27 August 2010
Eight people appeared in court in two provinces on Wednesday following a R200-million tender fraud crackdown by South Africa's elite Hawks police unit and the Asset Forfeiture Unit.
The operation was accompanied by the seizure of assets including
a Lear jet, worth in total roughly the same amount.
The crimes relate to alleged attempts to defraud the KwaZulu-Natal provincial
health department by inflating the prices of water purification
equipment for hospitals. One purification plant valued at R420 000 was allegedly sold to the department for R4-million.
The men face fraud, corruption and money laundering charges and
charges under South Africa's Public Finance Management Act, the National
Prosecuting Authority (NPA) said.
In the Pietermaritzburg Magistrates' Court, former KwaZulu-Natal
health department head Busi Nyembezi was granted bail of
R50 000. Bail was
set at R20 000 for the department's former procurement officer, Mdu Ntshangase, and at R10 000 for the provincial legislature's current chief financial officer, Sipho Buthelezi.
In Cape Town's Specialised Commercial Crime Court, Uruguayan
national Gaston Savoi was granted bail of R200 000.
Savoi also represented accused number six on the charge sheet,
namely a company called Intaka Holdings, the company that allegedly supplied the water purification plants at the inflated rate.
His co-accused, businessmen Fernando Praderi (also an Uruguayan
national), Ansano Romani, Donald Miller and Ronald Geddes, were
granted bail of R50 000 each.
Praderi was a director of Intaka at the time the offence was
allegedly committed. Miller was the sales marketing manager for
Grotto Defrancheschi (Pty) Ltd, the company that developed
purification plants for Intaka.
Geddes owned Imvuso Stainless CC,
a close corporation which
allegedly supplied one of the quotations which formed part of the
fraud charges.
The case was postponed to December 2, when all the accused will
appear in the Pietermaritzburg Regional Court.
The state did not oppose bail for any of the eight.
The Cape Town men were, however, ordered to hand in their
passports, and not to interfere with anyone on a list of 56
potential state witnesses.
Savoi's advocate, Francois van Zyl, told the court his client
had been aware of the investigations since February 2007. He had
given three statements to the police, and had offered to hand
himself over when the police wanted to take him into custody.
Despite this, he has been arrested at his home, where police
arrived while he was in the shower.
In the same court, prosecutor Anton Steynberg told Magistrate
Amrith Chabillal that the accused had
undertaken to satisfy the
state's "misgivings" about certain funds that had been transferred
overseas.
They would make a full disclosure on the source of the funds.
He said Romani, Miller and Geddes were all South African
citizens with substantial business interests.
However they had not benefited directly from the fraud, he said.
The NPA said in a statement that the Asset Forfeiture Unit had
begun seizing assets worth an estimated at R200-million from Savoi
and Intaka.
These included the Shamwari Lodge in the Eastern Cape and the Lear jet, which was housed at Cape Town airport.
Also on the seizure list were a Maserati and a Ferrari.
Ithala Development Finance Corporation CEO Sipho Shabalala's
City Royal Hotel in Pietermaritzburg, his Othandweni farm, Range
Rover and Mercedes-Benz were also due to be seized.
Shabalala, the former head of the
KwaZulu-Natal treasury, was
however not among those arrested.
In a statement he said he was not aware of the basis upon which
the provisional order to seize his assets was obtained. He was
consulting his lawyers ahead of his appearance in court on
September 30 in a bid to have the order set aside.
NPA spokesman Mthunzi Mhaga said in the statement that Intaka
and its subsidiaries had allegedly fraudulently and corruptly
secured tenders to supply water purification plants to provincial
hospitals.
"It is alleged that in awarding Intaka the said tenders, certain
officials from the department had fraudulently colluded with Intaka
and certain entities without following the ... procurement process,"
he said.
"It is further alleged that Intaka colluded with those officials to
obtain fraudulent 'cover quotes' from two other Cape Town
businessmen and charged grossly inflated and
excessive amounts in
respect of goods supplied."
Mhaga said it had been established that Intaka allegedly
received a total payment of over R180-million from various
provincial departments in KZN and the Northern Cape in respect of
several other suspected fraudulent or corrupt tenders.
He told reporters in Cape Town that investigations on the
Northern Cape leg were continuing, and that the total amount
involved was in fact about R200-million.
Justice and Constitutional Development Minister Jeff Radebe said
in Pietermaritzburg earlier the arrests followed an investigation
which started in 2008.
"Today's arrests and seizure of assets must send a message as
clear as a bell to every doubting Thomas that there indeed is a
political will on our part to combat corruption," he said.
Sapa
