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South Africa

Maluti-A-Phofung financial woes in the spotlight

───   KATLEHO MORAPELA 13:27 Wed, 15 May 2019

Maluti-A-Phofung financial woes in the spotlight  | News Article

More equipment belonging to the cash-strapped Maluti-A-Phofung Municipality in the Free State has reportedly been seized by the sheriff of the court yesterday.


This comes just months after their vehicles and computers were seized due to failure to pay Eskom.

The municipality, listed in the Auditor-General’s report as amongst the Free State municipalities needing urgent intervention, is more than R2.8 billion indebted to Eskom. Of all the Free State municipalities that owe Eskom a total of R7.8 billion, Maluti-A-Phofung owes the highest amount. Coupled with this, it owes its water board more than R1.2 billion.

This financially troubled municipality has for years been marred with corruption and maladministration allegations, which led the provincial department of Cooperate Governance and Traditional Affairs (Cogta) to place it under administration early last year. It has also made headlines over its failure to pay employees’ salaries and make contributions to their pension funds, medical aids, and other third parties.

Following the attachment of the municipality’s assets in March, the municipality issued a statement confirming that the office of the Sheriff was at the municipality’s premises to carry out a court order obtained by Eskom for outstanding payments.

The municipality’s spokesperson, Kedibone Sentle, said the court order followed a legal process which started in 2014. “In 2014, Eskom issued a notice to interrupt the distribution of electricity supply and the municipality approached the court with an application to interdict that planned interruption of electricity. This matter has been in and out of court since 2014 and on December 16, 2017, the court ordered the municipality to enter into a repayment agreement for the outstanding debt which amounted to R2.4 billion at that time.”

She nonetheless said despite discussing a payment plan, no agreement between the municipality and Eskom was reached as the power utility demanded full payment.

The municipality has also recently come in the spotlight over the arrest of two senior officials, the Chief Financial Officer, Nrateng Khumalo, and the Expenditure Manager, Diakanyo Khampepe, who were arrested in March 2019 for alleged fraud and corruption.

According to the Hawks’ Hangwani Mulaudzi, the two ladies’ arrests came as a result of the directorate’s investigation into a security services tender that was allegedly awarded irregularly by the municipality to a company called Zero Tolerance, back in 2016.

The municipality reportedly lost approximately R4.6 million as a result of the alleged irregular, wasteful and fruitless expenditure.

The municipality is yet to respond to OFM News’ inquiries on the recent seizure by the sheriff.

OFM News/Katleho Morapela and Thumelo Khotha

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