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Durban - Was businessman Jabulani Mabaso through his company, Indiza Infrastructure Solutions, allowed to make a profit from the stationery he had supplied to the KwaZulu-Natal Education Department or not?
This was the question posed by advocate Willie Vermeulen SC during argument in the Pietermaritzburg High Court on Monday.
Vermeulen has asked Acting Judge Kobus Booysens to discharge his clients, Mabaso, and Indiza - which was being represented by Mabaso - on charges of defrauding the department of R200 million between 2005 and 2007.
At the time, Mabaso had entered into a “service-level agreement” with the department to supply stationery to schools.
While the State alleges that he was only supposed to have been paid a management fee for his services, Vermeulen argued that he was entitled to make a profit.
He said that the State had not called any witnesses from the department to explain the agreement or how payment had been made to Indiza.
There was also no evidence on what the terms of the agreement were.
“The State relies on this non-descript agreement… this leaves a gap so wide that a successful prosecution is highly unlikely,” he said.
An accountant, Paul de Villiers, who drew up financial statements for another of Mabaso’s companies, had testified that he knew that Indiza was entitled to make a profit.
De Villiers told the court that he could not see why a profit could not be made because there were sizeable overheads to be met.
Had Indiza supplied stationery at cost, it would have made a loss and become bankrupt.
Vermeulen said Mabaso was investigated after it was alleged that he had “an improper relationship” with officials from the committee which recommended that his company be awarded a tender to supply schools with stationery, and because of allegations that he had made an excessive profit.
Vermeulen added that the latter allegation was based largely on Mabaso’s agreement with the department being read wrongly.
It was clear from the State witnesses that, as a matter of practice, suppliers’ invoices were not submitted and the department had not asked for them.
The State is to argue the case tomorrow.