Category: Crime & Corruption News

The Passenger Rail Agency of South Africa (PRASA) has welcomed the decision by the Germiston Magistrate’s Court to deny bail to Pontsho Moyo, a manager at agency’s Elsburg depot, who allegedly stole the agency’s assets.

Moyo was arrested over a week ago for alleged theft of PRASA assets from the agency’s premises.

He appeared in court on Thursday with former PRASA employee Edgar Gumede.

“Moyo allegedly ordered the assets to be taken to the premises of Gumede, a former employee of PRASA running his own rail equipment supply company,” PRASA said.

Gumede was granted bail of R40 000 with strict conditions. He has been ordered to not leave the country or interact with State witnesses.

“PRASA is pleased with the decision and that the court views the charges against the accused as very serious. The court pronounced that the attack on PRASA’s assets and infrastructure is an attack against the country and low-income earners, who rely on PRASA for affordable means of transportation,” the agency said.

PRASA said it views this judgment as an important milestone in the fight against the theft and vandalism of the agency’s infrastructure.

PRASA continues to cooperate with the South African Police Service and other important stakeholders, including the National Prosecuting Authority, to ensure that its infrastructure and network are protected from acts of vandalism and theft.

The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) has resolved to call all municipalities and provincial governments to appear before the committee in order to deal decisively with corruption and mismanagement of municipalities.

Committee chairperson Faith Muthambi said the committee will start with municipalities whose executive leaders currently serve on the national leadership of the South African Local Government Association (SALGA).

Muthambi emphasised that committee members, including provincial MECs and senior managers of the national Department of COGTA, must be present when the municipalities appear before the committee.

“We will start with the national leadership of SALGA, who also serve as mayors of various municipalities. It is clear that some executive members of SALGA have not complied with legislative requirements to submit financial and other reports on behalf of their municipalities,” Muthambi said on Wednesday.

Muthambi bemoaned the fact that municipalities led by mayors and senior executives, who are members of SALGA, fail to comply with basic finance and governance legislation.

“This contradiction must be exposed,” she said.

Muthambi has also requested the Department of COGTA to provide the committee with a list of dysfunctional municipalities.

She said the municipalities will be prioritised and called to appear before the committee.

Oversight visits to municipalities

Meanwhile, Muthambi said the committee will seek permission from the House chairperson to be allowed to continue with its oversight work during the current constituency period.

She said the committee will be divided into two groups to conduct physical and virtual oversight visits to the provinces.

“We need to strengthen monitoring, evaluation and oversight over all the municipalities in the country and to restore public confidence in municipalities. The committee will not allow the rot to continue or the status quo to worsen under its watch,” the chairperson warned.

Muthambi said the recent Auditor-General report exposed the state of municipalities. She warned that any departmental official found lying to the committee will be charged and possibly imprisoned.

“The committee believes that individuals reporting to us must do so with due respect for Parliament, as any report submitted to the committee is a report which is submitted directly to Parliament,” she said.

The committee will call the Ministers and MECs to account on the interventions already undertaken in the provinces and municipalities placed under administration.

Acting Gauteng Health MEC, Jacob Mamabolo, has expressed disappointment at the discovery of personal protective equipment (PPE), which was found dumped in a river in Pretoria on Sunday.

A video of the dumped PPE consignment was circulated on social media at the weekend.

Mamabolo was made aware of the discovery during an inspection of facilities across the province on Sunday. The footage shows the consignment floating in a river in Irene.

“The Acting MEC visited the site where the said PPE was dumped. He expressed disappointment that people would dump PPE during a global pandemic and additionally pollute the environment. He called on the police to track down whoever is responsible and ensure that they are brought to book.

“The MEC has directed the [provincial Department of Health] to check if any of the PPE matches those at our various storage facilities,” the department said in a statement.

Since last Friday, the MEC has visited various health facilities across the province, interacting with senior managers. During the five days, Mamabolo also visited PPE storage facilities.

The department said the visits were to ensure a continuation of the comprehensive health response to COVID-19 while MEC Dr Bandile Masuku is on special leave.

Mamabolo has visited three warehouses in Centurion, Roodepoort and Vanderbiljpark to inspect PPE stock levels.

