They were "amigos" - a name they used affectionately in SMS correspondence with one another. Now the three friends - Ithala boss and former KwaZulu-Natal Treasury head Sipho Shabalala, former provincial health boss Busi Nyembezi and Cape Town-based billionaire Gaston Savoi - will stand trial accused of ripping off the government.
They, and others accused of being part of the R200-million racket, were subjected to early morning raids on Wednesday by the Asset Forfeiture Unit in which assets valued at R128-million, including their plush homes, smart cars and a R30-million Learjet, were "preserved" pending the outcome of criminal proceedings against them.
Savoi, Nyembezi and several others were also arrested and appeared in court on Wednesday. Shabalala's arrest is imminent - as is that of his wife, Ntombi, and Durban advocate Sandile Kuboni, according to an affidavit filed in the Pietermaritzburg High Court by top police government fraud investigator Lieutenant-Colonel Piet du Plooy, who along with forensic auditor Trevor White of PricewaterhouseCoopers has been probing their alleged crimes.
They will be charged with fraud, corruption and money-laundering next month, once White's forensic report is finalised. At the heart of the allegation against Shabalala is that he took a R1-million kickback from Uruguayan businessman Savoi in return for KZN government contracts. The money was allegedly laundered through the trust account of Kuboni, who was an attorney in a Durban law firm at the time.
Du Plooy said Savoi's explanation in a statement he gave to police that Shabalala had requested the money as a "donation to the ANC" was not true and that it was always a corrupt payment destined from the outset for Shabalala. While Kuboni had declined to make a statement so far, his trust account records did not reflect any payment to the political party, he said. "If it was meant to be a donation, then it would not have been necessary to disguise it? It is not a crime to make donations," Du Plooy said.
Shabalala stands to lose his Pietermaritzburg home, his farm and the R12-million Royal Hotel in Pietermaritzburg which he owns with his wife through Blue Serenity Investments. In total, it is alleged that in KZN and in the Northern Cape, the corrupt award of contracts to Savoi's Intaka Holdings cost the government as much as R200-million. Du Plooy says there are three separate criminal cases, which relate to the award of tenders to Intaka for the supply of oxygen and water purification plants at six times the price they should have been. Referring specifically to KZN's departments of health and local government, he says not only were legitimate procurement processes "fraudulently circumvented" but Intaka grossly inflated its prices.
The close relationship between Savoi and the two government employees was evident from the number of personal and after-hours exchanges of SMSes. According to White's report, filed with the court, Shabalala sent an SMS to Savoi saying: "Amigo, hearing went very well. Expecting results early next week." In another personal email from Savoi to Nyembezi, her refers to her as "Dear Amiga Busi".
Du Plooy says it was clear that while not a respondent in the asset forfeiture, nor named as one of those to be arrested, the MEC of health at the time, Peggy Nkonyeni, was also close to Savoi and also sent him personal SMSes. Du Plooy says Shabalala was the one who "initiated and directed" the fraudulent procurement process, waiving the requirement for tender or testing the market by obtaining competitive quotations, by deeming the acquisitions to be urgent. He said Shabalala was communicating with Intaka alone and not with other potential suppliers. He further chaired a committee which awarded the tender to Intaka, failing to recuse himself when there was apparent conflict of interest because his wife was involved in business with Savoi.
Also involved in the "collusion", Du Plooy says, are Intaka second-in-charge Fernando Praderi, Ronald Geddes of Westpro Fluid Handling Systems, and Donald Miller of Imvusa Stainless, who allegedly provided "cover quotes" to legitimise Intaka's inflated prices, and Ansano Romani, who allegedly assisted Geddes with the quotation. Within the government, he alleges that Department of Health supply chain manager Mduduzi Ntshangase and financial officer Alson Sipho Buthelezi, who is the deputy director-general in the KZN provincial Treasury, were also involved.
Sourcce: IoL
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