Two payments of R2.9m each initiated by former Bay finance official Nadia Gerwel and paid by the municipality to Access Facilities and Leisure Management were falsified, the Port Elizabeth Commercial Crimes Court heard on Wednesday.
The invoices, dated March 2 and March 10 2012 and containing details of construction company BKS, formed the basis of proceedings on Wednesday during the multi-million-rand fraud case linked to the alleged siphoning off of money given to the municipality by the National Treasury for the beleaguered Integrated Public Transport System (IPTS).
On trial are Gerwel – the former assistant director in the metro’s finance department – former EP Rugby boss Cheeky Watson, businesswoman Andrea Wessels, her events company Zeranza, former director of Laphum’ilanga Mandisa Mkasa, and the ex-CEO of Access, Stephan Pretorius. They face 44 charges in total, including fraud and money laundering. All have pleaded not guilty.
On Wednesday, the former financial manager of Aecom SA, which bought out BKS, Lisa Henderson, told the court that the two invoices submitted as evidence were falsified.
Henderson said the invoices contained a number of discrepancies, including incorrect invoice numbers and the absence of contract numbers.
“The project name [on the invoices] was not one which we did,” Henderson said.
The invoices submitted to the municipality were for a stormwater drain maintenance project allegedly done at the Nelson Mandela Bay Stadium.
According to prosecutor Tjaart van Zyl, the project never happened and the money was paid to Zeranza for a music festival which never happened.
“These two payments were not actually meant for stormwater drainage to be fixed but made in relation to a concert to be held,” Van Zyl told the court.
Shortly after the payments were made, an audit was conducted on the municipality in relation to money used for the construction and maintenance of the IPTS and the stadium.
During the 2011/2012 audit, Christo Welch, a manager at the Auditor General of SA, made inquiries to the Bay municipality regarding the R2.9m payments.
“The conditions [of the Treasury grant] included conducting an audit to see if the money was spent for buses and lanes to get the bus system going,” Welch said.
During the audit, 14 payments of the total payments were tested in terms of the conditions for the grant, with two of these queried, he said.
The two payments of R2,998,209.12 raised red flags as both invoices were for the same amount and for the same supplier within a few days.
“If the payments were not in line with the [conditions of the] grant we would give the municipality the chance to respond [to queries] and if we were not satisfied with the response we would investigate.”
Welch said the invoices were for the appointment of Access to manage the stadium.
“This was not in accordance with the conditions of the grant,” he said.
He said he had received a letter from Gerwel informing him the payments were for the repair of the stormwater drainage system of two roads around the stadium, which Welch claimed did not add up.
He said the payments made were not in line with the conditions of the grant.
In an affidavit, he claimed there was improper recordkeeping, that allocations of funds for the IPTS were not properly appropriated, and that there were several instances of wasteful, fruitless and unauthorised expenditure on behalf of the municipality.
A senior manager at the auditor-general’s office, Tracey de Wet, who was responsible for a further audit for the 2012/2013 period, said she had been invited to a meeting at Gerwel’s office in late 2013 to discuss the two R2.9m payments made to Access which were found to be irregular.
“[Gerwel] wanted us to relook at the findings – she wanted to furnish us with further information.”
The general reaction was that it was difficult to understand why the documents presented by Gerwel related to the drainage and payment that was made to Access.
Terry Price SC, defence advocate for Gerwel, Wessels, Mkasa and Zeranza, argued that Access was appointed to manage the stadium and this included subcontracting other companies to do construction work which was needed.