He has also visited various facilities in the five districts as follows: regional hospitals (Sebokeng, Thelle Mogoerane, Pholosong, Far East Rand, Mamemlodi, Leratong, Thambo Memorial and Edenvale); district hospitals (Kopanong, Bertha Gxowa, Jubilee, Yusuf Dadoo, Caltonville, Heideliberg and Tshwane District Hospital); tertiary hospitals (Hellen Joseph, Kalafong and Thembisa) and academic hospitals (Chris Hani Baaragwanath, Chrlotte Maxeke, Dr George Mkhari and Steve Biko), including Johan Heyns Community Health Centre and Sterkfkontein Specialised Hospital.

At the hospitals, Mamabolo discussed with senior clinical staff the management of confirmed COVID-19 positive patients, patients under investigation and the fever tents that are meant to augment designated wards for COVID-19.

Facilities were also requested to give an update on the rate of COVID-19 infection among staff members.

Mamabolo interacted with organised labour, who gave him a sense of what is happening concerning the provision of PPE to staff members. Some of the unions expressed satisfaction, while others raised concerns about the quantity of PPE provided.

“The observations made will help strengthen the response of the provincial government to contain the spread of COVID-19. Our priority continues to be saving lives and mobilising sectors of society to work together with government in the fight against Coronavirus,” said Mamabolo.

The Competition Commission has slapped Cambridge Food Jozini, in KwaZulu-Natal, with a fine for hiking the price of 25kg maize meal during a lockdown.

Following a complaint, the investigation revealed that before the declaration of the national state of disaster, Cambridge Food Jozini was selling the 25kg top white maize meal at far lower prices.

However, in April, the retailer increased it from R129.99 to R159.99 without a corresponding increase in costs, which contravenes the Competition Act, read together with Regulation 4 of the Consumer Protection Regulations, the Commission found.

“The Competition Commission welcomes the decision of the Competition Tribunal on 28 July 2020 that confirms as order the consent agreement between the Commission and a KZN based company Cambridge Food Jozini, a division of Cambridge Food (Pty) Ltd, and a subsidiary of Massmart Holdings Limited,” the Commission said.

Cambridge Food Jozini has since agreed to reduce its gross profit margin on the 25kg top white maize meal for the duration of a national state of disaster.

In addition, the food retailer will also donate essential goods to Siyaphambili Qondile Home Based Care Project 1 to the value of R24 947.

According to the Commission, it has referred and settled 30 COVID-19 related cases to the total value of R15 380 849.58 of which R5 573 380.88 has been donated to the Solidarity Fund.

“There have also been donations of essential goods to affected communities to the total value of R 551 886.70.”

Meanwhile, the Commission urges firms to comply with the Competition Act during the state of national disaster and desist from exploiting consumers.

The Department of Social Development in KwaZulu-Natal has suspended a number of high-ranking officials implicated in the procurement of blankets and personal protective equipment (PPEs).

This follows a forensic investigation report conducted into the procurement of the goods.

The procured goods also included sanitisers, wet wipes, soups and towels.

Social Development MEC, Nonhlanhla Khoza on Tuesday said a number of allegations that were reported in the media prompted the investigation.

The Provincial Executive Council requested Provincial Treasury to conduct a forensic investigation into the alleged irregularities.

She said the investigation report had recommended that disciplinary action be taken against the Acting Head of Department, Acting Deputy Director-General, Chief Financial Officer (CFO), Acting Supply Chain Manager, Cluster Chief Directors, and Supply Chain Management (SCM) officials.

The officials are accused of contravening, among others, sections 45, 81 and 88 of the Public Finance Management Act (PFMA) of 1999.

The officials are also facing charges of misconduct in terms of Chapter 7, read with various SCM prescripts.

Khoza acknowledged the work done by a team of investigators set up by the Provincial Executive Council of KwaZulu-Natal to unearth malfeasance in the procurement of goods to be used in the fight against the COVID-19 pandemic.

The MEC also welcomed the investigation report and said the department would ensure that all those implicated would be held to account.

Rooting out corruption

She said that the suspension of officials, including the removal of one employee in her office shows the department’s commitment that it will not tolerate corruption.

“As a department we were taken aback by the outcome of the forensic investigation report, as presented by Premier Sihle Zikalala. The information unearthed by the investigation points to the high level of recklessness by officials tasked with safeguarding taxpayers’ monies,” Khoza said.

Khoza said she has since instructed the Head of Department, as an Accounting Officer, Nelly Vilakazi, to ensure that the recommendations of the report are implemented to the latter.

The MEC said that the department takes a strong exception to corruption and maladministration, especially during this period, when people are battling the scourge of COVID-19 and the ripple effect it has on other aspects of life.

