Hawks arrest Eastern Cape trio in alleged R40m government buildings rental scam

Pactoa membership documents siezed by the Hawks during raid in Mthatha on 07 October 2022. (Photo: Hoseya Jubase)

By Hoseya Jubase & Estelle Ellis

11 Oct 2022

The leaders of the Public Assets Community-Based Tenants and Owners’ Association appeared in court on Tuesday for their alleged involvement in a criminal enterprise that saw them pocketing R40-million in five years by illegally renting out government buildings.

Three men who headed an organisation that allegedly made R40-million in five years by renting out government buildings in Mthatha made a brief appearance in the Mthatha Commercial Crimes Court on Tuesday.

The arrests come days after the organisation celebrated its fifth anniversary, vowing to continue “defending the rights” of their people.

According to Hawks spokesperson Captain Yolisa Mgolodela, the men, identified as the alleged ringleaders, were all members of the Public Assets Community-Based Tenants and Owners’ Association (Pactoa).

Sabelo Abel Nkqayi (44), Bongani Cikolo (49) and Zamikhaya Songca (49) were provisionally charged with fraud and theft, and will remain in custody until their bail application on Friday.

Earlier on Tuesday morning, before the three men appeared in court, their cellphones were confiscated and handed to investigators.

In February, the men held negotiations with the Eastern Cape Development Corporation (ECDC) for a “peaceful transition” to return the properties to the government.

At the time, Bongani Cikolo said in a public statement: “The improvement in governance and leadership of the ECDC, as well as the observed appetite for engagement with stakeholders, gives the association confidence that our erstwhile concerns regarding the poor state of management of state assets will be addressed.

“The association affirms its desire to see development taking place within Mthatha and the broader OR Tambo region, and is open to engaging with government and government institutions.”

Providing background to the matter, Mgolodela said that in December 2017, Pactoa began evicting tenants who were paying rent to the ECDC. They then took over 11 properties, including the Windsor Hotel, and rented these to tenants who paid them and not the ECDC.

The other 10 properties were: Mountain View, Valley View, Indalo View flats, Ridge View flats, Park Court, Vulindlela Heights, Ulundi flats, Portobello flats, Jacaranda Court and Hillarove flats.

A Special Investigating Unit and Public Order Policing officer leaves the Windsor Hotel in Mthatha, Eastern Cape, during the raid on 7 October 2022. ((Photo: Hoseya Jubase)

Pactoa leader Sabelo Abel Nkqayi (44) arrives at the Mthatha Specialised Commercial Crimes Court on 10 October 2022. (Photo: Hoseya Jubase)

Pactoa leader Zamikhaya Songca (49) arrives in a police van at the Mthatha Specialised Commercial Crimes Court on 10 October 2022. (Photo: Hoseya Jubase)

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On Friday, 7 October, a team from the Hawks raided the Windsor Hotel where Pactoa’s head office was situated. They were assisted by the Special Investigating Unit and members of the Public Order Police.

The arrests followed years of attempts by the ECDC to regain control of its properties in the area. Following a series of closed talks between the ECDC and Pactoa in February, an agreement was reached for the handover of properties illegally occupied by tenants affiliated to Pactoa.

A statement issued by the ECDC at the time read:“The conclusion of this agreement is a breath of fresh air for the Mthatha region, which is in dire need of development, particularly within the property development sphere.

“The continued illegal occupation fed into a negative investor perception, which the region could not afford.

“This agreement will also see key properties such as the Windsor Hotel in Mthatha – for which the ECDC seeks to secure private sector investment for development – released to enable the development process.”

According to the agreement, the ECDC was to start taking control of the illegally occupied buildings from 1 February 2022.

Tenants at the Windsor Hotel in Mthatha leave with their belongings after the Hawks raid the premises. (Photo: Hoseya Jubase).

Pactoa membership documents seized by the Hawks during the raid in Mthatha on 7 October 2022. (Photo: Hoseya Jubase)

“While the normal legal processes remain in place to evict all those occupying the ECDC’s properties illegally, the board and executive team embarked on a strategy to engage Pactoa with the view of finding a solution and addressing the impasse. These negotiations were held in good faith and without prejudice to both parties,” Ayanda Wakaba, the CEO of the ECDC, said at the time.

“We also acknowledge that some of the people who are occupying our properties might be paying rent to illegal landlords. Ideally, the ECDC would not like to shut down the businesses of the final occupants who might be fit to be tenants to the ECDC’s properties.

“To address this matter, the ECDC board has approved a normalisation process for qualifying occupants … A tenant who is currently occupying ECDC’s properties may approach the ECDC and request to be normalised as a legal tenant,” Wakaba said.

The ECDC had suggested an audit of occupants, followed by an invitation to occupants who wished to continue their leases with the ECDC.

On 13 April, Pactoa handed back five factories to the ECDC and 10 residential properties on 4 May. According to a statement issued at the time, the ECDC found that many of the properties had been sublet to students. They had extended an invitation to parents or caregivers to conclude a lease agreement with the ECDC.

Speaking outside court on Tuesday, Advocate Lusindiso Matoti said his clients would apply for bail on Friday. A group of Pactoa supporters gathered to support their leaders.

During proceedings, prosecutor Thenjwa Sellem said time was needed to draw criminal profiles of the suspects before the bail application was dealt with.

“If we proceed with the bail application on Friday, the court will be left with insufficient evidence,” he said. MC/DM

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