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Tshepo Malema, 28, and the deposed youth leader's childhood friend Collins Foromo, 32, appeared in the Polokwane Magistrate's Court on charges of fraud.
The two are out on R5,000 bail each and their case was postponed to January 29.
They were arrested in a sting operation by the Hawks. Malema and Foromo are accused of committing fraud by submitting documents that misrepresented facts about their companies in 2011 and 2012.
This was after the provincial department of roads and transport had set up a programme to fix roads "damaged by rains".
A total of R63-million was spent on tenders to fix the alleged potholes, but investigations by the crime busting unit found that there was no work to be done.
It was also found that some department officials had colluded with the businessmen to pay them to "repair" roads that were actually not damaged.
On Wednesday, Makgomo Kgosana, a senior official in the department, also appeared in court where she was released on R10,000 bail for fraud, theft and corruption relating to the tender awarded under controversial circumstances to On-Point Engineering, in which the former youth leader's family trust is a shareholder. The company had unlawfully won the tender worth R52-million.
Julius Malema will make a second appearance in court today with On-Point chief executive Lesiba Gwangwa and four other business associates.