“We will ensure that taxpayers’ money that was spent irregularly is recovered. Not only will we deal with officials, but we will also deal with companies that were involved in the process,” said the MEC.

She added that the department has engaged a multidisciplinary team, comprising officials from Social Development, Office of the Premier, and the Department of Public Service and Administration (DPSA), to ensure the speedy implementation of the recommendations of the report.

The department has also opened two criminal charges with Directorate of Priority Crime Investigation (Hawks).

“One would like to thank Premier Zikalala for providing leadership on the matter and we will ensure that we complete the process by ensuring accountability for each and every cent spent.  We would also like to thank members of the media for their role in the matter,” MEC Khoza said.

Twenty-three people, including officials of the South African Social Security Agency (SASSA), have appeared in court on charges of alleged theft, fraud and corruption.

The group appeared in the Nelspruit Regional Court on Tuesday, said the Hawks.

The 23 officials and accomplices have been warned to appear in the same court again on 4 September 2020.

In April 2016, the officials approached and recruited individuals to submit their identity documents to register them for disability grants.

The alleged fraudulent grants were used to channel money to the officials whilst the so-called beneficiaries were compensated with a small portion.

“The matter was reported to the police and the investigation revealed that all beneficiaries were in fact not disabled despite having been registered as such.  The investigation around the matter was finalised and the accused were served with court summonses to appear before court,” said Hawks Mpumalanga spokesperson, Captain Dineo Lucy Sekgotodi.

A joint law enforcement operation has slammed the brakes on a sophisticated pyramid scheme that fleeced 230 000 unsuspecting investors of millions of rands amid the COVID-19 lockdown.

The National Prosecuting Authority, Financial Intelligence Centre (FIC) and the National Consumer Commission (NCC) gave details on the “Up Money” pyramid scheme at a press briefing on Tuesday.

The scheme was probed by the NCC after an East London resident laid a complaint.

Acting NCC Commissioner Thezi Mabuza said a subsequent investigation revealed that Up Money (Pty) Ltd (Up Money) contravened the Consumer Protection Act by promoting and causing members of the public to join and participate in a pyramid scheme.

“Following a request from the NCC and the analysis by the FIC, Up Money’s bank statements, the agencies established that directors of the entity, between 4 May and 2 July 2020, made 221 976 deposits, of R180 each, into an FNB business account,” Mabuza said.

The deposits, she said, totalled R42 million.

“Over R40 million was deposited through points of sale and purchases at various retail stores. An amount of R3.5 million was transferred from the FNB account into another account held by another company called UniitCo,” Mabuza said. The two companies, she said, are linked through directorship and business address. An Up Money director is also the sole director of UniitCo.

Between 24 May and 23 June, UniitCo paid for the purchase of three luxury vehicles, namely an Audi TT, a Hummer H3 and a Jaguar XKR Coupe.

The vehicles, Mabuza said, were not registered as company assets, but registered in the name of a director.

In the wake of this, the AFU sought and was granted a preservation order by the Johannesburg High Court to freeze bank accounts worth more than R18 million and a number of luxury vehicles.

Prosecution

Deputy National Director of Public Prosecutions and head of the Asset Forfeiture Unit (AFU) of the NPA, Advocate Ouma Rabaji-Rasethaba, told reporters that criminal prosecutions will get underway.

“The criminal charges may include fraud and contraventions of various sections of the Prevention of Organised Crime Act (POCA). The sections might be racketeering, money laundering, fraud, theft, assisting another to benefit from proceeds of unlawful activities and acquisition, possession or use of proceeds of unlawful activities, as well as assisting another to benefit from proceeds of unlawful activities,” said the Advocate.

The application by the AFU is part of the interventions by the NCC and the FIC to salvage more than 228 900 investors, who were defrauded in the multimillion Rand scheme.

Use of social media and recruitment

Rabaji-Rasethaba said the pyramid scheme, which mainly used social media to recruit members, was neither registered with the Reserve Bank, a registered stokvel, nor a financial services provider.

“New participants were required to pay a once-off joining fee of R180. This qualified them for a meat pack. The new members were then required to recruit five other new participants. This process was termed level one,” she said.

The original investor would then help the five he or she recruited to sign up their five new members each. This would then ensure that the original recruiter moved to level two, whose benefits were a meat pack, groceries and R500.

When those on level one were moved to level two by their recruits, the original organiser was pushed to level three.

