A sheriff has attached Makhado Local Municipality’s vehicles over outstanding payments to a security company, which accumulated over R2.5 million in areas.
The movable assets – including a tractor loader backhoe (TLB), a Toyota Dyna half truck, and a Toyota Hilux – were impounded from the Limpopo municipality’s offices in Louis Trichardt on November 19 after the Limpopo High Court issued a warrant of execution.
The municipality was one of many that unlawfully invested funds in the now-defunct Venda Building Society Bank (VBS) in 2018. It lost R60 million after the bank collapsed following a R2 billion looting scandal, resulting in former mayor Samuel Munyai’s removal.
The sheriff’s move came after the ANC-led Makhado Local Municipality failed to pay Landmark Security and Supply Services (PTY) Ltd for security services rendered. Acting on the court order, Sheriff BM Maenetja pounced on the municipality and loaded the vehicles onto a truck in full view of stunned onlookers.
However, the Makhado Local Municipality rushed to court to apply for a suspension order, pending appeal, which was granted on Thursday, November 28. According to the latest order handed down by Judge Pillay AJ, the warrant of execution issued by the Limpopo High Court registrar on November 12 “is hereby suspended pending the final determination of the leave to appeal referred to in paragraph 2.1 of this court order”.
“The Sheriff of the High Court in Louis Trichardt in the district of Makhado, third respondent, is directed to return to the applicant, with immediate effect, the following vehicles/goods which were removed by the sheriff from the premises on the applicant on 19 November 2024,” reads part of the order.
Judge Pillay reserved costs for determination at the finalisation of the case on the return date. According to the DA’s Lindy Wilson, a provincial spokesperson on CoGHSTA, the municipality was not funded in two fiscal years and ignored a court order that instructed it to pay for services provided.
“The local sheriff attached two bakkies and a back tractor after the municipality disregarded a court order dated 8 October 2024 to pay over R2.5 million to a supplier for security services rendered.”
“The original summons and the court order were ignored, which resulted in the attachment of municipal property; with more attachments imminent,” Wilson said.
She said the loss of municipal vehicles would impede service delivery.
“The loss of these vehicles will impede service delivery even further at the expense of residents. Makhado municipality has been operating on an unfunded budget for the last two financial years and is solvent on a liquidity ratio of 1:1, but unable to pay creditors,” Wilson continued.
Wilson also lambasted the Makhado Local Municipality’s Mayor Dorcus Mboyi and other politicians, claiming they abused public funds, failed to run the council properly and turned it into their cash cow.
“This municipality has been a cadre cash cow for years; irregular investments at VBS Bank of more than R60 million, now forfeited, and political interference in senior appointments has brought Makhado to near financial ruin. Despite the multiple financial challenges facing the municipality, no request has been made to COGHSTA for assistance with a voluntary financial recovery plan.”
“Similarly, no intervention has been introduced by COGHSTA in terms of legislation. The department of COGHSTA is seemingly oblivious to Makhado municipality’s financial woes, either because monthly budget statement reports are not received, or scrutinised, or because there is a lack of transparent reporting,” Wilson added.
The DA says it will ask the municipality’s political leaders and officials to explain themselves before the Limpopo Legislature Portfolio Committee on Co-operative Governance.
“The DA expects that this meeting will be called by the Limpopo Legislature Committee, so that the Makhado delegation is ordered to appear and be transparent about the crisis which the municipality is facing,” she said.
The Makhado Local Municipality’s failure to pay service providers appears to be a symptom of its illegal investment in VBS, which cost it millions of rands six years ago.
A 2018 report released by the South African Reserve Bank (SARB) found evidence of wide-scale looting, fraud and corruption by VBS executives and some politicians.
The report recommended that the bank’s executives, public officials, and auditors be criminally charged and held liable in civil proceedings. It found that R1,894,923,674 was transferred from VBS to 53 individuals between 15 March 2015 and 17 June 2018.
The Makhado Local Municipality’s spokesperson, Mpho Rathando, was not immediately available for comment.
