The City of Cape Town and Denel Aviation have raised concerns about a company "selling" Denel land for low-cost housing to buyers who are asked to hand over a R439 processing fee and up to R2 479 in savings.

The city said hundreds of people had handed over money to Nationwide Mortgage Centre, which promised them housing on the land.

The land belongs to Denel Aviation. Denel says it does not plan to sell it for residential use.

The Cape Times has in its possession copies of letters from Nationwide Mortgage Centre addressed to potential home owners. In one, Nationwide Mortgage's chief executive Ashraf van Wyck says a house in Swartklip East would cost R28 279 and the processing fee R439. He also claims that Nationwide Mortgage is a member of the Cape Town Regional Chamber of Commerce and Wesgro, the Western Cape investment and trade promotion agency. Both denied that Van Wyk's company was a member.

A marketing leaflet also states that the company had sold 335 houses by September 22.

When quizzed about this, Van Wyck said it was not true and he had inserted it for marketing purposes. He also said he kept the money he collected in a money market account.

In another letter to a factory boss whose employees were interested in buying low-cost homes, Van Wyck claims that "the city council confirmed that they are interested to see this project coming about because they are desperate for housing. The only involvement we need from the city is that they must confirm that they will invest in the civil infrastructure. In our meeting they have agreed (to) give us this undertaking".

The city's housing spokes-man Andries Cornelissen said the council had not agreed to install infrastructure on the site.

Van Wyck had met with mayoral committee member for housing Carol Beerwinkel recently, where she asked him to pay back the deposits and rectify his marketing material.

"Beerwinkel said Van Wyck needed to provide written proof from Denel that they were making land available for this housing project. He has not yet given us the proof. There is no link between the city and Nationwide Mortgage. We want to warn people against falling for projects without checking with government departments first," said Cornelissen.

Yesterday Van Wyck told the Cape Times: "We have submitted an unsolicited bid for the land which is owned by Denel. We have been negotiating with them since last year."

Basch responded: "Denel has received an unsolicited bid from Nationwide Mortgage but we have no intention of selling this land for residential housing. The land surrounds an explosives and ammunition plant."

Van Wyck yesterday threatened to seek a High Court interdict to stop the Cape Times publishing this story.

With acknowledgements to Nazma Dreyer and the Cape Times.