A Gauteng Partnership Fund (GPF) investigation has found that the loans it granted to Deputy President Paul Mashatile's son-in-law Nceba Nonkwelo's company were possibly reckless and not in the GPF's best interest.

At a press conference on Monday, Human Settlements MEC Lebogang Maile, flanked by GPF CEO Lindiwe Kwele, presented the report following an investigation by Gildenhuys Malatji Incorporated (GMI).

The investigation sought to determine the circumstances around the loans totalling R24.9-million to Nonkwelo's company, Nonkwelo Investments, between 2013 and 2017. The loans were for the construction of student accommodation in Highlands, Johannesburg, that was never done.

Shortly after News24 published these revelations in July, Maile ordered the GPF board to launch the investigation and report back to him within 30 days. It has been three months since that deadline passed.

The investigation found that, following a change in the scope of the project from affordable housing to student accommodation, which was legally "uncertain", any approval of funding would be irregular and "not in the best interest of the GPF".

"Unless there is a reason for this, it would otherwise have been an arbitrary and possibly a reckless decision. By stepping in and approving a senior funding loan to Nonkwelo Investments, investigators expressed a view that this caused GPF to continue to assume an even greater risk," it said.

It further found that the project "was not viable".

The GPF entered into a settlement agreement with Nonkwelo Investments, the nature of which was not disclosed.

"Nonkwelo Investments failed to make a single payment at the end of the moratorium period, as such was in material breach of the second loan agreement," the report concluded.

According to Maile, "We have taken full cognisance of the findings in the investigation report, including the financial and legal implication, as well as the institutional integrity of the GPF as as important entity of the Gauteng Department of Human Settlements.

"Whilst the findings are clear about the governance pitfalls, we are however of the view that the recommendations are not conclusive. Accordingly, we have asked the board to institute a process of reviewing them with an intention of strengthening the areas of weakness."