More and more scandals of the Free State Development Corporation are coming out. Sources inside FDC have revealed to The Star that the new acting CEO is Kgotso Tau, who turned 65 on February 25. This follows Thabo Lebelo’s departure.
Lebelo, a charted accountant, became the company’s strength in 2020 after moving the organisation from a loss-making entity into an economic powerhouse.
Sources inside the FDC say Lebelo was asked to “continue working but not return to the office because things were simply falling apart without him”.
Sources reveal that there was such incompetence in the thrust of the organisation. “He knew that he was in a political space and as the highest executive he would be sacrificed by one faction for another. That is the style of State Owned Entities, it comes with the territory,” a source said.
According to the source, e-documents were sent to Lebelo’s home for signing, and he even chaired some online operational meetings even when he was said to be suspended because there was simply no other way.
Sources inside the FDC have exposed a new scandal involving BP. BP used to lease a property in Namahadi. In 2021, BP paid approximately R80,000 per month to the FDC. The operator at that time was one “Mr. Ditabe”, who had an operator’s agreement with BP for the petroleum station. The land is owned by the tribal council, and the FDC holds a Permission to Occupy (PTO) indefinitely.
The lease with BP ended in 2021, and the FDC decided to empower Ditabe by entering into a new lease agreement with him for a period of 9 years and 11 months at R40,000 per month. It has now come to light that FDC has entered into an improbable sale of the FDC’s Permission To Occupy for R1.3 million, although the right is worth at least R10 million to the FDC based on the capitalisation rate (BP’s R80k per month x 12 x 10).
The R1.3 million has been deposited in the trust account at Balden and Vogel Attorneys in Harrismith, in the Eastern Free State. However, this transaction was not approved by the MEC of DESTEA or the Executive Authority, as required by Section 54(2)(d) of the Public Finance Management Act. Furthermore, no agreement has been signed between Mr. Ditabe and the FDC. Even if such an agreement had been signed, it would be unlawful as it would not have received approval from the MEC DESTEA. This situation constitutes theft and fraud, which is an offense under the Prevention of Organised Crime Act (POCA).
It seems that FDC illegitimately sold this PTO to a third party for R1.3 million without the necessary approvals. This is an unlawful sale of a right. The unauthorized sale could be considered fraud if it was conducted with the intent to deceive and unlawfully enrich one party while depriving the rightful owner (FDC) of their property. According to the PFMA (specifically Section 54(2)(d)), the sale and/or transfer of state assets (in this case, the PTO) requires approval from the MEC of the Department of Economic, Small Business Development, Tourism, and Environmental Affairs (DESTEA) as well as the Executive Authority.
The sources claim that a litany of dubious activity is happening at the corporation. The Star will be publishing a series of exposés. The FDC could not be reached at the time of going to print. This is a developing story.
The Star