A luxury property in Hillcrest, KwaZulu-Natal, has been frozen by the Special Tribunal after investigators linked it to an alleged R9.8 million COVID-19 relief fund fraud involving hundreds of purported employees who may never have existed.

The Special Investigating Unit (SIU) announced on Tuesday that it had secured a preservation order preventing the sale, transfer or encumbrance of a property valued at R2.7 million and allegedly purchased with proceeds derived from the abuse of the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme (TERS).

The property is linked to Ziqoqe Construction CC and its owner, Ndabezinhle Luthuli, who is at the centre of an SIU investigation into suspected fraud involving TERS payments made during the COVID-19 pandemic.

TERS was introduced by the government during the national lockdown to provide temporary financial relief to workers who lost income when businesses were forced to shut down or scale back operations.

According to the SIU, Luthuli submitted applications on behalf of employees of Ziqoqe Construction for the lockdown period between March and August 2020.

Investigators found that the UIF paid a total of R9,836,047.06 to the company between July 2020 and September 2024 through the TERS programme.

However, the SIU alleges that the money never reached the workers it was intended to assist.

The investigation found that Luthuli failed to distribute the benefits to the alleged employees and did not refund the UIF. Investigators further established that many of the 673 individuals listed in the applications were “ghost employees”.

Several people contacted by investigators reportedly denied ever having worked for Ziqoqe Construction.

The findings raised red flags about the legitimacy of the applications and whether the company used fabricated employee records to access millions of rand in public funds intended to support workers during one of South Africa’s most difficult economic periods.

The SIU said its investigation uncovered evidence that a property in the Sienna Estate Scheme in Hillcrest, within the eThekwini Municipality, was purchased in November 2023 through transactions allegedly linked to the proceeds of the fraud.

The unit believes the property was acquired using money generated through unlawful activities associated with the TERS payments.

In granting the preservation order, the Special Tribunal directed the deeds registry to place restrictions on the property registered in Luthuli’s name.

The order effectively prevents the property from being sold, transferred, mortgaged or otherwise encumbered unless authorised by a court, the Tribunal, or through a written agreement between the parties.

Despite the freeze, Luthuli and Ziqoqe Construction remain responsible for all financial obligations related to the property, including municipal charges, levies, insurance premiums and maintenance costs while legal proceedings continue.

The Tribunal reserved the question of legal costs for determination at a later stage.

The preservation order marks another significant step in the SIU’s campaign to recover public funds allegedly looted from COVID-19 relief programmes.

The investigation stems from Presidential Proclamation R.8 of 2021, which empowered the SIU to probe allegations of maladministration, corruption and fraud relating to UIF payments, including TERS claims made during the pandemic.

Since the proclamation was issued, the SIU has pursued dozens of civil recovery cases linked to the misuse of emergency COVID-19 funds, recovering millions of rand and freezing assets believed to have been acquired with illicit proceeds.

As part of the Ziqoqe Construction investigation, SIU investigators also executed search-and-seizure operations in December 2025 targeting individuals and entities linked to the matter.

The unit said it remains committed to recovering every possible rand lost through corruption and ensuring accountability for those who exploited relief measures designed to protect businesses and workers during the pandemic.

Luthuli and Ziqoqe Construction had not commented at the time of publication.

The matter is expected to return to the Special Tribunal as efforts continue to recover the funds and determine the full extent of the alleged fraud.