The High Court in the Eastern Cape Division, Grahamstown, has granted the Asset Forfeiture Unit (AFU) of the NPA a final forfeiture order of about R19 million against assets that were the proceeds of tender fraud.
In a statement, the National Prosecuting Authority (NPA) said the order follows the arrest of two senior former government officials and a businessman. The trio in August appeared at the King William’s Town Magistrates Court facing allegations of fraud, theft, money laundering and contravening the Public Finance Management Act amounting to just over R29 million.
At the time of his arrest, Stanley Khanyile, the Sedibeng District Municipality municipal manager, was the head of the Eastern Cape Department of Social Development (ECDSD) when the crime was allegedly committed.
Khanyile was joined in the dock by the former chief director in his office, Vuyokazi Sangoni, and businessman, Poovandaren Chetty.
They were arrested by the Anti-Corruption Task Team in Gauteng and in East London.
“They were granted bail of R50 000, R20 000 and R200 000, respectively. Khanyile had joined ECDSD after he left COGTA under a cloud of certain allegations levelled against him as a result of his involvement in certain unlawful contracts, including issues surrounding Umnotho,” said the NPA in the statement.
Last month, Khanyile was shot dead in Alberton, Gauteng, while out on bail.
He was charged with two counts of fraud and two counts of contravention of the Public Finance Management Act (PFMA).
Sangoni, on the other hand, was charged with one count of fraud, while Chetty faces 16 counts of fraud, 18 counts of theft, and 15 counts of money laundering.
In 2015, the ECDSD was to establish a Provincial Women's Development Resource Centre in Lusikisiki. The centre was intended to serve as a hub for socio-economic empowerment for women, with a focus on skills development programmes.
The NPA said the facility was intended to be a provincial hub for marketing the products produced by women co-operatives or groups that were funded by the department.
However, despite the department having identified existing government infrastructure in Lusikisiki as a suitable place to house the development resource centre, Khanyile flouted procurement processes to the benefit of Chetty for a R14.5 million contract.
In its statement, the NPA said Khanyile bypassed procurement processes and in July 2015, he signed a Service Level Agreement (SLA) with Chetty.
“The agreement was purported to have commenced in April 2015 and was to endure for a period of nine months until December 2015. It is alleged that before the contract was signed, Chetty did not present any business plan on behalf of Umnotho to the ECDSD, which was a requirement for funding in terms of the department’s policy for financially awarding service providers.”
The NPA said between July and August 2015, the ECDSD paid just over R14 million to Umnotho, owned by Chetty, who was the only designated signatory to its bank account.
For the 2016/2017 financial year, a tender was advertised by the ECDSD for the training and capacitation of co-operatives.
Khanyile and Sangoni are accused of colluding to ensure that Umnotho won the tender through unfair advantage in the procurement process. They allegedly flouted the prescribed procurement policy, and did not follow normal departmental practices.
In May 2016, Khanyile and Chetty allegedly signed a second SLA. This agreement was deemed to have commenced in May 2016 and was to endure until end of March 2017. The ECDSD further paid just over R15 million to Umnotho.
Chetty allegedly misused approximately R14 million from the Umnotho account for his personal benefit. It is alleged that during August and September 2015 he bought a Rolex watch, a diamond ring, a Porsche, a Ferrari and gold coins valued at just over R1 million.
The criminal case was postponed to 20 November 2020 for the state to produce a new indictment and the matter to be referred to the East London High Court for trial.