Nine people arrested for alleged multimillion-rand tender fraud in Eastern Cape

Nine people have been arrested in connection with alleged yellow fleetfraud,corruptionandmoney launderingrelated to a lucrative tender awarded at a rural Eastern Cape municipality. Investigations have revealed that R75m was paid to the implicated business entity between 2015 and 2018. The Hawks’ serious corruption investigation and serious commercial crime investigation units, the tactical response team (TRT) and the national intervention unit (NIU) nabbed the suspects, aged between 43 and 73, in the Eastern Cape, Gauteng and KwaZulu-Natal on Wednesday.

They include formerAlfred Nzo District Municipality(ANDM) officials and two corporate entities. According to Hawks spokesperson Warrant Officer Ndiphiwe Mhlakuvana, the case emanated from the alleged unlawful awarding and execution of a municipal contract by the Alfred Nzo District Municipality between 2015 and 2018. “The suspects are former ANDM senior officials, Avis employees and businessmen,” Mhlakuvana said.

“The investigation was initiated following information received from a whistleblower, who alerted authorities about irregularities in the procurement processes relating to the appointment of a particular service provider at a municipality. “It is alleged that the appointed company did not possess the requisite yellow plant machinery and equipment at the time the contract was awarded, instead relying on hired or leased assets from third-party service providers. “Further probing revealed that similarprocurement irregularitieswere replicated across several municipalities, including ANDM, prompting a comprehensive investigation by the Hawks.” Investigations started in December 2014 found that one of the suspects, acting on behalf of his company, allegedly approached the district municipality with a proposal to procure yellow plant machinery through a hire-purchase arrangement.

[paywall]

Mhlakuvana said the proposal was allegedly advanced without adherence to prescribed supply chain management processes and facilitated through the improper application of regulations under the Municipal Finance Management Act (MFMA), by exploiting an existing contract between the said company and a local municipality. “According to the reports, the company had entered into a full maintenance lease agreement with Zeda Car Leasing (Pty) Ltd, trading as Avis Fleet Services, which was concluded on June 13 2014,” he said.

[/paywall]