Construction companies fall victim to scam.

The Free State department of local government and housing has opened a case against a group of men suspected of duping construction companies into paying for fraudulent tenders.

The scam is believed to have cost businesses thousands of rands.

The main target has been companies located in the towns of Bethlehem and QwaQwa, but a Kroonstad businessman has also allegedly been swindled.

Now there are fears that the criminals might have hit businessmen in other provinces.

The local government and housing spokesperson, Senne Bogatsu, said last week that three men who masqueraded as senior officials from the department approached owners of companies and informed them that they had won RDP housing construction contracts each worth R23m.

The gang allegedly duped the companies with fake contracts that bear the department's outdated logo.

They then requested registration fees to secure the tenders.

Moleko Mofokeng, a director in the department, said they did not ask entrepreneurs who won housing tenders to pay registration fees to secure contracts.

He added that the department got wind of the scam in December.

A group of businessmen came to the department's offices to collect appointment letters.

It was only once they had inquired about the contract they thought they had won that they realised they had been conned.

"It was brought to our attention by one of our officials and at that time we decided to hand the matter over to our anti-corruption unit to investigate," said Mofokeng.

"Subsequently, a number of complaints came in," he added.

After the anti-corruption unit's investigation the matter was reported to the police.

Mofokeng said that although a large number of entrepreneurs fell victim to the scam, only four of them had come forward.

Others refused to provide their details as they did not believe what the department was telling them.

Some businessmen who reported the matter were too embarrassed to disclose exactly how much money had been lost, but Mofokeng believed the amounts ranged between R6 000 and R200 000.

Police spokesperson Superintendent Motantsi Makhele confirmed that the police were investigating three cases of fraud worth R360 000.

No arrests have been made.