Liquidator clears the developer of incomplete R11bn Mega City project 

In the wake of a whirlwind of media reports casting shadows over the halted R11-billion Montrose Mega City Development Project in Randfontein, on the West Rand, the developer has been cleared of unlawful activities by the appointed liquidator. 

The findings are contained in the liquidation inquiry report of Resilient Rock, owned 100% by SCM Holdings, dated February 20 last year, which Sunday World recently acquired.  

Allegations of corruption have placed the company, previously responsible for the ambitious Montrose Mega City Development Project, under scrutiny. However, the appointed liquidator dispelled these accusations, revealing no unlawful activities in the company’s dealings. 

Further information Sunday World has seen is that, contrary to claims of the R11-billion budget being looted, the Gauteng government’s disbursement amounted to R490-million.  

Two independent valuations, conducted by Spectrum Valuations & Asset Solution (October 2022) and Sage Assets (December 2020), placed the value of the land with improvements at R1.6-billion and R1.4-billion, respectively.  

The figure includes the costs of completion. 

The high court’s liquidation of SCM Holdings, a name now synonymous with the incomplete R10-billion Montrose City housing project, ignited public discourse over the alleged misappropriation of funds, primarily due to the project’s premature halt attributed to financial constraints from the local municipality. 

“During the course of development, it emerged that the local municipality was unable to provide bulk engineering services to the property due to financial constraints, and this led to the company being unable to continue with the development,” wrote Michael Lawrence Stewart of Bombani Liquidators & Trustees. 

However, the liquidator’s report said no contraventions of the Companies’ Act by the directors were identified. “The company experienced severe difficulties due to the inability of the local city council to provide bulk services such as electricity, sewerage, water, etc. This, inter alia, resulted in it being unable to effect the transfer of certain stands, thereby negatively affecting its cash flow.”  

The findings mean that the directors, including Sam Comfort Mhlaba and SCM Holdings, were not directly responsible for the firm’s debts. 

At the time of writing the report, Resilient Rock had appealed to the Supreme Court of Appeal in pursuit of recourse that might alter its current status, and the matter is pending. 

Mhlaba declined to comment. 

Visit SW YouTube Channel for our video content

Setumo Stone