The Free State Development Corporation (FDC) is under growing scrutiny after going ahead with a highly questionable land transaction involving the Maanankoe Filling Station in Namahali, Qwaqwa, despite legal advice and regulatory concerns.

The deal has raised serious questions about the corporation's governance and adherence to state procedures. The Maanankoe Filling Station, operated by Mr. KJ Litabe, has been part of a long-standing arrangement with BP South Africa since 1988. However, following the expiration of BP’s lease agreement, Litabe sought to purchase the property. In June 2017, he made an offer of R1.3 million.

The FDC began exploring the possibility of selling the land, even though it was held under a "Permission to Occupy" (PTO) agreement with the Namahadi Tribal Council, which controls the land. The PTO status placed limits on the ability to transfer the property, raising immediate red flags about the legality of such a sale.

As the discussions moved forward, FDC’s legal advisors warned that the property could not be sold due to the lack of a title deed. A title deed or Deed of Grant is essential for registering property transactions at the Deeds Office, which would make the sale legally binding. FDC legal advisors emphasized that a transfer of property on PTO land would be problematic and could face substantial legal challenges.

Additionally, the Namahadi Tribal Council, which retains custodianship over the land, expressed concerns about the local community’s interests, highlighting that any transfer should be made with their approval.

Despite these warnings, FDC proceeded with efforts to convert the land from PTO status to a title deed and to facilitate the sale to Litabe.In 2014, FDC attempted to secure approval from the National Department of Public Works to either donate or sell the property. However, the department raised concerns over the justification for donating the land rather than selling it at market value.

Over the following years, progress stalled, with FDC continuing to push forward despite the lack of necessary approvals and growing concerns from both the Traditional Council and legal experts. In 2021, FDC entered into a long-term lease with Maanankoe Filling Station under Litabe’s operation, for nearly 10 years.

This lease allowed Litabe to sublet the property to an oil company of his choice. However, concerns arose when it became evident that FDC was working to sell the PTO land rights to Litabe for R1.3 million, a sum widely considered undervalued.

Sources within the FDC have now revealed that the sale was executed without the necessary approvals. Notably, the MEC of the Department of Economic, Small Business Development, Tourism, and Environmental Affairs (DESTEA) and the Executive Authority did not authorize the transaction, as required by Section 54(2)(d) of the Public Finance Management Act (PFMA).

This failure to secure approval has triggered suspicions of unlawful conduct. The deal, conducted without a signed agreement or the required approvals, raises serious concerns about fraud and theft. Experts believe that this could constitute a violation of the Prevention of Organized Crime Act (POCA) if it was done with intent to deceive or unlawfully enrich one party at the expense of the rightful owner.

The Maanankoe Filling Station deal has become a flashpoint in the ongoing debate over governance and accountability within South African state-owned entities. Despite multiple warnings from legal experts and the Tribal Council, FDC proceeded with the sale of PTO land without the proper approvals, triggering allegations of fraud and misconduct.

As the situation unfolds, there is growing pressure for investigations into the legitimacy of the transaction and the potential consequences for those involved.