Limpopo premier Cassel Mathale and chairman of the parliamentary finance committee, Thaba Mufamadi, are earning R40 million over eight years for renting one of their buildings to the Gauteng government.
The agreement with Manaka Property Investments, for the rental of Manaka House in Pretoria, was signed by the former health and social development department, Beeld newspaper reported on Monday.
The department had since been split into two, but both divisions still used the building. Manaka had amassed a property empire worth about R520 million. All the company's rental agreements came from government contracts.
Manaka's contracts with Statistics SA, the departments of water affairs and foreign affairs were signed without correct tender procedures being followed, it was reported.
Gauteng social development department spokesman Sello Mokoena confirmed the department paid a monthly rental of R468,645 (R5.6 million annually) to Manaka. With an annual rental increase of 10 percent between July 2009 and December 2016, R42 million would be paid to them.
Since the government contracts were signed, Mathale resigned as a director of Manaka, but was still a shareholder. Mufamadi, who was still a director, said he had no say in the operational running of the company.
David Lewis, head of Consumer Watch, said the situation amounted to a serious conflict of interest.
"The first question concerns the impression created when a commercial property company in which a provincial premier and the head of a parliamentary committee have interests, are found to be doing large scale commercial business with the state," he told Beeld.