Purchasing Madressa land with Zakaat money

A certain Mufti Sahib in South Africa wishes to purchase new land for a Madressawith Zakaat money. He says that it is permissible.

His strategy is as follows:

(1) In the current madressa, there are 500 students eligible for Zakaat.
(2) Zakaat will be collected from the public and given to these 500 students by the Madresa.
(3) The students must then pay their Madresa fees with this Zakaat money given to them.
(4) The madresa will now have possesion of this money.
(5) The madressa will now use this money to purchase land.

Is this permissible? Is it permissible to contribute Zakaat to this Mufti Sahib?