The new participants made up the base of the pyramid and provided funding for participants who were recruited earlier.

Those who joined earlier were pushed to the top by the new recruits.

The appointment of the new Secretary for Defence, Gladys Sonto Kudjoe, signifies the continued empowerment of women in the defence sector, says Parliament’s Portfolio Committee on Defence and Military Veterans.

The committee welcomed the appointment of Kudjoe in a statement on Tuesday.

“As the country commemorates Women’s Month, we welcome the appointment of Kudjoe in this highly crucial position and we believe that her experience, strength and vast knowledge of the defence industry will contribute to bringing the much-needed stability to the department,” said committee cqhairperson Cyril Xaba.

Kudjoe’s appointment was announced last month ahead of her scheduled first day in office on 1 August 2020.

Kudjoe served as South Africa’s ambassador to Sweden between 2002 and 2006, and Egypt from 2006 to 2010.

She also held several senior positions in the Department of International Relations and Cooperation.

Kudjoe was the first female Director-General of the State Security Agency (SSA) appointed in 2013. She was with the then South African Secret Service (SASS) for about 13 years before.

“We realise the enormous task ahead and the myriad of challenges facing the department and thus we wish her well in her new role,” Xaba said.

Xaba has also, on behalf of the committee, expressed good wishes to the outgoing Secretary for Defence, Dr Sam Gulube, who first joined the South African National Defence Force as a medical doctor in the Military Health Services.

Dr Gulube was a key role-player in the drafting of the 2015 Defence Review.

“Dr Gulube’s contribution to the local defence industry strategy and his focus on the Defence Broad-Based Black Economic Empowerment Sector Code are some of the key attributes which he will be remembered for.”

“On behalf of the committee, I wish to thank Dr Gulube for his service to the country and wish him well in his much deserved retirement,” Xaba said.

President Cyril Ramaphosa has vowed to nip in the bud alleged corruption in the procurement of much-needed goods and services in the fight against COVID-19.

The President made the declaration on Monday in his weekly newsletter after the public was recently inundated with such allegations of personal protective equipment prices being inflated, food parcels being stockpiled as well as state resources being illegally diverted from the vulnerable and destitute.

The funds being allegedly looted are part of the R500 billion relief package announced by government in March. COVID-19 in South Africa has already infected over 500 000 people, while claiming over 8 000 lives.

Describing the apparently pillaging as “heinous”, he vowed that perpetrators would be dealt with “decisively and harshly”.

“Attempting to profit from a disaster that is claiming the lives of our people every day is the action of scavengers. It is like a pack of hyenas circling wounded prey,” the President wrote.

“As we find ourselves in the grip of the greatest health emergency our country has faced in over a century, we are witnessing theft by individuals and companies with no conscience.”

The insidious behaviour was not limited to smaller companies but large corporates as well, said the President. Some have already been caught, investigated, found guilty and fined for excessive pricing.

“These stories have caused outrage among South Africans. They have opened up the wounds of the state capture era, where senior figures in society seemed to get away with corruption on a grand scale,” President Ramaphosa said.

This, he said, was threatening to undo the work done to disrupt and dismantle the networks that had infiltrated government, state companies and even our law enforcement agencies to loot public resources.

“We have rebuilt vital institutions like the National Prosecuting Authority, SA Revenue Service and the Hawks. Through the establishment of bodies like the Investigating Directorate in the NPA, we have strengthened the hand of law enforcement to investigate and prosecute these crimes. And through the establishment of the SIU Special Tribunal, we have increased our capacity to get back funds stolen from the state.”

Despite this, President Ramaphosa said it was clear more needed to be done to decisively curb the scourge.

Just over a week ago, the President signed a proclamation authorising the Special Investigating Unit (SIU) to investigate any unlawful or improper conduct in the procurement of goods and services during the national state of disaster.

This is a broad remit that extends across all spheres of the state and provides for civil proceedings to recover misappropriated funds.

Every six weeks, the President will receive interim reports on the cases at various stages of investigation and prosecution. When investigations yield evidence of criminality, they will be speedily referred for prosecution.

“Experience here and in many other countries shows that a multidisciplinary approach to tackling the commission of alleged criminality is needed for the fight against corruption to be successful. A broad range of investigative and prosecutorial capabilities need to be brought together under one roof,” the President writes.

“‘Fusion centres’ that draw together different agencies for better information and intelligence sharing, to pool resources and to streamline operations are common practice in a number of countries.”

