KwaZulu-Natal's housing department spokesman Mike Gjestland yesterday directed the spotlight on to Dumisani Makhaye, ousted as Housing MEC, saying the arrest of a senior official under his jurisdiction over a property scam raised questions.

"What needs to be asked is whether Makhaye knew about this, and if not, why not," said Gjestland.

He made the remarks soon after the arrest of suspended housing director general, advocate Emmanuel Khoza, for alleged housing corruption.

"Thus far, it has been established that a total of at least R1,6 million is alleged to have been paid in gratitude by an estate agent to Khoza," said police superintendent Vish Naidoo.

"Khoza handed himself over to the police in John Ross House in Durban. Estate agent Rajanderan Pillay (32) was arrested at his house in James Hervert Avenue in Pinetown," said Naidoo.

The charges follow an investigation into 27 transactions where the department of housing purchased property fo rR72 million - which independent valuators put at R43 million.

Most of the buildings were bought by the department of premium much higher than other estate agents' valuations, giving rise to fears that kickbacks had been built in, said Gjestland.

The properties in question include the once famous Durban beach from landmark, the Four Seasons Hotel. According to the charges, the department acquired the unused hotel for R15 million despite the current market value of only R3,2 million.

Police claim that Khoza'a alleged accomplice, Pillay, masqueraded as an estate agent and his company, SAI Enterprises, was involved in the deals under scrutiny. The arrests follow the institution of a forensic audit earlier this year by Premier Lionel Mshali and new Housing MEC Reverend Wilson Ngcobo into the allegations of irregular business transactions at the housing department.

The investigation centres on several property deals in which the department acquired old inner city buildings to be used for low-cost housing purposes.

There are no details of Pillay's registration with any professional estate agents' bodies. Investigators say his last employment record was as a clerk at the SA Blood Transfusion Services.

The suspects appeared in the Durban Magistrate's Court yesterday where bail in the amount of R500 000 each was granted. The case was adjourned to April 17.

With acknowledgements to Musa Ndwandwe and the Sowetan.