A Westville police investigation has exposed an underground network extorting as much as R80m from landlords renting accommodation to students.
A group of six people has been arrested, including three University of KwaZulu-Natal staff members, two former Student Representative Council presidents and one SRC member based on the Howard College campus.
Five families who own student accommodation establishments brought the matter to the attention of police, according to sources close to the investigation.
KwaZulu-Natal police spokesperson Lt-Col Nqobile Gwala confirmed to the Sunday Times “the value of the alleged fraud amounts to R80m”.
Another source said: “It could even be more than that. This is just the visible money trail. Nobody knows how much of the lost money is still hidden.”
While police started investigating the allegations in 2021, they believe the scheme has been operating from “at least 2016”.
One source explained how the scheme works: “One of the suspects, or one of many runners, will approach a landlord with, let’s say, a 20-bed building.
"The runner will charge the landlord R100 per bed per month (to house a student). If the landlord pays the hostel is filled up.
“In another scenario, a hostel that is already full will be approached.
The landlord will be told that he has to pay R100 per student per month, otherwise the students will leave.”
Condemned buildings are also used.
The investigation is ongoing. This is only the tip of the iceberg. More arrests will follow
— police source
“There are certain standards that landlords must meet to qualify to host students. You will find buildings that obviously do not meet those standards, yet they are full — because they paid the bribes,” the source said.
“The extorted payments are made in cash, often in areas away from CCTV cameras and prying eyes,” said a second source.
The six accused are: Xolani Dube, a former chairperson of the SRC at Westville campus; Pregasen Govender, an SRC member based at Howard campus; Julian Sandreigh King, a student resident affairs administrator dealing with Edgewood college; Ezram Lebodi, who worked with landlords in the procurement division; Nqobile Mngomezulu, the head of private accommodation administration at UKZN; and Moses Makamba, a former SRC president.
The group appeared in the Pinetown Magistrate’s Court in February on charges of extortion. The matter has been postponed to May for pre-trial proceedings and the state needs to present a final charge sheet by April 11. All six have been released on bail.
One source said the six arrests were part of a “much larger picture”.
“The investigation is ongoing. This is only the tip of the iceberg. More arrests will follow.”
A landlord for UKZN-accredited accommodation, who did not want to be named, said the extortion racket had been operating for years.
“We were approached [in 2019] by one of the suspects who demanded I pay R80,000 cash up front.
"The suspect said that if I didn’t pay, they would mobilise students to protest against my residence. The suspect also wanted a monthly R150 per bed for business to continue.
“Those [landlords] who agree to their deal don’t have problems and their buildings are always filled early.
“However, after I refused the harassment for money started. They would mobilise students to protest, saying we were not compliant [with standards].
"We would receive random calls from this suspect in which he told us that we must pay and our problem will go away. He would call and swear at us and threaten us.”
In 2020, the landlord was again approached by one of the suspects, “along with other building inspectors and SRC students”.
“He demanded I pay a certain fee for my building to be approved for 2021.”
The landlord, who says he refused to pay the bribe, is allegedly owed “millions” for students who stayed at his premises in 2021.
“When I followed up on the outstanding payment, the university said students were allocated to the property by mistake.”
According to the landlord the university was told the landlords had been paid.
“We waited for funds to reflect for weeks until I established that they used my building codes to claim money for other businesses’ accounts.
“I have a student here who is being double billed. She is due to pay at my place where she stays, yet her statement of account shows that she is being billed at another place.
“When she wants to register next year, she will be in debt to the university. That is why we have protests and students who are unable to register,” said the landlord.
“We as landlords are being victimised — and have been for years. I now live in fear, and I don’t know what will happen to me and my family.”
One Sunday Times source said money had certainly been paid for the students’ accommodation.
“The students did live there and there will be invoices confirming the payment made for their accommodation. The money just went to someone else.”
UKZN executive director for corporate relations Normah Zondo said: “The university has a strict zero-tolerance stance towards any form of corruption.
"In the event of such instances being detected, we promptly report them to law enforcement agencies and co-operate fully with their investigations.
"Additionally, we have robust internal procedures in place to deal with such incidents.”
While the department of higher education and learning said it had not been briefed on the matter, spokesperson Ishmael Mnisi said “any acts of corruption or maladministration” are cause for concern, and called for speedy action by law enforcement authorities.
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