The Knysna municipality has refused requests for information regarding a lease agreement with Grey Elephant Investments (GEI), citing incorrect official channels and other reasons.

ActionSA announced that they had filed a Promotion of Access to Information Act (PAIA) application to obtain the lease agreement, following the municipality's announcement earlier this year that some departments had moved into Knysna Mall under a three-year lease with GEI.

GEI, one of the municipality's major debtors, allegedly owed R28 million. A settlement of R10.2 million was agreed upon pending mutual agreement on the billing.

ActionSA's Julie Seton criticized the municipality's lack of transparency, noting concerns over supply chain regulations and the use of public funds. She expressed dismay over the refusal to provide the lease agreement, which she called a public document.

Grey Elephant has asserted that "there is no unlawful debt owed to the Knysna Municipality, and there was no extraordinary debt write-off. Assertions to the contrary are electioneering misinformation and defamatory."

GEI claims that they had resolved the rates dispute with the Knysna Municipality, following the municipality's prescribed formal dispute process. GEI's accounts were reviewed and corrected to address overcharges of approximately R400,000 per month, which had been contested since 2019, and blamed the confusion on the high turnover of administrative officials.

In October 2022, GEI successfully obtained a High Court interdict against the Knysna Municipality, compelling them to address the issue according to their policy. Subsequently, GEI's proposed settlement for the rates dispute was unanimously approved by Knysna Municipality's Council on July 31, 2023.

However, many are not satisfied with the present explanation, especially since GEI and the municipality continue to do business despite the apparent legal acrimony.

Municipal manager Ombali Sebola stated that the PAIA application was denied due to the inclusion of a third party and the need to comply with the POPIA Act. Seton indicated they would appeal the decision.

A GEI spokesperson denied the outstanding debt allegations, stating they were overcharged extensively and not lawfully indebted to the municipality, as confirmed by National Treasury.

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