It should be simple to prosecute the perpetrators (because there is always a paper trail) and jail them too. Not just the buyer or the seller, but every single person who was a party to the fraud.
Last week officials within the Johannesburg Council admitted that 33 tracts of prime land had been sold without its knowledge. Four companies, some of which have shared directors, bought land that includes Norscott Koppies and the Kingfisher Nature Reserve in Sandton.
One of the companies allegedly involved in these fraudulent transactions, Zambrotti Investments 31, apparently paid just R7m for the reserve and the park even though the land is actually valued at almost R26m.
Zambrotti apparently bought the land from Eildoug Investments which had bought it from the Council.
The Mushroom Park Farm in Sandown was sold for just R1,1m and 4,000sqm of the Ernest Ullman Park was sold for R700K. According to an article published in The Star last week, Zambrotti Investments 31 bought Stand 730 in Fourways from Eildoug on February 25 this year and paid just R2m for it.
Curiously, Eildoug appears to have bought the land from the municipality at the same price on February 24. There are two different title deed numbers for the transactions but the property was nevertheless registered to both companies on the same day.
In the case of Stand 721 in Plover Street, Fourways, it was sold by Eildoug to Zamien Properties on March 15 for just R5m. Eildoug had bought it from the council for the same price, well below the market value of R11m.
Zambrotti and Zamien share directors and both companies appear to have links to another development company, Abalengani, which allegedly owes Investec more than R1bn. Agalengani’s director, Zunaid Moti, allowed part of the company to be put into provisional liquidation in January this year. Curiously enough, Moti is listed as a director of Zambrotti and Zamien.
Salim Bobat, a director of Zambrotti and Zamien, has confirmed that his companies bought the properties from Eildoug Investments, but says that he didn’t know that the prices were below market value.
The Joburg Property Company (JPC) handles the sales of land on behalf of the council and it was apparently aware that certain illegal sales and transfers of council land were done by people claiming to act as agents for the council.
Like any government body there is apparently a rather bureaucratic process with land sales as the council must first resolve that the land can be sold or leased, then the sale must be approved in terms of the procurement processes and must be approved by the executive adjudication committee of the council, according to JPC’s managing director, Helen Botes.
She says the council is applying for court orders to have the fraudulent land sales overturned and has contacted the Deeds Office to stop any further transfers.
Something extremely fishy is going on. For instance:
- The claim by Bobat that he didn’t know the land he was buying was sold at below market value is nonsense. Anyone who puts down R7m in two transactions must have an extremely good idea of what he’s buying and what sort of bargain he’s getting;
- How is it possible to get the transactions through the Deeds Office in just one day? Bobat says the transfers were handled by Peet Viljoen Attorneys in Pretoria.
Well, to lodge papers at the Deeds Office and get transfer in a single day must be some kind of new record. It certainly does seem rather odd considering that there are currently delays of up to three months on transfers at the Deeds Office. Evidently someone knows someone who is very helpful.
- How did Eildoug manage to get its hands on the properties (using allegedly fraudulent signatures) and sell them on without thinking that, just maybe, the paper trail would lead back to some illegal transaction?
- Why did it take the JPC more than three months to find out about these transactions? Surely R7m in land sales is not so insignificant that it was “missed”?
There are lots of questions that must be answered and hopefully the full details of these shady, illegal and highly questionable deals will all come out in the courts in due course. However, I think that courts (and the investigators) need to take a much tougher line when it comes to “white collar crimes” such as these.
Crime is a scourge in our society and I don’t care how you couch that crime (violent, non-violent, petty or massive), because it still needs to be stamped out. And the only way to do that is to:
a. Prosecute all parties to a fraudulent transaction (whether it is the agent, the buyer, the seller, the transferring attorney or the clerk in the Deeds Office);
b. Ensure that jail terms are mandatory if a person is guilty of fraud. No light sentencing with community service or a substantial fine instead of jail. People with money don’t care about paying the fines or doing community work. For them it is not a punishment, it’s an inconvenience.
c. Create a much more transparent process for disposing of land by councils. There must be an open forum, a tender process and a public opening of such tenders. Shady deals done from the back doors of council buildings are simply illegal and anyone implicated in such deals must be dealt with in the harshest terms.
Throughout South Africa there is pressure on government (and the local and provincial authorities) to make more land available for development and the government is currently the largest land owner in the country. Admittedly, government probably doesn’t even know what land it actually owns and, for some years, the Department of Public Works has been trying to compile a register of all the land that is registered to it.
So I suppose that doesn’t help much either because some sharp-eyed clerk eager to make a couple of quick Rands might be able to smokkel some illegal transaction through the processes and pocket some of the money anyway. However, if they risk a penalty of say 20 years in jail without the option of a fine then maybe, just maybe, they’d think twice about it.
And if that jail term applied to everyone involved in illegal transactions then maybe they too would be a little more circumspect about making a quick buck. If, on the other hand, the consequences of a fraudulent land sale is a slap on the wrist in the form of a R10k fine and a reversal of the sale then who cares if they are caught?
Worse still, I think that the 33 fraudulent transactions uncovered by the Johannesburg council are just the smallest tip of the iceberg when it comes to illegal property deals and I would love to see a group of specialist investigators (like the Hawks) setting up a special division to investigate property sales.
The only way to prevent it is to get tough, confiscate assets, put property thieves in jail and get our law working for the interest of all the people who so badly want to have a stake in the country.
But I’m pretty certain that perpetrators of land fraud will be rebuked, get a slap on the wrist and go about their business in the normal fashion.
And that’s what really stinks.
*Hartdegen writes a regular column for Property24.com. The content of his columns constitutes his personal opinion and doesn’t pretend to be facts or advice. Contact him at paddy@neomail.co.za.
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