Chaos once again erupted in the Knysna Municipal Council Chambers on Monday 30 September, when the discussions and deliberations at a Special Council Meeting turned to the outstanding millions owed by Grey Elephant Investment Pty Ltd, and the council’s resolution to write off a large percentage of the amount. There was much shouting, interrupting and even name-calling before the matter could be settled.

The item was on the meeting agenda due to communication the council had received from the offices of Minister Bredell on 9 September. The letter pointed out in no uncertain terms that the council’s intention to amend the Writing – Off of Irrecoverable Debt Policy (in April ’24) and the resolution to write off so much of the Grey Elephant Pty Ltd debt flew in the face of the Local Government Municipal Systems Act.

Bredell’s communication also alleged that as of 30 June this year, Grey Elephant’s debt with the Municipality is sitting at R60 799 399.19.

But when the time came to debate this letter, many of the councillors were adamant that the item be deferred again. Whilst the DA/KIM coalition were adamant that the matter needed to be resolved as a matter of urgency, and that it formed a large part of the agenda for the day, the ANC and their coalition partners from the EFF, PA and PBI insisted that it be removed from the day’s agenda.

It was then revealed to those following proceedings that the eleven members of the leading coalition, including Mayor Aubrey Tsengwa and Speaker Mncedisi Skosana, had each been served with papers from the High Court that morning, as had the Acting Municipal Manager. The court document informed all the recipients that the applicant – listed simply as The Accountability Group – had approached the High Court to review and set aside the decision of the council majority to write off the Grey Elephant debt. It further requested that any legal costs relating to the court application be paid by the councillors who had voted in favour of the decision.

Attached to the court papers was a founding affidavit written and signed by Esme Jefferys, the chair of The Accountability Group. This lengthy document included a copy of the letter sent to Grey Elephant via their attorneys on 2 August 2024 by the Acting Municipal Manager Setloane Malepeng, which confirms that an amount of R38 415 221.38 would be written off the Grey Elephant Municipal account.

The Grey Elephant’s proposed debt write off has been a subject of heated debate for over a year now, inside and outside council chambers as well as in the media. With a seemingly cash-strapped municipality battling to meet its financial obligations and talk of an ‘unfunded budget’ being bandied around the corridors of Town Hall, many are questioning how such an amount could be lost from the municipal coffers.

In Monday’s Special Council Meeting it was eventually agreed by all parties that the Grey Elephant matters – both Bredell’s letter and the court papers received by the councilors – would be debated together in the Council’s next meeting, which would be called within a week.