23 November 2012

South Africa: Gauteng, Banks to Stamp Out Corruption in Lenasia

Photo: UN Photo/Eric Kanalstein
Demolished Homes (file photo): South Africa's govt promises to build low cost housing in Lenasia.

Pretoria — The Gauteng Housing and Local Government Department has entered into a partnership with the Banking Association of South Africa to stamp out cases involving the illegal sale of state-owned land in Lenasia, south of Johannesburg.

The co-operation agreement follows discussions which further revealed that at least 10 mortgaged properties affected by the demolitions of structures in Lenasia are registered on the books of the members of the association.

"The affected loans are currently being investigated by the banks. Most of the loans date back to the 1990s and all, at face value, appear to be normal commercial transactions. We have therefore raised the matter with the department in order to find an amicable solution," said the general manager for human settlements at the Banking Association South Africa, Pierre Venter.

The parties have agreed to centralise the investigations of the affected loans within the department's Anti-Fraud and Corruption Unit.

Gauteng Housing and Local Government Head of Department, Mongezi Mnyani, said the department expected to exclude the properties from the list of houses earmarked for demolitions. In cases where fraud was suspected, the province in collaboration with the Hawks will undertake further investigations.

The banks have also committed to conduct their own investigations utilising their internal anti-fraud departments to ensure that their mortgage officials were not complicit in the suspected fraud.

The parties have also agreed to form a joint task team in order for the financial institutions to be provided with information of future "clean ups" by the department.

"The process is critical as it will allow the financial institution to scrutinise affected properties before any state action is undertaken," said Mnyani.

He said the banking sector had given the department a commitment to support them in their efforts as it fully supports the need for law and order to prevail and that transgressors should be brought to book.

The joint initiative comes after residents of Lenasia claimed that they have mortgage bonds from banks on their properties, in the process misleading the Premier and the MEC to believe that bankers were complicit in the processes of illegally occupying land.

However, Venter said after their meeting with the department they discovered the statements had no element of truth in them.

More than 80 houses have reportedly been demolished in Lenasia since last week.

The department said it had identified 113 houses in the area, which it said were illegally built on land intended for government houses. Government argues that the land was sold to the occupants illegally.

The department said this week that investigations by the Anti-Fraud and Corruption Unit revealed that fraudsters sold several stands ranging from R2 500 to R95 000 and issued buyers with fraudulent deeds of sale which bore the department's official logo.

This week, Cabinet instructed Human Settlements Minister Tokyo Sexwale to urgently interact with the Gauteng Provincial Government to find a solution to the eviction of people from houses allegedly built illegally in the area.

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