AFU gets final order for R19m assets in Lusikisiki case

The high court in Makhanda has granted the National Prosecuting Authority’s (NPA) Asset Forfeiture Unit a final forfeiture order of about R19m against assets that were the alleged proceeds of tender fraud.

The NPA said in a statement that the order followed the arrest in August of two senior former government officials and a businessman.

The three appeared at the King William’s Town magistrate’s court in connection with allegations of fraud, theft and money laundering amounting to just more than R29m.

One of the accused, Stanley Khanyile, was shot dead in early October in Alberton in Gauteng while on bail.

At the time of his arrest, Khanyile was Sedibeng district municipal manager.

He was arrested for offences allegedly committed while he was head of the Eastern Cape department of social development (ECDSD).

He had been charged with two counts of fraud and two of contravention of the Public Finance Management Act.

The two co-accused who remain are the former chief director in his office at the department, Vuyokazi Sangoni, and businessman Poovandaren Chetty.

Sangoni was charged with one count of fraud, while Chetty faces 16 counts of fraud, 18 of theft, and 15 of money laundering.

They were arrested by the anti-corruption task team in Gauteng and in East London.

Khanyile joined the ECDSD after he left the department of co-operative governance & traditional affairs (Cogta) under a cloud of allegations, levelled against him as a result of his involvement in certain unlawful contracts including issues surrounding Umnotho, a company wholly owned by Chetty.

In 2015, the ECDSD was to establish a provincial women’s development resource centre in Lusikisiki.

It was intended to serve as a hub for socioeconomic empowerment of women, with a focus on skills development.

The department identified existing government infrastructure in Lusikisiki as a suitable place to house the centre.

NPA spokesperson Sipho Ngwema said Khanyile had allegedly flouted procurement processes, to the benefit of Chetty, for a R14.5m contract for the establishment of the centre.

He said Khanyile had bypassed procurement processes and in July 2015 signed a service-level agreement (SLA) with Chetty.

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.  

Between July and August 2015, the ECDSD paid more than R14m to Umnotho.

Chetty was the only designated signatory to Umnotho’s bank account.   

For the 2016/2017 financial year, a tender was advertised by the department for the training 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.

Umnotho was duly awarded the tender.

The department further paid just more than R15m to Umnotho.    

Chetty allegedly misused about R14m 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 more than R1m.  

Ngwema said the criminal case had been postponed in October until November 20 for the state to produce a new indictment and for the matter to be referred to the East London high court for trial.