Entire Document - Chris Hani District Municipality

42.3 Loans granted to Related Parties
In terms of the MFMA, the municipality may not grant loans to its Councillors, Management, Staff and Public with
effect from 1 July 2004. Loans, together with the conditions thereof, granted prior to this date are disclosed in Note
8 to the Annual Financial Statements.
42.4 Compensation of Related Parties
Compensation of Key Management Personnel and Councillors is set out in Notes 22 and 23 respectively, to the
Annual Financial Statements.
42.5 Purchases from Related Parties
The municipality did not buy goods from any companies which can be considered to be Related Parties.
43. CONTINGENT LIABILITIES
43.1 Court Proceedings
2009 2008
R
R
Court Proceedings: 3 780 662 1 635 000
ii. The Board of Trustees for Qamata Irrigation Scheme instituted interdict proceedings in the Development Tribunal,
Bisho. The municipality cited as 3rd respondent. The defendant was successful in its defence and is taxing a bill of
costs for taxation and recovery of costs. The cost of the case is estimated to be R200 000.
iii. The Municipal Employees Pension Fund brought an action against the municipality for outstanding payment of
contributions to the Fund in respect of councillors in the amount of R322 950. The cost of the case is estimated to be
R35 000. The outcome of the action is still uncertain.
iv. Reticulation Design Project Services was appointed by the municipality for the upgrading of streets and storm water
drainage, and the building of VIP toilets. RDP Services has instituted action against the municipality for the recovery of
payments to the amount of R2 501 000 alledgedly not made. Legal cost is etimated to be R250 000. The outcome of
the case is still uncertain.
v. The municipality was requested for payment of the amount of R11 601 for goods sold and delivered by East Cape
Agricultural Cooperative Ltd. The claim is not disputed and the claimant was requested to provide proper invoices,
which has alledgedly been done. The amount of the invoices are still in dispute. The cost of the case is estimated to be
R10 000. No summons for payment has been issued to date.
vi. The municipality has been sued by an individual for outstanding travelling cost in the amount of R4 693 due to him as
a member of the Audit Committee, arising from extensive travelling between Butterworth and Queenstown to attend
meetings. Since the municipality has proof that the claimant was paid in full, the claim is being defended and is now
ready for trial. The cost of the case is estimated to be R15 000. The outcome of the case is still uncertain.
vii. Sidi Parini (Pty) Ltd is claiming an amount of R330 418 from the municipality for fertilizer allegedly sold and delivered in
terms of a verbal agreement. The claim is disputed. The cost of the case is estimated to be R100 000. No summons
for payment has been issued to date.
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