Hawks probe R290m Joburg social housing contracts

The Hawks are circling two social housing construction contracts worth a combined R290m in the City of Johannesburg’s embattled Johannesburg Social Housing Company (Joshco).

The Sunday Times has learnt that members of the Directorate for Priority Crime Investigation (DPCI), working with the National Prosecuting Authority’s specialised commercial crimes unit in Johannesburg, are investigating alleged fraud and corruption, as well as money laundering, in tenders to construct nearly 400 rooms in Klipspruit, Soweto and Selkirk Avenue in Randburg.

According to a source with insight into the probe, the investigation stems from protected disclosures made around alleged discrepancies in the expenditure and progress of the projects, which were awarded in March 2025, as well as allegations that some of the contractors and subcontractors were linked to Joshco senior leaders.

Part of the investigation includes a letter that was sent to Joshco by the Hawks in February requesting information, documents and sworn affidavits.

The requested affidavits must include details of Joshco’s procurement policy, the process followed in awarding the tenders, copies of the contracts signed and the scope of the work, as well as invoices and payments made.

They also sought the list of members of the bid evaluation and bid adjudication committees, their contact information, as well as the role played by supply chain management in the awarding of the contracts.

The letter followed a visit by the Johannesburg Hawks to Joshco’s offices in Braamfontein in February, where interviews were held.

Joshco acting CE Katlego Ditshego said the company could not comment on the details of the probe as they were under investigation.

While Ditshego refused to name the two executives cited as persons of interest in the Hawks’ correspondence with Joshco, the Sunday Times has reliably learnt that they are the acting executive for business and strategy, Nokwazi Mtshali, who was acting CEO at the time the tenders were awarded, and COO Melusi Ndima.

Neither Ndima nor Mtshali responded to enquiries from the Sunday Times.

Ditshego said: “We have been consulted by various law enforcement agencies for matters they are pursuing, including the referred projects … As the matter is before law enforcement agencies, the organisation is bound by rules relating to privacy of individuals and the integrity of ongoing investigations.

“It would therefore be inappropriate for Joshco to disclose or discuss the identities of any persons who may or may not form part of the investigation process.”

He said the information requested by the Hawks was to be handed over on Friday.

The projects were progressing according to schedule, Ditshego said. But a visit to the Randburg site this week showed that no work had started, despite R20m allegedly being paid out on the project.

A Joshco insider said ⁠the site was officially handed over to the contractor last September and Ndima, who was appointed in June 2025, “gave an instruction for at least R20m to be spent on the contract before December 2025, with the intention of motivating for additional funding through the midterm budget adjustment period”.

“The project is now on hold due to insufficient budget, missing construction drawings and incomplete NHBRC [National Home Builders Registration Council] enrolment.

“The Joshco leadership was alerted that the site was not ready to be handed over to the contractor; however, an instruction to continue with the project was given,” the source said.

This version was corroborated by another Joshco insider, who asked not to be named for fear of reprisals.

One of several municipal entities in the City of Johannesburg, Joshco falls under the human settlements directorate and is meant to provide affordable, quality rental housing for low-to-middle-income earners.

It is reported to be the largest social housing entity in the country, managing more than 9,000 units across five city regions priced between R900 and R5,500 a month.

According to Ditshego, the two projects would have seen 388 units built: 243 in Soweto and 145 in Randburg, at a cost of R83.9m and R206.1m respectively.

Asked to confirm that R20m was spent with no work done, Ditshego said: “All payments were authorised in line with the work completed by the appointed professional teams and consultants, as well as for the bulk earthworks undertaken for the 145 units.”

A change of contractor at the Randburg site after Joshco withdrew a portion of the land parcel, changed the entire scope, he said.

“All work previously undertaken at the Randburg Selkirk site was verified and certified by Gibb Consulting, including the associated professional fees,” he added.

The controversy is the latest of several issues involving senior leaders that have engulfed the property company.

In January, its then acting CEO Themba Mathibe was taken in by law enforcement officials for questioning related to allegations of money laundering after police allegedly found large sums of cash at his Bryanston home.

He was subsequently arrested and charged with money laundering.

The Sunday Times has learnt that Ndima, who allegedly attends work with armed protectors, is the subject of grievances among employees related to alleged intimidation and unprofessional conduct in his interaction with colleagues.

It is also alleged that soon after his appointment, he instructed that payments to service providers for maintenance and repairs be halted indefinitely. The blocking of these payments, which at one point totalled more than R30m according to internal Joshco documents, led some contractors to stop performing maintenance work.

This in turn led to issues at several Joshco buildings in the Johannesburg CBD and Roodepoort, including broken lifts, uncut grass and water provision problems. The Sunday Times has seen a letter of demand from a contractor who claimed to be owed more than R1m.

Ditshego acknowledged that “in some instances” Joshco had been unable to respond to tenants’ maintenance requests, citing budgetary constraints. “We are continuously exploring various funding models to augment our repairs and maintenance budget, given the fact that some tenants are not paying rent,” he said.

“Joshco is continuously working with service providers to resolve these issues as quickly as possible. The resolution is dependent on budget availability.”