There is more to the Free State Social Housing complex in Brandwag, Bloemfontein, than meets the eye. The rental residential propertywhich has been operating as ongoing concern from the onset is plagued by a host of complex problems resulting from have collapsed governance.
Problems range from legal battles to and the non-payment of municipal service accounts and rent, debt worth billions, alleged fraud and corruption, as well as apparent gross maladministration.
The problem caused by the non-payment of water accounts was aired by disgruntled occupants during a rowdy protest after the water supply was disconnected on Wednesday (10/08). A group of uThey reacted by barricading Nelson Mandela Drive and DF Malherbe Avenue with everything atto their disposal – even resorting to burning tyres and stones,and as well as promotion boards.
- Following intense protest that continued on Thursday and Friday, occupants confirmed that water supply was restored late on Friday afternoon.
However, it has emerged that the Mangaung Metro Municipality has given occupants seven days to devise a payment plan, or face another disconnection.
Informed sources said the non-payment of water and rental accounts followed the liquidation of the managing company, the Free State Social Housing Company (Freshco), and the takeover of administration by the Social Housing Regulatory Authority (SHRA) in 2019.
“The office of Freshco is closed, as we know, due to ongoing legal battles and being placingplaced under maladministration. No directive was given to tenants where they should make payments. The disconnection of water came as a surprise, because some units use pre-paid water and power metersand power,” said a tenant who wished to remain anonymous.
The SHRA took over the management of the trouble-ridden property after the discovery of widespread irregularities under Freshco’s management.
Reported irregularities include failure to hold board meetings and pay service providers, an executive paying himself a R34 000 bonus in December 2017, the processing of unauthorised payment of R2,9 million to a company without any written contract and debt exceeding assets by almost R39 million.
The regulatory body placed Freshco under administration after a developer launched a liquidation application against the managing company for failure to pay its debt.
As things stand, the regulatory body applied on 20 July to the Free State High Court in Bloemfontein regarding claims worth billions in damages against Freshco’s three directors: Petrus Khoarai Mangoejane (first respondent), Steven Mabalane (second respondent) and Candida Crystal Smith (third respondent).
In the application, the body pointed out that the former directors were jointly liable for several losses, damage and costs Freshco incurred during their term of office.
The regulatory body has instituted an application against the respondents, asking for the following:
- that the respondents pay back R1 339 700 in loss pursuant to the agreement and payments made to Motif Capital Partners during the period between 2017 and 2018;
- the respondents pay R9 078 763,45 in respect of losses incurred as a result of Fresho failinged to pay Calgro M3 for the construction of the phase 3 of the property;
- the first respondent repays R34 321,76 beingon account of an unauthorised incentive payment he made to himself in December 2017
- the respondents pay R475 140,53 as the outstanding balance the judgement debt of an order issued to themobtained by Nashua Bloemfontein;
- the respondents pay R3 700 000 in losses incurred in the financial year ending December 2017; and
- the respondents pay R712 593,28 being amount owed to Verster Berry in Association for professional quantity surveying services provided to Freshco. during the term the trio were directors of Freshco.
