22 November 2012

South Africa: Department Working With Banks to Stamp Out Housing Corruption

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

press release

The Banking Association South Africa and the Gauteng Department of Local Government and Housing have agreed on a partnership to co-operate as the department continues to investigate cases involving the illegal sale of state-owned land in Lenasia South.

The co-operation agreement follows discussions which further revealed that at least 10 mortgaged properties affected by the demolitions 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" commented Association's General Manager for Human Settlements Mr Pierre Venter.

The parties have agreed to centralise the investigations of the affected loans within the departmental Anti-fraud and Corruption Unit. "The department is expect to exclude the properties from the list of houses earmarked for demolitions, and in cases where fraud is suspected, the province in collaboration with the HAWKS will undertake further investigations," commented the departmental HOD Mr Mongezi Mnyani.

The banks have also committed to conduct their own investigations utilising their internal anti-fraud departments to ensure that their mortgage officials are 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," added Mr Mnyani.

The Banking sector has 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 where complicit in the processes of illegally occupying land. "After our meeting we discovered that these statements had no element of truth in them," concluded Mr Venter.

The Banking Association South Africa and the Gauteng Department of Local Government and Housing have agreed on a partnership to co-operate as the department continues to investigate cases involving the illegal sale of state-owned land in Lenasia South.

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