A whopping R65 million.
That’s the value of the fraud allegedly committed by a former Eskom employee, who was put in charge of a project aimed at providing low-cost electricity services in Khayelitsha.
Details of the case against 59-year David Malherbe of Gordon’s Bay emerged in the Western Cape High Court this week in an application the Asset Forfeiture Unit had lodged - which was heard behind closed doors - for an order to attach his assets and that of his company, Energy Utility Services (EUS).
Judge James Yekiso granted the order on Tuesday and, by Thursday morning, when Malherbe was formally notified of the order, members of the police’s Directorate for Priority Crimes Investigations (DPCI) placed him under arrest.
He appeared in the Bellville Commercial Crimes Court that morning, where he was formally charged before being released on R10 000 bail.
It is alleged that he and EUS defrauded Eskom of R65m, using the money to bankroll the lavish lifestyle he and his wife had.
In papers before the court, deputy director of public prosecutions, Gcobani Bam and DPCI investigator Piet Viljoen said the Khayelitsha project which Eskom had appointed Malherbe to head was the brainchild of Eskom, French electricity authority Electricté de France International SA (EDFI), and English company East Midlands Electricity (EME) plc.
The three electricity authorities established Phambili Nombane Pty Ltd, now known as PN Energy Service (PNES), through a joint general co-operation venture launched in 1993, and became its shareholders.
Malherbe was appointed as managing director of PNES. However, by 2007 the French and English companies had pulled out, leaving Eskom as the 100 percent shareholder. The result was that PNES became subject to the provisions of the Public Finance Management Act.
It was decided a year later to dissolve PNES and incorporate is functions back into Eskom - a decision Eskom’s board approved towards the end of 2008.
It was at that time that Malherbe, who was employed by Eskom and headed PNES, registered the company Bold Moves 449 (Pty) Ltd, with himself as the only director and shareholder.
According to the court papers, just a week later Malherbe presented to the board of PNES a proposal that crucial services carried out as part of the Khayelitsha project be contracted to his company.
It is alleged, however, that Malherbe did not disclose his interest in Bold Moves, which now goes by the name EUS.
In addition, it is alleged that he presented to the PNES board that EUS would be a broad-based black empowerment company with “external share BEE empowerment” and “limited share per employee empowerment”.
Malherbe was however its only shareholder.
Viljoen said it was evident that Malherbe failed to carry out his fiduciary duties, and that he fraudulently and unlawfully negotiated the contracts.
An investigation into the financial affairs of PNES and EUS revealed that, between February 2009 and July 2010, PNES paid R65.1m into an EUS bank account at FNB, while an additional R242 553 was paid directly to Malherbe.
In addition, R2.56m was used to buy property in Gordon’s Bay, R1.3m was used to buy property in Bellville, and more than R400 000 was paid into the bond account of his home. - Pretoria News