By Akani Nkuna
The Joburg Property Company (JPC) has denied allegations that a settlement linked to the Proton House lease was corrupt or used to fund payments to councillors involved in the removal of former Johannesburg mayor Mpho Phalatse.
“JPC wishes to place on record that the settlement was a lawful contractual resolution and not an irregular payment. All legislative, governance and internal approval processes were followed in the execution of the settlement,” the JPC said in a statement.
The statement followed renewed allegations on Monday, in which former DA federal council chairperson and DA Joburg mayoral candidate Helen Zille alleged that smaller parties were bribed to support a motion of no confidence against Phalatse. Phalatse later backed the allegations, saying they were linked to a case she opened against JPC in October 2022.
JPC said the Proton House matter related to a lease agreement between JPC and Bertocure (Pty) Ltd, a subsidiary of Ntshwese Projects. It said the companies involved were established in 2014 and 2008 respectively, and were “not created shortly before the settlement was concluded”.
The entity said the settlement was reached in terms of Clause 6.3 of the lease agreement and arose from its obligation to reinstate the landlord’s white-box specifications under the agreement entered into by the City of Johannesburg.
“The costs associated with the reinstatement of the property were determined through bills of quantities prepared by an independent quantity surveyor and were based on the landlord’s specifications,” JPC said.
“The entity further rejects allegations that the reinstatement costs were inflated or that any portion of the settlement amount was used for purposes unrelated to the contractual obligations arising from the lease agreement.”
JPC said it was not aware of evidence linking the Proton House settlement to alleged payments to councillors or to any political process related to motions of no confidence in the city.
“Such allegations remain speculative and unsupported by any findings of a competent authority, law enforcement agency or court of law,” it said.
Phalatse was first elected Johannesburg executive mayor in late 2021 and was removed from office through council processes during the city’s unstable coalition period. She was finally removed in a motion of no confidence on 26 January 2023, when 140 councillors voted in favour of the motion and 129 voted against it.
In October 2022, while serving as DA Johannesburg caucus leader after an earlier removal from office, Phalatse said she had gone to Hillbrow SAPS to lay criminal charges against JPC.
“Today, we are here at the Hillbrow South African Police Service to lay criminal charges against the Johannesburg Property Company (JPC), a City-owned Municipal Entity that appears to have engaged in an act of fraud or corruption involving millions of taxpayers’ money siphoned off to a company linked to the ANC,” Phalatse said at the time.
She alleged then that JPC had paid R27 million to a company shortly after it was registered.
“It is alleged that the JPC paid R27 million to a company that had only been registered for two-months at the time of receiving the payment in September this year,” she said in the 2022 statement.
Phalatse said she had been informed that part of the R27 million would be used to destabilise the coalition government she had led.
“We were reliably informed that part of this R27 million would be used to destabilise the coalition government of which I was the Executive Mayor, by funding the payment of bribes to Councillors in order to entice them to vote against our government,” she said at the time.
The DA statement said the Proton House premises were intended to be used as office space for the city’s Group Finance Department, and that JPC had argued the R27 million settlement covered arrear rentals, interest and reinstatement costs.
Phalatse said at the time that the JPC CEO had submitted a report to the Acting City Manager saying the R27 million payment was made to the lessor of Proton House on 5 September 2022 and was the result of a settlement agreement between the city and the landlord.
But she questioned the escalation in the reinstatement costs.
“We are reliably informed that initial estimates of the reinstatement costs were R2.2-million. However, for some reason unbeknownst to us, that initial quote was ignored. Instead, the JPC is alleged to have appointed a new Quantity Surveyor who then prepared a Bill of Quantities which resulted in a new estimate for reinstatements at over R20-million,” Phalatse said in the 2022 statement.
“The JPC has yet to provide documentation to support the claims made in respect of the contents of the settlement agreement, nor have they attached the lease agreement which would have spoken to the specifics of the reinstatements,” she said.
JPC said no formal charges had been instituted and no findings of wrongdoing had been made in relation to the Proton House settlement, despite references to alleged actions by a previous board regarding its chief executive officer.
“The entity remains committed to transparency, accountability and good governance in the management of public assets and public funds. JPC will continue to cooperate with any lawful oversight or investigative processes and welcomes fact-based scrutiny of its operations,” JPC said.
It said it reserved its rights over “false, defamatory or misleading statements” that could damage its reputation or undermine public confidence in its work.
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