Johannesburg Property Company bigshots suspended amid corruption controversy

Joburg Property Company (JPC) chief executive Helen Botes, and her chief financial officer, Imraan Bhamjee, have both been suspended with immediate effect, following allegations of procurement irregularities involving Covid-19 cleaning and sanitising contracts worth millions.

The decision to suspend the pair came on Wednesday, via the JPC board, and was confirmed to The Citizen by Johannesburg mayoral spokesperson Mlimandlela Ndamase on Friday.

Botes and Bhamjee stand accused of awarding Covid-19 cleaning and sanitising contracts to four companies with no prior experience in cleaning, at highly inflated rates.

This led to them spending close to R19 million for cleaning and sanitation services, at rates as high as R401 per square metre, whereas the industry standard rates vary between R2 and R10 per square metre, according to a report in The Sunday Independent earlier in the week.

Botes allegedly negotiated prices higher than the original quotes she was given by the companies, and normal tender procedures were not followed, with the pair instead negotiating directly with suppliers.

Inflated and unnecessary property rentals

The investigation into the Covid-19 procurement allegations aren’t Botes and Bhamjee’s only headache at the moment though, as they are also facing accusations of overspending on properties being leased for JPC’s own and other government departments’ use.

Ndamase confirmed on Friday that the terms of reference for the investigation being launched would also include these allegations.

The JPC stands accused of spending millions more than it should on leasing property, which stood unused for more than a year and only saw staff move in hurriedly this past week, as the allegations surrounding the Covid-19 procurement started to swirl.

It has emerged that the company has been renting the six-storey Forum 1 building at Braampark in Johannesburg, at a rate of around R1,6 million a month for over a year since January of 2019. Five of the six floors, however, remained vacant during this period, with the first floor housing JPC’s governance department only being occupied in April last year.

According to a source, as well as video footage and pictures, this changed suddenly last week, with staff hurriedly being moved from the Forum 2 Building at the precinct to Forum 1 a few metres away. Staff have complained that they are expected to work in a building which is not ready for occupation, and questioned the hasty move.

The move ostensibly came because the company ran out of space in the Forum 2 building.

A second source within the company, who is close to CEO Helen Botes, has accused her of wasting over R62 million of state funds on the “frivolous” leasing of the second building.

According to the source, only around 50 people from one department in the company occupied one floor of the 6-storey unit, which she believed amounted to wasteful expenditure.

“It’s a long standing issue but the staff has been scared to speak out. Over the weekend they were moving things, and yesterday we were told to start packing our things,” said the source.

“How can you justify that we have already spent R62 million and currently we are paying R500 000 a month for two floors in the other building, that is wasteful expenditure. And I don’t even think that building has an occupational certificate because it isn’t fit to be occupied as we speak. It was bare.”

In 2017, the building made headlines when its top floor caught fire while it was at the time being used by First National Bank. According to the source, JPC stepped in when another state entity, the Johannesburg Roads Agency was threatened with a lawsuit after bailing out of a deal to rent the place from lessor Sanlam Properties.

“Building wasn’t empty, it was used as storage”

Botes denies there was any arrangement, claiming instead that JPC rented the space because its staff complement had doubled, leaving them with little space at the Forum 2 building, where they occupy two floors.

Botes argues the building has been used for various purposes including storage, or as a dispatch point for cleaning staff.

“JPC required additional office space for its operations which could not be provided in the Forum 2 building. The JPC’s staff complement has grown considerably since the operation first moved into Forum 2. In the last year alone the JPC staff complement grew from approximately 500 to 1 800. Although staff operate from many premises the Braampark office space had to increase.”

Botes has denied the allegation that the building was vacant for months while the company was paying rent.

“The building has not been vacant and has been occupied by Group Governance. The JPC property information Unit has been working out of this space due to a lack of space in Forum 2. Further JPC utilised the space for its cleaning staff,” she says.

Botes also explains the building has been used as a a decanting facility for city departments which were living in non-compliant buildings under the Occupational Health and Safety Act (OHASA).

According to Botes, the move has cost the company R10 million, although the source claims the cost is closer to R30 million.

According to the document, JPC is also renting a property on Stiemens Street in Braamforntein, a 7564 square meter space for a cool R1,1 million a month.

When The Citizen arrived at the Forum 1 building this week, construction workers whose blue overalls were covered in white paint and dust were entering and leaving. Workers were wheeling bits of furniture towards a lift while a contractor worked on a fire detection device which had previously not been active.

Workers were reluctant to speak to us except to confirm that they were moving from the JPC offices in Forum 2.

Past controversy

The JPC was also involved in another scandal in September last year, when it emerged that it had sold one of Sandton’s most expensive pieces of land to Cedar Park Properties, while financing the sale from its own pocket.

Former mayor, Herman Mashaba, at the time indicated that the city would launch an investigation, after it was revealed that the sale of the land where the Sandton Gautrain Station is situated happened under extremely dodgy circumstances.

It appeared that the JPC sold the land to Cedar Park for R280 million in 2009, but the transfer was only registered in the Deeds Office in 2013. the City also issued a bond in favour of Cedar Park for the full R280 million.

Mashaba to asked at the time, “…why would the City ever finance the sale of its own land to a private company? This is not only absurd but highly suspect.”

“To add to this, Cedar Park has not made one payment in terms of the bond repayments because of a suspensive clause included in the development lease agreement.”

Simnikiweh@citizen.co.za

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