A special centre has been established that brings together the Financial Intelligence Centre, the Independent Police Investigative Directorate, National Prosecuting Authority, the Hawks, Crime Intelligence and the SAPS Detective Service, South African Revenue Service, Special Investigating Unit and the State Security Agency. The President said this will immensely strengthen government’s response.

“These bodies are now working together not just to investigate individual allegations, but also establish linkages between patronage networks that are trying to hide their activities. Because of this cooperation, prosecutions should proceed more quickly and stand a better chance of success,” the President wrote.

President Ramaphosa added that government needs to, for example, look to extend the responsibility of its multi-disciplinary team of investigators and prosecutors beyond COVID-related crimes.

“We should use the current approaches and methods to dramatically strengthen the fight against corruption,” he said.

“If, as public servants and political office-bearers, we claim to be serious about restoring public trust that has been severely eroded by corruption, we must avoid even the perception of conflicts of interest.

“If as public servants and political office-bearers we truly care about the public whose interests we claim to represent, we must allow ordinary members of the public who have interest in doing business with government a fair chance to bid for such business opportunities, instead of passing on inside information about opportunities to our families and friends.”

While there were regulations in place to discourage public servants from doing business with the state, declarations of interests in anyone bidding for state work, including whether anyone connected to the bid is employed by the state, this was clearly not enough, he said.

“While everyone in South Africa has a right to engage in business activities, we are faced with the real problem of families and friends of political office-bearers or public servants receiving contracts from the state,” he said.

“Not all conduct of this sort is necessarily criminal, but it does contribute to a perception and a culture of nepotism, favouritism and abuse. And it undermines public confidence in the integrity of our institutions and processes.

“We are determined to finally deal with the entrenched patronage networks that enable government employees to bid for state contracts through their friends and relatives. This requires not only better laws and stronger enforcement, but also political will and social mobilisation.”

Eskom and the Special Investigating Unit (SIU) on Monday issued summons in the North Gauteng High Court to recover funds from former Eskom executives, former Board members, members of the Gupta family and their associates, as well as others.

“The funds were lost in a concerted effort corruptly to divert financial resources from Eskom, to improperly and illegally benefit the Gupta family and entities controlled by the said family and their associates during their 2015-16 acquisition of the operations of Optimum Coal Holdings Limited (OCH),” a joint statement by Eskom and the SIU said.

The delictual claim for damages that Eskom suffered relates to the recovery of approximately R3.8 billion in funds illegally diverted from Eskom to help the Gupta family and its associates to acquire the operations of OCH, which owned the Optimum Coal Mining (Pty) Ltd that supplied the Hendrina power station with coal.

The further delictual claim for damages pertains to the payments that were unlawfully made to Trillian by Eskom Executives.

The defendants are former Eskom employees Brian Molefe (Group Chief Executive Officer); Anoj Singh (Chief Financial Officer); Matshela Moses Koko (Group Executive: Generation and former Acting Group Chief Executive Officer); as well as Suzanne Margaret Daniels (Company Secretary and Group Legal Head).

Eskom also seeks damages against non-executive directors Baldwin Ben Ngubane (Board Chairman); Chwayita Mabude (Board Member); Mark Vivian Pamensky (Board Member); Mosebenzi Zwane (former government minister of Mineral Resources); Salim Aziz Essa; Rajesh Tony Gupta; Atul Gupta and Ajay Gupta (collectively referred to as the “Gupta Brothers”).

“All of the former executives and Board members breached their fiduciary duty of care and good faith to Eskom, and acted in a concerted State Capture effort with the Gupta Brothers, Mosebenzi Zwane and Salim Aziz Essa to illegally divert funds from Eskom.

“The Gupta Brothers owned the majority shares in entities (Oakbay Investments Limited and Fidelity Enterprises Limited) that in turn owned the majority shares in Tegeta Resources and Exploration,” the entities said in the statement.

The Gupta Brothers are currently fugitives from justice in South Africa and are based in Dubai; as well as Salim Aziz Essa, who is also a fugitive from justice in South Africa and based in Dubai.

“These 12 defendants acted in a concerted effort whose objective was the corrupt, alternatively irregular, diversion of resources from Eskom. As a result of their actions in the acquisition of OCH during this period, Eskom suffered at least R3.8 billion in losses which it is legally obliged and morally burdened to recover, together with the interest thereon,” the statement said.