest loans.
Msukaligwa mayor Silas Nkonyane confirmed the suspension but declined to comment or indicate what charges had been laid against Nkosi. Leaked documents indicate that Nkonyane authorised the rewrite of the scheme, however.
"We can't comment now," was all Nkonyane could say on Tuesday.
Nkosi also declined to comment but earlier admitted that he engineered the rewrite on the city's existing car loan policies, so that he could deposit a R240 000 car loan directly into his personal account.
In the past, money was paid only to registered car dealerships or vehicle finance banks like Wesbank to prevent possible corruption.
Documents and bank records indicate that Nkosi had the money deposited directly into his personal account, and then used only R145 000 to buy a second-hand bakkie while he pocketed a cool R95 000 in change.
He refused to say what he used the R95 000 for but insiders claim that he used it to build himself a house in Ermelo.
The scheme also allows Nkosi to repay the loan to council at only 8% interest.
This is less than half the 17% interest that normal South Africans are charged for bank or personal loans of a similar size. The taxpayer is therefore subsidising Nkosi's loan.
It is not clear whether the tax benefits created by the scheme have been reported to the SA Revenue Service.
Nkosi declined to explain, however, why there was no council resolution approving the alterations to the loan policies or whether the changes had been approved by government financial experts.
Nkosi said that the council was not at risk of losing the money because it can lay a claim on his estate.
The corruption story however doesn't end with Nkosi's loan scheme.
Private forensic auditors from PriceWaterhouseCoopers are investigating the municipality on a myriad of corruption and nepotism allegations.
The auditors are acting on the instructions of Mpumalanga local government MEC Mohammed Bhabha. A report has not yet been officially handed over to Bhabha.
The investigation is probing alleged links between councillors and senior managers suspected of corruption that includes irregular awarding of tenders, embezzlement of public funds, nepotism and favouritism in the allocation of state-subsidised houses.
Mpumalanga's South African Local Government Association (SALGA) chairman Jimmy Mohlala has said that SALGA was currently trying to design a single standardise vehicle loan scheme for all municipalities to "avoid discrepancies".
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