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‘Millions looted in land reform scam’

SIU report recommends that 42 people, including officials, be prosecuted for fraud, corruption

Business Day

24 Jan 2019

Karyn Maughan

Fraud “on an enormous scale” has been uncovered in the land reform programme in which government officials handed out farms and millions in grants to beneficiaries who did not qualify.

The details are contained in a report by the Special Investigating Unit (SIU), which recommends that 42 people, including the government officials, be prosecuted for fraud and corruption linked to land scams.

Business Day obtained the report this week through a Promotion to Access to Information application. It was handed to President Cyril Ramaphosa in March 2018.

The government is under fire for the slow pace of land reform, which has become a major political issue.

In 2018 the ANC and EFF voted in parliament to change the constitution to allow for land expropriation without compensation, arguing that it was a lack of state funds that had hampered land reform.

The SIU report probed 148 land reform projects between 2011 and 2017, finding “major systemic weaknesses” and an alarming absence of controls and mechanisms to prevent fraud and maladministration.

The lack of controls “opened the door for so-called ‘rent-acrowd’ and other fraudulent activities on an enormous scale

with vast implications in terms of irregular and fruitless and wasteful expenditure ultimately at the cost of the taxpayer”, the report says.

Most of the cases investigated occurred under the Land Redistribution for Agricultural Development Programme in which grants were made available to beneficiaries to cover the costs of the acquisition of agricultural land.

Crucially, beneficiaries were expected to stay and work on the farms they were given grants to purchase, often as part of large community trusts, as a way of partially paying back the money they had received.

But, according to the SIU, this is not what happened in a quarter of the land reform projects it investigated.

In an analysis of each of the fraudulent land reform projects

investigated, the SIU details how, in many instances, thousands of alleged beneficiaries “were not even aware of the project and had never been to the farm”, had never lived or worked on a farm and did not qualify for grants.

In one instance, many of the 57 people listed as the beneficiaries of a Newcastle land reform project actually lived 200km away in Pietermaritzburg. Several beneficiaries were related to a department official involved in the project.

The programme has since been suspended and replaced by the Proactive Land Acquisition Strategy subprogramme, which, instead of using grants to enable black people to own land, entails the government taking over ownership of the land and then leasing it to beneficiaries “with the eventual goal of purchasing it themselves”.

But the SIU has warned that the systemic weaknesses it had identified including “vagueness on critical issues” in land reform policy and failure to follow proper procedure still needed to be addressed.

The probe was initiated by a proclamation by former president Jacob Zuma in 2011.

As a result of the evidence of fraud and corruption it gathered, 24 farms valued at more than R382m have been forfeited to the state.

The Asset Forfeiture Unit has also won orders to freeze seven other farms, valued at R82m, pending the outcome of applications for their permanent forfeiture.

There has been little progress so far in prosecuting the perpetrators. NPA spokesperson Luvuyo Mfaku said he had been advised by the prosecutor leading the state’s anti-corruption task team that the “majority” of the alleged land reform corruption cases were still under investigation, “but there are a limited number on the court roll”.

The SIU also recommended that the department of land reform should take disciplinary action against the 37 officials for misconduct. The department has yet to confirm if this has happened.

Most of the alleged corruption and irregularity happened in KwaZulu-Natal with 23 farms valued at R354m seized in that province alone.