By Lehlohonolo Lehana.
Photo Credit: Dasen Thathiah.
Special Investigating Unit (SIU) conducted raids related to Covid-19 Temporary Employer/Employee Relief Scheme (TERS) fraud worth R161 million in Tshwane and KwaZulu-Natal on Thursday.
In Tshwane, the operation took place at the Department of Labour’s Unemployment Insurance Fund (UIF) offices.
Over 600 kilometres away, officials arrived at the home of an alleged kingpin in Scottburgh, along the south coast of KwaZulu-Natal.
Significant corruption, fraud, and maladministration were identified within the UIF TERS, a fund established to provide financial relief during the COVID-19 pandemic.
Investigations by the SIU and the Auditor-General exposed substantial system weaknesses that allowed for widespread abuse.
The operation is supported by the SAPS National Intervention Unit, the Directorate for Priority Crime Investigation (Hawks), and the Tactical Response Team.
According to the SIU, the syndicate submitted false TERS applications for individuals who were not employed by the applicant companies.
Funds meant for workers were instead diverted among the syndicate members, with transactions indicating potential money laundering.
SIU spokesperson Kaizer Kganyago said, the operation, authorised by a warrant issued by the Special Tribunal, targeted multiple premises, including offices, residences, and the UIF Head Office in Pretoria.
It is linked to 16 companies and over 35 individuals suspected of being central to the fraudulent scheme.
Kganyago said the SIU investigation has uncovered evidence suggesting a well-organised syndicate orchestrated the submission of false TERS applications on behalf of individuals who were not employees of the applicant companies.
The substantial funds received were not paid to workers, instead, they were distributed among syndicate members in patterns consistent with money laundering.
The three primary targets in both provinces are Nakomang Trading Enterprise (Gauteng), which is alleged to have received R19,183,197.34; Lubelo Hlomuka Holdings t/a SA Scrum Assembly (KZN/Gauteng), which received R15,917,398.98; and Bokoharama Construction (KZN) which received R18,197,289.94. Its director is a key person of interest and a local councillor, Thamsanqa Madlala, who is the councillor at Ray Nkonyeni Municipality. Madlala is a member of MK Party.
Other major companies searched include Aventador Gate (Pretoria), which received R3.8million and several based in KwaZulu-Natal.
Kganyago said, the investigators seized documents, digital devices, and other evidence, which will undergo forensic analysis.
The SIU intends to pursue civil action to recover state funds, and any evidence of criminal conduct will be referred to the National Prosecuting Authority (NPA).
This operation marks one of the largest coordinated raids in South Africa’s recent efforts to recover misappropriated TERS funds during the widespread Covid-19-related financial fraud.
Meanwhile the Congress of South African Trade Unions (COSATU) applauded search and seizure operations in Gauteng and KwaZulu-Natal.
In a statement, the federation said, “It is critical that the SIU, with the support of law enforcement, leave no stone untouched during these long-sought investigations. Those who stole from the UIF, be they officials, members of society, employers or politicians must go to jail and their stolen properties be returned to the UIF.”
“Workers deserve a well-run UIF where employers can register employees with ease, where workers’ deferred wages are secured, and where workers can access their maternity, parental and adoption leave, unemployment and temporary relief funds with ease. The days of workers being made to queue for days at a time or being sent from pillar to post to access their funds must end.”